Feb
19
2020
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SentinelOne raises $200M at a $1.1B valuation to expand its AI-based endpoint security platform

As cybercrime continues to evolve and expand, a startup that is building a business focused on endpoint security has raised a big round of funding. SentinelOne — which provides a machine learning-based solution for monitoring and securing laptops, phones, containerised applications and the many other devices and services connected to a network — has picked up $200 million, a Series E round of funding that it says catapults its valuation to $1.1 billion.

The funding is notable not just for its size but for its velocity: it comes just eight months after SentinelOne announced a Series D of $120 million, which at the time valued the company around $500 million. In other words, the company has more than doubled its valuation in less than a year — a sign of the cybersecurity times.

This latest round is being led by Insight Partners, with Tiger Global Management, Qualcomm Ventures LLC, Vista Public Strategies of Vista Equity Partners, Third Point Ventures and other undisclosed previous investors all participating.

Tomer Weingarten, CEO and co-founder of the company, said in an interview that while this round gives SentinelOne the flexibility to remain in “startup” mode (privately funded) for some time — especially since it came so quickly on the heels of the previous large round — an IPO “would be the next logical step” for the company. “But we’re not in any rush,” he added. “We have one to two years of growth left as a private company.”

While cybercrime is proving to be a very expensive business (or very lucrative, I guess, depending on which side of the equation you sit on), it has also meant that the market for cybersecurity has significantly expanded.

Endpoint security, the area where SentinelOne concentrates its efforts, last year was estimated to be around an $8 billion market, and analysts project that it could be worth as much as $18.4 billion by 2024.

Driving it is the single biggest trend that has changed the world of work in the last decade. Everyone — whether a road warrior or a desk-based administrator or strategist, a contractor or full-time employee, a front-line sales assistant or back-end engineer or executive — is now connected to the company network, often with more than one device. And that’s before you consider the various other “endpoints” that might be connected to a network, including machines, containers and more. The result is a spaghetti of a problem. One survey from LogMeIn, disconcertingly, even found that some 30% of IT managers couldn’t identify just how many endpoints they managed.

“The proliferation of devices and the expanding network are the biggest issues today,” said Weingarten. “The landscape is expanding and it is getting very hard to monitor not just what your network looks like but what your attackers are looking for.”

This is where an AI-based solution like SentinelOne’s comes into play. The company has roots in the Israeli cyberintelligence community but is based out of Mountain View, and its platform is built around the idea of working automatically not just to detect endpoints and their vulnerabilities, but to apply behavioral models, and various modes of protection, detection and response in one go — in a product that it calls its Singularity Platform that works across the entire edge of the network.

“We are seeing more automated and real-time attacks that themselves are using more machine learning,” Weingarten said. “That translates to the fact that you need defence that moves in real time as with as much automation as possible.”

SentinelOne is by no means the only company working in the space of endpoint protection. Others in the space include Microsoft, CrowdStrike, Kaspersky, McAfee, Symantec and many others.

But nonetheless, its product has seen strong uptake to date. It currently has some 3,500 customers, including three of the biggest companies in the world, and “hundreds” from the global 2,000 enterprises, with what it says has been 113% year-on-year new bookings growth, revenue growth of 104% year-on-year and 150% growth year-on-year in transactions over $2 million. It has 500 employees today and plans to hire up to 700 by the end of this year.

One of the key differentiators is the focus on using AI, and using it at scale to help mitigate an increasingly complex threat landscape, to take endpoint security to the next level.

“Competition in the endpoint market has cleared with a select few exhibiting the necessary vision and technology to flourish in an increasingly volatile threat landscape,” said Teddie Wardi, managing director of Insight Partners, in a statement. “As evidenced by our ongoing financial commitment to SentinelOne along with the resources of Insight Onsite, our business strategy and ScaleUp division, we are confident that SentinelOne has an enormous opportunity to be a market leader in the cybersecurity space.”

Weingarten said that SentinelOne “gets approached every year” to be acquired, although he didn’t name any names. Nevertheless, that also points to the bigger consolidation trend that will be interesting to watch as the company grows. SentinelOne has never made an acquisition to date, but it’s hard to ignore that, as the company to expand its products and features, that it might tap into the wider market to bring in other kinds of technology into its stack.

“There are definitely a lot of security companies out there,” Weingarten noted. “Those that serve a very specific market are the targets for consolidation.”

Feb
19
2020
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Microsoft Dynamics 365 update is focused on harnessing data

Microsoft announced a major update to its Dynamics 365 product line today, which correlates to the growing amount of data in the enterprise and how to collect and understand that data to produce better customer experiences.

This is, in fact, the goal of all vendors in this space, including Salesforce and Adobe, which are also looking to help improve the customer experience. James Philips, who was promoted to president of Microsoft Business Applications just this week, says that Microsoft has also been keenly focused on harnessing the growing amount of data and helping make use of that inside the applications he is in charge of.

“To be frank, every single thing that we’re doing at Microsoft, not just in business applications but across the entire Microsoft Cloud, is on the back of that vision that data is coming out of everything, and that those organizations that can collect that data, harmonize it and reason over it will be in a position to be proactive versus reactive,” Philips told TechCrunch.

New customer engagement tooling

For starters, the company is adding functionality to its customer data platform (CDP), a concept all major vendors (and a growing group of startups) have embraced. It pulls together into one place all of the customer data from various systems, making it easier to understand how the customer interacts with you, with the goal of providing better experiences based on this knowledge. Microsoft’s CDP is called Customer Insights.

The company is adding some new connectors to help complete that picture of the customer. “We’re adding new first and third-party data connections to Customer Insights that allow our customers to understand, for example audience memberships, brand affinities, demographic, psychographic and other characteristics of customers that are stored and then harnessed from Dynamics 365 Customer Insights,” Philips said.

All of this might make you wonder how they can collect this level of data and maintain GDPR/CCPA kind of compliance. Philips says that the company has been working on this for some time. “We did work at the company level to build a system that allows us and our customers to search for and then delete information about customers in each product group within Microsoft, including my organization,” he explained.

The company has also added new sales forecasting tools and Dynamics 365 Sales Engagement Center. The first allows companies to tap into all this data to better predict the customers who sales is engaged with that are most likely to turn into sales. The second gives inside sales teams tools like next best action. These are not revolutionary by any means in the CRM space, but do provide new capabilities for Microsoft customers.

New operations-level tooling

The operations side is related to what happens after the sale, when the company begins to collect money and report revenue. To that end, the company is introducing a new product called Dynamic 365 Finance Insights, which you can think of as Customer Insights, except for money.

“This product is designed to help our customers predict and accelerate their cash flow. It’s designed specifically to identify opportunities where to focus your energy, where you may have the best opportunity to either close accounts payables or receivables or the opportunity to understand where you may have cash shortfalls,” Philips said.

Finally the company is introducing Dynamics 365 Project Operations, which provides a way for project-based business like construction, consulting and law to track the needs of the business.

“Those organizations, who are trying to operate in a project-based way now have with Dynamics 365 Project Operations, what we believe is the most widely used project management capability in Microsoft Project being joined now with all of the back-end capabilities for selling, accounting and planning that Dynamic 365 offers, all built on the same Common Data Platform, so that you can marry your front-end operations and operational planning with your back-end resource planning, workforce planning and operational processes,” he explained.

All of these tools are designed to take advantage of the growing amount of data coming into organizations, and provide ways to run businesses in a more automated and intelligent fashion that removes some of the manual steps involved in running a company.

To be clear, Microsoft is not alone in offering this kind of intelligent functionality. It is part of a growing movement to bring intelligence to all aspects of enterprise software, regardless of vendor.

Feb
18
2020
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Cloud spending said to top $30B in Q4 as Amazon, Microsoft battle for market share

We all know the cloud infrastructure market is extremely lucrative; analyst firm Canalys reports that the sector reached $30.2 billion in revenue for Q4 2019.

Cloud numbers are hard to parse because companies often lump cloud revenue into a single bucket regardless of whether it’s generated by infrastructure or software. What’s interesting about Canalys’s numbers is that it attempts to measure the pure infrastructure results themselves without other cloud incomes mixed in:

As an example, Microsoft reported $12.5 billion in total combined cloud revenue for the quarter, but Canalys estimates that just $5.3 billion comes from infrastructure (Azure). Amazon has the purest number with $9.8 billion of a reported $9.95 billion attributed to its infrastructure business. This helps you understand why in spite of the fact that Microsoft reported bigger overall cloud earnings numbers and a higher growth rate, Amazon still has just less than double Microsoft’s market share in terms of IaaS spend.

That’s not to say Microsoft didn’t still have a good quarter — it garnered 17.6% of revenue for the period. That’s up from 14.5% in the same quarter a year ago. What’s more, Amazon lost a bit of ground, according to Canalys, dropping from 33.4% in Q4 2018 to 32.4% in the most recent quarter.

Part of the reason for that is because Microsoft is growing at close to twice the rate as Amazon — 62.3% versus Amazon’s 33.2%.

Meanwhile, number-three vendor Google came in at $1.8 billion for pure infrastructure revenue, good for 6% of the market, up from 4.9% a year ago on growth rate 67.6%. Google reported $2.61 billion in overall cloud revenue, but that included software. Despite the smaller results, it was a good quarter for the Mountain View-based company.

Feb
13
2020
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Judge temporarily halts work on JEDI contract until court can hear AWS protest

A sealed order from a judge today has halted the $10 billion, decade-long JEDI project in its tracks until AWS’s protest of the contract award to Microsoft can be heard by the court.

The order signed by Judge Patricia E. Campbell-Smith of the U.S. Court Federal Claims stated:

The United States, by and through the Department of Defense, its officers, agents, and employees, is hereby PRELIMINARILY ENJOINED from proceeding with contract activities under Contract No. HQ0034-20-D-0001, which was awarded under Solicitation No. HQ0034-18-R-0077, until further order of the court.

The judge was not taking this lightly, adding that Amazon would have to put up $42 million bond to cover costs should it prove that the motion was filed wrongfully. Given Amazon’s value as of today is $1.08 trillion, they can probably afford to put up the money, but they must provide it by February 20th, and the court gets to hold the funds until a final determination has been made.

At the end of last month, Amazon filed a motion to stop work on the project until the court could rule on its protest. It is worth noting that in protests of this sort, it is not unusual to stop work until a final decision on the award can be made.

This is all part of an ongoing drama that has gone on for a couple of years since the DoD put this out to bid. After much wrangling, the DoD awarded the contract to Microsoft at the end of October. Amazon filed suit in November, claiming that the president had unduly influenced the process.

As we reported in December, at a press conference at AWS re:Invent, the cloud arm’s annual customer conference, AWS CEO Andy Jassy made clear the company thought the president had unfairly influenced the procurement process:

“I would say is that it’s fairly obvious that we feel pretty strongly that it was not adjudicated fairly,” he said. He added, “I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal.”

Earlier this week, the company filed paperwork to depose the president and Secretary of Defense Mark Esper.

The entire statement from the court today halting the JEDI project:

**SEALED**OPINION AND ORDER granting [130] Motion for Preliminary Injunction, filed by plaintiff. The United States, by and through the Department of Defense, its officers, agents, and employees, is hereby PRELIMINARILY ENJOINED from proceeding with contract activities under Contract No. HQ0034-20-D-0001, which was awarded under Solicitation No. HQ0034-18-R-0077, until further order of the court.

Pursuant to RCFC 65(c), plaintiff is directed to PROVIDE security in the amount of $42 million for the payment of such costs and damages as may be incurred or suffered in the event that future proceedings prove that this injunction was issued wrongfully.

As such, on or before 2/20/2020, plaintiff is directed to FILE a notice of filing on the docket in this matter indicating the form of security obtained, and plaintiff shall PROVIDE the original certification of security to the clerk of court. The clerk shall HOLD the security until this case is closed.

On or before 2/27/2020, the parties are directed to CONFER and FILE a notice of filing attaching a proposed redacted version of this opinion, with any competition-sensitive or otherwise protectable information blacked out. Signed by Judge Patricia E. Campbell-Smith.

Feb
03
2020
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Microsoft Teams has been down this morning

Microsoft Teams, the collaboration platform that competes with Slack, has been down since about 8:30 am ET. Microsoft reports the outage was due to an expired certificate.

Microsoft first posted on its Office 365 Status Twitter feed about 9:00 am ET that an outage was in progress, stating the company was looking into the problem.

At approximately 10:00 am ET, the company posted the reason for the problem, an expired certificate, which frankly, has to be pretty embarrassing for the group responsible for keeping the Teams service running.

About an hour ago, the company updated the status again, indicating it had begun deploying the updated certificate.

Some customers have begun reporting on Twitter that service has been restored.

Microsoft has kept the status updates pretty business like, but has not apologized to its 20 million users as of publication. The company is in the midst of a battle with Slack for hearts and minds in the enterprise collaboration space, and a preventable outage has to be awkward for them.

The company will no doubt do a post-mortem to figure out how this mistake happened and how to prevent this kind of issue from taking down the site again. While every service is going to experience an outage from time to time, it’s up to the organization to understand why it happened and put systems in place to keep a preventable incident like this one from happening again in the future.

Jan
31
2020
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Even as Microsoft Azure revenue grows, AWS’s market share lead stays strong

When analyzing the cloud market, there are many ways to look at the numbers; revenue, year-over-year or quarter-over-quarter growth — or lack of it — or market share. Each of these numbers tells a story, but in the cloud market, where aggregate growth remains high and Azure’s healthy expansions continues, it’s still struggling to gain meaningful ground on AWS’s lead.

This has to be frustrating to Microsoft CEO Satya Nadella, who has managed to take his company from cloud wannabe to a strong second place in the IaaS/PaaS market, yet still finds his company miles behind the cloud leader. He’s done everything right to get his company to this point, but sometimes the math just isn’t in your favor.

Numbers don’t lie

John Dinsdale, chief analyst at Synergy Research, says Microsoft’s growth rate is higher overall than Amazon’s, but AWS still has a big lead in market share. “In absolute dollar terms, it usually has larger increments in revenue numbers and that makes Amazon hard to catch,” he says, adding “what I can say is that this is a very tough gap to close and mathematically it could not happen any time soon, whatever the quarterly performance of Microsoft and AWS.”

The thing to remember with the cloud market is that it’s not even close to being a fixed pie. In fact, it’s growing rapidly and there’s still plenty of market share left to win. As of today, before Amazon has reported, it has a substantial lead, no matter how you choose to measure it.

Jan
30
2020
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OpsRamp raises $37.5M for its hybrid IT operations platform

OpsRamp, a service that helps IT teams discover, monitor, manage and — maybe most importantly — automate their hybrid environments, today announced that it has closed a $37.5 million funding round led by Morgan Stanley Expansion Capital, with participation from existing investor Sapphire Ventures and new investor Hewlett Packard Enterprise.

OpsRamp last raised funding in 2017, when Sapphire led its $20 million Series A round.

At the core of OpsRamp’s services is its AIOps platform. Using machine learning and other techniques, this service aims to help IT teams manage increasingly complex infrastructure deployments, provide intelligent alerting and eventually automate more of their tasks. The company’s overall product portfolio also includes tools for cloud monitoring and incident management.

The company says its annual recurrent revenue increased by 300% in 2019 (though we obviously don’t know what number it started 2019 with). In total, OpsRamp says it now has 1,400 customers on its platform and alliances with AWS, ServiceNow, Google Cloud Platform and Microsoft Azure.

OpsRamp co-founder and CEO Varma Kunaparaju

According to OpsRamp co-founder and CEO Varma Kunaparaju, most of the company’s customers are mid to large enterprises. “These IT teams have large, complex, hybrid IT environments and need help to simplify and consolidate an incredibly fragmented, distributed and overwhelming technology and infrastructure stack,” he said. “The company is also seeing success in the ability of our partners to help us reach global enterprises and Fortune 5000 customers.”

Kunaparaju told me that the company plans to use the new funding to expand its go-to-market efforts and product offerings. “The company will be using the money in a few different areas, including expanding our go-to-market motion and new pursuits in EMEA and APAC, in addition to expanding our North American presence,” he said. “We’ll also be doubling-down on product development on a variety of fronts.”

Given that hybrid clouds only increase the workload for IT organizations and introduce additional tools, it’s maybe no surprise that investors are now interested in companies that offer services that rein in this complexity. If anything, we’ll likely see more deals like this one in the coming months.

“As more of our customers transition to hybrid infrastructure, we find the OpsRamp platform to be a differentiated IT operations management offering that aligns well with the core strategies of HPE,” said Paul Glaser, vice president and head of Hewlett Packard Pathfinder. “With OpsRamp’s product vision and customer traction, we felt it was the right time to invest in the growth and scale of their business.”

Jan
29
2020
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Greylock’s Reid Hoffman and Sarah Guo to talk fundraising at Early Stage SF 2020

Early Stage SF is around the corner, on April 28 in San Francisco, and we are more than excited for this brand new event. The intimate gathering of founders, VCs, operators and tech industry experts is all about giving founders the tools they need to find success, no matter the challenge ahead of them.

Struggling to understand the legal aspects of running a company, like negotiating cap tables or hiring international talent? We’ve got breakout sessions for that. Wondering how to go about fundraising, from getting your first yes to identifying the right investors to planning the timeline for your fundraise sprint? We’ve got breakout sessions for that. Growth marketing? PR/Media? Building a tech stack? Recruiting?

We. Got. You.

Hoffman + Guo

Today, we’re very proud to announce one of our few Main Stage sessions that will be open to all attendees. Reid Hoffman and Sarah Guo will join us for a conversation around “How To Raise Your Series A.”

Reid Hoffman is a legendary entrepreneur and investor in Silicon Valley. He was an Executive VP and founding board member at PayPal before going on to co-found LinkedIn in 2003. He led the company to profitability as CEO before joining Greylock in 2009. He serves on the boards of Airbnb, Apollo Fusion, Aurora, Coda, Convoy, Entrepreneur First, Microsoft, Nauto and Xapo, among others. He’s also an accomplished author, with books like “Blitzscaling,” “The Startup of You” and “The Alliance.”

Sarah Guo has a wealth of experience in the tech world. She started her career in high school at a tech firm founded by her parents, called Casa Systems. She then joined Goldman Sachs, where she invested in growth-stage tech startups such as Zynga and Dropbox, and advised both pre-IPO companies (Workday) and publicly traded firms (Zynga, Netflix and Nvidia). She joined Greylock Partners in 2013 and led the firm’s investment in Cleo, Demisto, Sqreen and Utmost. She has a particular focus on B2B applications, as well as infrastructure, cybersecurity, collaboration tools, AI and healthcare.

The format for Hoffman and Guo’s Main Stage chat will be familiar to folks who have followed the investors. It will be an updated, in-person combination of Hoffman’s famously annotated LinkedIn Series B pitch deck that led to Greylock’s investment, and Sarah Guo’s in-depth breakdown of what she looks for in a pitch.

They’ll lay out a number of universally applicable lessons that folks seeking Series A funding can learn from, tackling each from their own unique perspectives. Hoffman has years of experience in consumer-focused companies, with a special expertise in network effects. Guo is one of the top minds when it comes to investment in enterprise software.

We’re absolutely thrilled about this conversation, and to be honest, the entire Early Stage agenda.

How it works

Here’s how it all works:

There will be about 50+ breakout sessions at the event, and attendees will have an opportunity to attend at least seven. The sessions will cover all the core topics confronting early-stage founders — up through Series A — as they build a company, from raising capital to building a team to growth. Each breakout session will be led by notables in the startup world.

Don’t worry about missing a breakout session, because transcripts from each will be available to show attendees. And most of the folks leading the breakout sessions have agreed to hang at the show for at least half the day and participate in CrunchMatch, TechCrunch’s app to connect founders and investors based on shared interests.

Here’s the fine print. Each of the 50+ breakout sessions is limited to around 100 attendees. We expect a lot more attendees, of course, so signups for each session are on a first-come, first-serve basis. Buy your ticket today and you can sign up for the breakouts that we’ve announced. Pass holders will also receive 24-hour advance notice before we announce the next batch. (And yes, you can “drop” a breakout session in favor of a new one, in the event there is a schedule conflict.)

Grab yourself a ticket and start registering for sessions right here. Interested sponsors can hit up the team here.


Jan
23
2020
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In latest JEDI contract drama, AWS files motion to stop work on project

When the Department of Defense finally made a decision in October on the decade-long, $10 billion JEDI cloud contract, it seemed that Microsoft had won. But nothing has been simple about this deal from the earliest days, so it shouldn’t come as a surprise that last night Amazon filed a motion to stop work on the project until the court decides on its protest of the DoD’s decision.

The company announced on November 22nd that it had filed suit in the U.S. Court of Federal Claims protesting the DoD’s decision to select Microsoft. Last night’s motion is an extension of that move to put the project on hold until the court decides on the merits of the case.

Sources tell us that AWS decided not protest the start of initial JEDI activities at the time of the court filing in November as an accommodation made at DoD’s request. DoD declined to comment on that.

As for why they are doing it now, an Amazon spokesperson had this to say in a statement last night: “It is common practice to stay contract performance while a protest is pending and it’s important that the numerous evaluation errors and blatant political interference that impacted the JEDI award decision be reviewed. AWS is absolutely committed to supporting the DoD’s modernization efforts and to an expeditious legal process that resolves this matter as quickly as possible.”

As we previously reported, the statement echoes sentiments AWS CEO Andy Jassy made at a press event during AWS re:Invent in December:

“I would say is that it’s fairly obvious that we feel pretty strongly that it was not adjudicated fairly,” he said. He added, “I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal.”

This is just the latest turn in a contract procurement process for the ages. It will now be up to the court to decide if the project should stop or not, and beyond that if the decision process was carried out fairly.

Jan
17
2020
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Microsoft announces global Teams ad push as it combats Slack for the heart of enterprise comms

The long-running contest between Microsoft and its Teams service and Slack’s eponymous application continued this morning, with Redmond announcing what it describes as its first “global” advertising push for its enterprise communication service.

Slack, a recent technology IPO, exploded in the back half of last decade, accreting huge revenues while burrowing into the tech stacks of the startup world. The former startup’s success continued as it increasingly targeted larger companies; it’s easier to stack revenue in enterprise-scale chunks than it is by onboarding upstarts.

Enterprise productivity software, of course, is a large percentage of Microsoft’s bread and butter. And as Slack rose — and Microsoft decided against buying the then-nascent rival — the larger company invested in its competing Teams service. Notably, today’s ad push is not the first advertising salvo between the two companies. Slack owns that record, having welcomed Microsoft to its niche in a print ad that isn’t aging particularly well.

Slack and Teams are competing through public usage announcements. Most recently, Teams announced that it has 20 million daily active users (DAUs); Slack’s most recent number is 12 million. Slack, however, has touted how active its DAUs are, implying that it isn’t entirely sure that Microsoft’s figures line up to its own. Still, the rising gap between their numbers is notable.

Microsoft’s new ad campaign is yet another chapter in the ongoing Slack vs. Teams. The ad push itself is only so important. What matters more is that Microsoft is choosing to expend some of its limited public attention bandwidth on Teams over other options.

Stock

While Teams is merely part of the greater Office 365 world that Microsoft has been building for some time, Slack’s product is its business. And since its direct listing, some air has come out of its shares.

Slack’s share price has fallen from the mid-$30s after it debuted to the low-$20s today. I’ve explored that repricing and found that, far from the public markets repudiating Slack’s equity, the company was merely mispriced in its early trading life. The company’s revenue multiple has come down since its first days as a public entity, but remains rich; investors are still pricing Slack like an outstanding company.

Ahead, Slack and Microsoft will continue to trade competing DAU figures. The question becomes how far Slack’s brand can carry it against Microsoft’s enterprise heft.

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