More than 10,500 people cast votes for their favorite cloud startups. But before we get on to our final rankings, a bit of background on the voting process: Unfortunately, a couple of frisky engineers decided to try to hijack the vote with a few automated bot ballot-box stuffers, so some votes had to be purged [more on this here].
When the startups who most likely scripted the bots were contacted, the management teams appeared genuinely shocked. The CEOs involved tracked down the script writers quickly, reprimanded them and threw their startups at the mercy of the court.
We kept them on the list, because in the grand scheme of things, trying to hijack online voting isn't a capital offense. It's a misdemeanor, but enough of one to get you dropped down the list significantly.
Also, the final rankings are based only partly on the online voting. Here's the procedure we used to determine the final ranking:
Every startup was ordered based on vote tallies (legitimate vote tallies, that is).
Each startup was then scrutinized for an area of weakness, such as a lack of named customers or a green management team.
If there was a weakness, we looked at the competitors who finished close to them in the rankings to see if any should jump ahead.
To get a better sense of what factors that were weighted most heavily, check out the overview of selection criteria and weighting.
A big thanks to the 10,500+ humans who voted. As for our bot friends, sorry, you haven't earned the right to vote -- yet.
1. Aryaka Networks
What they do: Provide cloud-based WAN optimization and application acceleration services.
Why they're No. 1: Aryaka finished first in the voting. With a strong management team (CEO Ajit Gupta previously sold Speedera to Akamai for $500 million), a hefty bundle of VC funding, and a long list of named customers, they're a solid No. 1.
Headquarters: Milpitas, CA
CEO: Ajit Gupta, who previously founded Speedera and served as its President and CEO until it was acquired by Akamai for approximately $500 million.
Founded: November 2008
Funding: The company has raised $45 million in three rounds of funding. The most recent round was a $25 million Series C led by InterWest Partners, with participation from Presidio Ventures, a Sumitomo Corporation Company, and existing investors Nexus Venture Partners, Trinity Ventures and Mohr Davidow Ventures.
Why they made this list in the first place: WAN optimization is typically too costly for the middle market. Aryaka zeroed in on this problem and determined that the best way to drive down costs and democratize the technology was to deliver WAN optimization as a service.
Aryaka first built a delivery network comprised of globally distributed POPs. Enterprise locations connect into the Aryaka network over existing Internet links (or using direct L2 connections) to one or more POPs. Provisioning can be accomplished in minutes -- rather than days or weeks as with hardware-based solutions.
To boost application acceleration, Aryaka runs TCP optimization technology, as well as bandwidth scaling and application-specific proxies. Aryaka also provides access to Internet-based SaaS and cloud services, which help customers avoid middle-mile congestion problems that Internet-based connectivity solutions experience.
Market potential and competitive landscape: According to IDC, the WAN optimization market should have topped $1.3 billion by the end of 2012. There are some major incumbents in this market, though. Riverbed owns about 50% of the market, while Cisco, F5, Blue Coat and Silver Peak are all formidable foes.
That said, the IT market as a whole is slowly moving away from box-heavy infrastructures -- the delivery model of the above providers -- and to services. Moreover, the middle market is grossly underserved by existing solutions, and even many large enterprises are reluctant to deploy hardware at branch offices, which will greatly benefit from a service like this.
What they do: Provide OpenStack-based appliances that let businesses deploy and manage private clouds.
Why they're No. 2: Nebula finished near the top of the voting, and it's impossible to ignore the pedigree of their management team. They're well-funded, and while there are plenty of OpenStack skeptics out there, I'm not one of them.
Headquarters: Palo Alto, CA
CEO: Chris Kemp, who was previously CTO for IT at NASA, where he also co-founded the OpenStack project
Founded: April 2011
Funding: In September 2012, the company raised a $25 million Series B round led by Comcast Ventures and Highland Capital Partners. Kleiner Perkins, William Hearts II, Maynard Webb, Scott McNealy, Innovation Endeavors participating and Google's first three investors (Andy Bechtolsheim, David Cheriton and Ram Shriram) also participated.
Why they made this list in the first place: OpenStack is shaking up the cloud infrastructure landscape, serving as the main open-source alternative (sorry CloudStack) to VMware. CEO Chris Kemp co-founded OpenStack while he was at NASA, and along with Rackspace, Nebula is a key driver helping to make OpenStack a viable alternative to closed cloud systems.
NASA and several other government agencies use OpenStack for their own private clouds. Nebula delivers its private cloud solution as an appliance.
Market potential and competitive landscape: Cloud market predictions are all over the map (Forrester predicts that the global cloud computing market will grow from $40.7 billion in 2011 to more than $241 billion in 2020, while Deloitte predicts that cloud-based applications will only replace 2.34% of enterprise IT spending in 2014 rising to 14.49% in 2020, while also pushing down costs in the process). We do know, though, that the cloud deployment and management market will be large.
This sector is a land grab as of now, but there is a ton of competition already, including VMware, AWS, Citrix (CloudStack), dinCloud, AppZero, Eucalyptus, Rackspace, OnApp, Piston and many others.
3. Blue Jeans Network
What they do: Develop cloud-based videoconferencing tools that bridge various available services.
Why they're No. 3: It's pretty hard to ignore that big stash of VC funding, especially in a down economy. Videoconferencing is a growing market, and Blue Jeans is uniquely positioned to capitalize on it.
Headquarters: Mountain View, CA
CEO: Krish Ramakrishnan, who formerly served as CEO for Topspin, which was acquired by Cisco in 2005. At Cisco, he served as GM of the Server Virtualization business unit.
Founded: November 2009
Funding: The company has raised $48.5 million from New Enterprise Associates, Accel Partners and Norwest Venture Partners.
Why they made this list in the first place: Today, various videoconferencing systems do not interoperate. Cisco videoconferencing units don't talk to Polycom which don't talk to Google which don't talk to Skype, etc. Imagine if this were the case with telephony. If you were a Sprint customer, you could only talk to other Sprint customers. If you wanted to talk to someone on AT&T or Verizon, you'd need to download special software.
Blue Jeans Network leverages the cloud to turn videoconferencing calls into a "meet me" service, where each party dials into the videoconference from whichever system they prefer to use. The endpoint hardware becomes irrelevant -- kind of like how the handset is irrelevant when placing a call.
On its roadmap, Blue Jeans intends to eventually take users from the audio-only calling market and shift them to video calls. Customers include Facebook, Match.com, Foursquare and the Sierra Club.
Market potential and competitive landscape: According to Wainhouse Research, the videoconferencing infrastructure market represents a $700 million/year market. However, this is a crowded space. In addition to incumbents like Polycom and Cisco, cloud- based newcomers, such as Join.me and FuzeBox, will challenge Blue Jeans. That said, Blue Jeans is the only tool we're aware of that stitches an array of conferencing services together.
What they do: Develop cloud-based data integration tools.
Why they're number 4: BrightTag did well in the voting, is sitting on a nice stack of VC money and is uniquely positioned in the market. BrightTag has a solid management team, a good deal of funding and a list of impressive customers.
Headquarters: Chicago, IL
CEO: Mike Sands. Prior to joining BrightTag, Sands was part of the original Orbitz management team and held the positions of CMO and COO.
Funding: They've raised $23 million to date from Baird Venture Partners, EPIC Ventures, I2A Fund, New World Ventures and TomorrowVentures.
Why they made this list in the first place: Today, if a Website owner wants to work with multiple third-party services (e.g. Google Analytics, ad networks, social, etc.), they have to conform to an outdated construct of putting the vendor's code (or "tag") on every page of their Website that they want to track. In doing so, the site owner is not in control over the data collected, they introduce site performance issues with more code being pushed through their consumers' browsers, and they create silos of data across each vendor's service, not to mention creating privacy issues with regard to data collection practices.
BrightTag intends to simplify how Websites connect to their partners by providing a single point of integration for any data-driven service. The company's platform replaces traditional "tag-centric" methods of connecting sites to marketing services with real-time, direct integration through the cloud.
Clients include Yahoo! Japan, Gap, Macy's, Levi's, Bebe, Tommy Bahama, Crate & Barrel, JetBlue Airlines, Orbitz, Starwood, US Cellular, Transunion and Allstate.
Market landscape and competition: This market is new enough that there aren't good market estimates on it. Google, Adobe and IBM offer competing tag container solutions.
BrightTag argues that most competing solutions on the market are "tag containers." As browser-based tags continue to proliferate -- either fueled by the advent of tag management solutions or from continued industry growth -- both data collection and the site users' experience become slow and unstable.
BrightTag cloud-based service eliminates vendor tags altogether and connects data directly. There are no "tags" in a point-of-sale system or a mobile app or email. According to Web analytics firm BuiltWith 30% of the top Internet retailers have employed a tag management system and of those 43% are using BrightTag.
5. SaaS Markets
What they do: Provide the cloud-based infrastructure that enterprises can use to launch mobile app and SaaS stores.
Why they're No. 5: They finished in the top 5 in voting, and we really like their business model. They are slowly but surely building momentum by racking up customer win after customer win with various Chambers of Commerce, which tend to be tech laggards, so it's no small feat.
Headquarters: San Mateo, CA
CEO: Ferdi Roberts, who previously held senior executive positions at Yahoo, Cisco, and Ariba.
Funding: They just closed a $3.5 million series A round from Sysnet Global Solutions and GTX Partners.
Why they made this list in the first place: As BYOD becomes more common and as the "appification" trend continues unabated, enterprises must find ways to approve and control these apps. SaaS Markets intends to address this problem by giving enterprises the tools they need to launch their own app and SaaS stores.
App qualification is managed by the SaaS Markets Application Partner team, which runs SaaS applications through a series of rigorous tests. MarketMaker, the SaaS Markets platform, includes a search engine to make it easy to find all relevant apps, and evaluate and test them side-by-side in terms of capabilities, interface, features and cost.
Currently, SaaS Market also offers more than 1,300 pre-qualified SaaS apps for tasks that range from managing social media outbound messages to project management to cash flow management to security.
Customers include the Montana Chamber of Commerce, Association of Washington Business, Park City, UT Chamber of Commerce and Auburn, WA Chamber of Commerce.
Market landscape and competition: Forrester Research is projecting the SaaS software market to increase 25% in 2013 to $59 billion, a 25% increase. In 2014, Forrester projects the market to total $75 billion. Competitors include App47 and AppCentral.
What they do: Develop virtualization security tools.
Why they're No. 6: Cloud security is a huge deal, and HyTrust is the lone cloud security representative on this list. (We could easily have had five or more, but that would have skewed this roundup.) They have a really good approach to virtualization/cloud security, and they already have an impressive list of customers.
Headquarters: Mountain View, CA
CEO: John De Santis serves as CEO. Eric Chiu co-founded the company and is its President. De Santis was formerly Chairman and CEO of TriCipher, a software security infrastructure company acquired by VMware in 2010. After the acquisition, he served as VP, Cloud Services for VMware. Chiu was previously VP of Sales and Business Development for Cemaphore Systems.
Founded: April, 2009