March 20, 2013, 11:05 AM — 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
Funding: HyTrust has raised $16 million from Trident Capital, Granite Ventures and Epic Ventures, as well as strategic corporate investors such as Cisco and VMware.
Why they made this list in the first place: Virtualized and cloud infrastructures create new security, control, management and compliance challenges for IT staffs. Organizations take big risks when they move to the cloud or rely on virtualization when critical applications and sensitive information are not properly secured.
The HyTrust Appliance delivers access control, enforcement of policy across virtual infrastructures, hypervisor hardening, and audit-quality logging among other features. By addressing these requirements, HyTrust is able to provide organizations with the control and visibility required for them to virtualize Tier 1 applications, meet corporate governance requirements, and avoid costly downtime or other possibly more serious business disruption.
Customers include AIG, US Army, Northrop Grumman, Pepsi, McKesson, Home Shopping Network, Federal Reserve Bank of Chicago, UC Berkeley, State of New Mexico, and Denver Museum of Nature & Science.
Market landscape and competition: The cloud security market is incredibly crowded, but HyTrust has carved out a solid niche by focusing on hypervisor vulnerabilities. Competitors include Altor Networks (now Juniper) and Catbird.
What they do: Help small- to mid-sized businesses migrate and provision desktops, servers, storage, networking and applications to a Virtual Private Data Center.
Why they're No. 7: dinCloud would probably move up the list if they had some name-brand customers on the record. Their PR rep says that they have some major customers in the works, but until those are actually on the record, they don't work in their favor in this roundup.
Headquarters: Los Angeles, CA
CEO: Kevin Schatzle. Prior to joining dinCloud, he was President of Allied Digital Services' U.S. subsidiary.
Founded: January 2011
Funding: The company has secured an undisclosed amount of Angel funding.
Why they made this list in the first place: Most enterprises know they should virtualize their infrastructures, but they struggle with where and how to start. According to dinCloud, virtualization and cloud computing aren't just about hosting servers alone, or giving customers virtual machines in the cloud. They are about business provisioning and helping businesses transform their physical environments to virtual ones.
dinCloud's software enables the rapid migration/provisioning of desktops, servers, storage, networking and applications to a Virtual Private Data Center. Customers can control as much of this infrastructure as they want through an online cloud orchestration and management platform, dinManage.
High-profile partner Microsoft says that it worked with dinCloud to help save a financial services customer 50% on IT spending. In this case, dinCloud hosts 250 virtual desktops, 30 virtual servers, and provides second site back up in the cloud.
Named customers include King's Hawaiian and National Asset Direct.
Market landscape and competition: Gartner predicts that the cloud Infrastructure-as-a-Service (IaaS) spending will exceed $72 billion, (42% CAGR) by 2016. Competitors, although not exactly apples-to-apples ones, include AWS and Rackspace.
What they do: Provide cloud services, including IaaS, CDN and storage services.
Why they're No. 8: This is the slot, or maybe the one above, where startups start to feel disappointed. Well, they shouldn't. The original list of companies considered had more than 150 contenders. Being in the top 10 is a big deal. OnApp has a solid management team, a good chunk of VC money and is positioned in a high-growth subsector of the cloud market.
Headquarters: London, UK
CEO: Ditlev Bredahl. Before founding OnApp, Ditlev led UK2 Group's hosting companies as Managing Director and CEO.
Founded: July 2010
Funding: To date, OnApp has raised $20 million in two rounds of funding. The latest B round of funding was led by UK private equity firm LDC.
Why they made this list in the first place: If you're a traditional hosting provider, you have either already transitioned to being a cloud provider or you are scrambling to do so.
OnApp's mission is to remove the entry barriers to the cloud for Web hosts, telcos, ISPs, MSPs and other traditional service providers. OnApp developed a turnkey system that enables service providers to create their own cloud services, using their existing servers or data centers, with no up-front software investment required.
The OnApp Cloud platform takes care of all core cloud management/orchestration functions, such as cloud deployment, VM management, failover and autoscaling. It also includes the capabilities lacking from most enterprise-focused private cloud platforms, but which service providers absolutely depend on, such as support for different utility and plan-based billing models; the ability to bill for every hardware resource in your cloud; and user management, limits and permissions.
The latest version of the OnApp Cloud platform includes a built-in SAN, a global CDN with video streaming support, DNS management, autoscaling, load balancing and a range of other features. Customers include PEER1 Hosting, GMO, UK2 Group, Dediserve and eApps.
Market landscape and competition: OnApp is targeting a public cloud IaaS market currently estimated at $6.2 billion, according to Garter, and a CDN market estimated at $2.5 billion, according to Markets and Markets.
Competitors include AWS and ScaleUp Technologies. With its recent service upgrade, OnApp now also competes with CDN providers.
What they do: Help companies migrate server applications to the cloud.
Why they're No. 9: AppZero has already raised a decent amount of funding, despite having only dipped their toes in for an Angel round. Migrating apps is going to be a huge deal in the near-term, and AppZero should be able to cash in as more and more apps are moved to the cloud.
Headquarters: Andover, MA
CEO: Greg O'Connor. He previously served as founder and president of Sonic Software, acquired in 2005 by Progress Software.
Founded: September 2010
Funding: $10 million in Angel funding from Covington Capital and private investors.
Why they made this list in the first place: Moving applications from traditional IT systems to the cloud isn't easy. AppZero encapsulates an application and its dependencies in a "virtual application appliance," without a virtual machine (VM). The result is an application that is flexible, "hypervisor-agnostic, cloud independent, and fast." Current customers include Pabst Blue Ribbon.
Market potential and competitive landscape: Gartner predicts that the cloud Infrastructure-as-a-Service (IaaS) spending will exceed $72 billion, (42% CAGR) by 2016. AppZero isn't a strict IaaS company, but their technology will help organizations migrate to IaaS. Competitors include companies PlateSpin (which is now part of NetIQ).
What they do: Develop tools that provide visibility into cloud and CDN performance, and then help users act on that information.
Why they're No. 10: Cedexis only recently entered the U.S. market, so that probably explains why they lagged a bit in the voting. That said, the spread from first to tenth was just over 1,000 votes, from fourth to tenth was only a few hundred. (And for those trying to guess who scripted the bots: no, it was not Cedexis.)
As anyone who relies on the public Internet knows, trusting its performance is a sucker's game. However, to improve performance, you need visibility into these networks. Cedexis' cloud-based, crowd-sourced approach to gaining cloud and CDN performance visibility is really smart, and is well-positioned in a growth sector.
Headquarters: Portland, OR
CEO: Marty Kagan, who previously served as VP of engineering for Jive Software.
Founded: Q4 2009
Funding: They landed a $7 million Series A round in mid-2011 from Madrona Ventures Group and Advanced Technology Ventures (ATV).
Why they made this list in the first place: Let's face it, the roadblock for many cutting-edge cloud services, especially those using rich media, is the poor performance and unpredictability of the public Internet. Cedexis' mission is to improve "the Web experience of billions of Website visitors each month by providing visibility into the performance of clouds and CDNs."
Cedexis Radar is a free community that crowd-sources visibility into cloud and CDN performance from the end user perspective. It has global reach and is updated over 1 billion times a day.
Cedexis Openmix is a paid Cloud SaaS offering that uses Radar, and other real-time data, to dynamically route Website and Web application traffic around outages and service degradations.
The newest product, Cedexis Fusion, is a Big Data tool that aggregates third-party data, including pre-built integrations for New Relic, AppDynamics, Akamai, Level3, Edgecast, ChinaCache, SoftLayer and many others, to further improve the availability and performance of customer Websites and Web applications.
Customers include Mozilla, Dior, Nissan, Volkswagon, LeMonde, France Television, Yves Roche, NBC News, Accor Hotels, EuroDisney, L'oreal, and Via Michelin.
Market landscape and competition: According to Gartner's 2012 Magic Quadrant for Application Performance Monitoring, the APM market should have hit $2.14 billion by the end of 2012 (a 9% increase over 2011). Meanwhile, Markets and Markets believes the CDN market will grow to from $2.1 billion in 2011 to $7.4 billion by 2017.
Competitors include CA (through its Nimsoft acquisition) and Zenoss.
Notes regarding the bot ballot-box stuffers
Unfortunately, it's likely that a few legitimate votes were lost in the process. However, when the bots were running, they clogged up the servers, so most real votes were actually blocked for the few minutes they were on. However, we are confident that not too many legitimate votes were purged.
Here's the thing, Fraudsters: The bot patterns are pretty easy to recognize.
What's not so easy is purging the illegitimate votes. With SurveyMonkey you have to manually delete any vote you want to toss out, one by one. Since a couple of the bots were running low-and-slow attacks, it was a major headache to purge the votes.
It's pretty easy, though, to do some back of the envelope calculations to get a fairly accurate estimate.
To avoid such trouble going forward we'll be setting stricter controls on future surveys and perhaps get some custom code written to block fraudsters.