Dana Hunsinger Benbow, dana.benbow@indystar.comAs Tom Crean and his Indiana University basketball team battled Wichita State in the NCAA tournament, fans inside the CenturyLink center in Omaha tweeted, Facebooked and Instagrammed away.By game's end, IU had fallen to Wichita State 81-76.By game's end, IU had fallen to Wichita State 59-41 when it came to another score -- social media.Of all the Twitter frenzy that happened inside that arena during the game, 59 percent revolved around Wichita State while 41 percent was IU centered.Could it be that the amount of tweets and social media activity by fans can determine who will win the game?Of course not. Though plenty of superstitious fans may like to think so as they send out those 140-character-or-less cheers, boos and game analyses.
Indianapolis-Geofeedia created geofences around the NCAA tournament sites and the campuses of the teams to capture just how all that social media activity went down.In the end, the teams who won the games on the court also often came out on top in social media scores.That only makes sense."When a team is winning, people are more likely to be talking about their team," said Karen Hopp, with Geofeedia, a location-based social media monitoring company.After all, who wants to send out a Facebook pic of a scoreboard that shows the team you're rooting for is falling behind?And, no doubt, the bragging outweighs the moaning as a game plays out. So the team who ultimately wins often ends up with the most mentions. At least, that's what GeoFeedia found.But it also found something else. Social media is taking over the sports world.There was a 547 percent increase in social media activity at Lucas Oil Stadium during this year's Final Four (based on location tagged posts) compared to 2014's Final Four.Geofeedia -- with its sophisticated monitoring of social media -- which isn't based on hashtags but on location and specific team, player and arena mentions, found out plenty of other interesting facts.DUKE VS WISCONSINIn the championship game, a strange social media occurrence happened inside Lucas Oil Stadium. Wisconsin's in-stadium social media activity beat out Duke at 56 percent. Though Duke, of course, ended up winning that game.When it came to the two coaches, Duke's Mike Krzyzewski sealed the social media win against Wisconsin's Bo Ryan by a long shot. It was his fifth NCAA title.
And of all the players competing in the final game, Wisconsin's Frank Kaminsky received the most social media mentions.
INDIANA TEAM SOCIAL MEDIA SCORESPurdue vs. CincinnatiPurdue lost the game in Louisville and in social media.67 percent Cincinnati33 percent Purdue
Butler vs. TexasButler won the game in Pittsburgh and in social media.58 percent Butler42 percent Texas
Second Round:Butler vs. Notre DameNotre Dame won the game in Cleveland and in social media54 percent Notre Dame46 percent Butler
Sweet 16:Notre Dame vs. Wichita StateNotre Dame won the game in Cleveland and in social meida71 percent Notre Dame29 percent Wichita StateElite 8:Notre Dame vs. KentuckyKentucky won the game in Cleveland, but tied in social media50 percent Notre Dame50 percent KentuckyFollow Dana Benbow on Twitter: @DanaBenbow.
Private equity’s four toughest decisions
By Brian RichPrivate equity may seem easy to some observers. Buy a company, perhaps insert some debt, provide a bit of operational advice and execute a killer exit. Those of us who manage private equity investments for a living know there is a lot more to it than that. Along with the expertise and hard work that is required, we are faced with many tough decisions on the road to that successful — or not so successful — exit.As I reflect on the investments I have made over 25 plus years, I have distilled the toughest of these decisions down to four: initial investment, management change, the “good money after bad” assessment and when is the right time to sell.1) Initial investment: What to buy and at what price? I believe the initial investment decision determines about two-thirds of the deal’s outcome. Why? If you’ve picked a tough industry, a weak company, designed an inappropriate capital structure and/or overpaid, it will be very difficult to recover from that initial decision. It is possible to improve upon a poor investment by making strategic acquisitions, pivoting the business plan or changing out management (see below), but all of these course-corrections will likely improve upon a mediocre outcome, not provide a great return.2) Assessing management performance: Should they stay or should they go? Management also has a huge effect on the result. Consider the portfolio company where the management is clearly faltering. I, their private equity backer, find it difficult to make a change. My reasoning? These are the people I initially funded. I have successfully worked with them before and I have supported the team through the objections and concerns of my partners. It would be sensible to give them another couple of quarters to get back on plan. After all, they did have some very good reasons for their lack of performance.Sometimes it is acceptable to give management more time to figure things out. However, I have found, more often than not, more time actually hurts. It also seems incredibly difficult to imagine inserting a new person or team into what is probably a difficult situation. Yet, after making the change – assuming I find the right person – things usually get better.3) The “Good Money After Bad” conundrum: Should I continue to fund?Consider, once again, the portfolio company where things are not going well. Yet I, their private equity backer, am spending an inordinate amount of time on this investment. I have a plan but it is going to take just a little more capital and a little more time… or so I think. Circumstances have changed from when I made the initial decision to invest.The correct (but tough) decision may be to not fund further and take my lumps now. It is easy for me to fall blind to this realization because I have been so close to the investment for so long (and likely the initiator of the investment). My judgment may be clouded by my inordinately rosy/optimistic focus on the original outcome I envisioned. [Note: There is a reason why banks have dedicated workout departments. It is a way for a fresh and unvarnished set of eyes to look at the situation.] The easier, but often wrong, decision is to continue to fund because it puts off the inevitable. The tougher call is to just let it go.4) Timing the exit: When is the best time to sell?Unlike my previous two decisions, the decision to sell is not just about getting out of a bad or difficult situation. I have seen too many great investments become poor ones by hanging on too long. Here again I can become complacent and try to expand on a modest gain even though the circumstances may have changed (or are at risk of changing). Sometimes the incentives for both private equity investors and management encourage holding on too long. I must remember that I need to examine our exit plan and timing frequently, maybe as often as on a quarterly basis.None of these are easy decisions to make, particularly in the moment of a live deal. We at Catalyst think of private equity investing as an apprenticeship business. One thing is for sure – we are all going to make mistakes. We must make sure we share those experiences with each other to try to prevent or minimize similar mistakes in the future. Being rigorous around these four decisions helps maximize the value and risk-reward of the portfolio as a whole, which in the end is what matters.Brian Rich is managing partner and a co-founder of Catalyst Investors, a growth equity firm. He started his career as an industrial engineer at Intel before attending Columbia Business School. Rich also founded and managed TD Capital (USA).
Got Big Data? Go Hybrid
by Emil Sayegh
Big data is big business in 2015. A rapid increase in data technologies and computing power has led to more and more enterprises and small businesses around the world accumulating massive amounts of data.Every day, we create 2.5 quintillion bytes of data from sensors gathering climate information, social media posts, digital media, purchase transactions, cell phone GPS signals… the list goes on and on.It’s hard to comprehend just how big that number is. Here’s an easier way to understand it: 90 percent of the data in the world today has been created in the last two years alone. That number is only going to get bigger in the coming years.However, the reality is that building and scaling the infrastructure necessary for big data is an insurmountable task for most businesses.Why Is Big Data Growing Exponentially?Citing a recent Bain & Company study, “Early adopters of Big Data analytics have gained a significant lead over the rest of the corporate world. Examining more than 400 large companies, [it was] found that those with the most advanced analytics capabilities are outperforming competitors by wide margins.”How? Big Data is being used by 94 percent of companies to identify new sources of revenue, and 89 percent of companies are using it to develop new products and services.According to the same Bain & Company study, companies using big data are:• Twice as likely to be in the top quartile of financial performance within their industry• Five times as likely to make decisions much faster than their peers• Three times as likely to execute decisions as intended• Twice as likely to use data very frequently when making decisionsBig Data Requires Robust Computer And Storage InfrastructuresConsidering the growth potential offered by big data implementation, it’s easy to understand why so many companies want to start collecting and processing data. According to a November 2014 survey by Accenture, only 5 percent of companies implement big data strategies solely through internal resources.Small to medium-sized businesses have the least resources available, and are least likely to be able to handle big data needs on their own; according to SMB Group, only 18 percent of small businesses and 57 percent of medium businesses are using big data.The cloud presents an easy and affordable onramp to start gathering, processing and using big data. In many ways, the emergence of cloud and big data are interrelated; there’s a symbiotic relationship between the two where each component drives the growth of the other.But if you’re relying solely on the cloud for your big data needs, you’re not tapping into the full potential of big data. Cloud is known to have I/O limitations. Big data systems need big scalable I/O pipes to perform well. Big data has big needs. Processing and storing enormous amounts of distributed data isn't for just any solution. To get the most out of big data, you need a more complete solution -- one that also includes bare metal servers.Hybrid Hosting To The RescueHybrid hosting combines the power of dedicated hosting with the flexibility and scalability of cloud computing to help accelerate big data deployments. Hybrid allows you to create meaning from the data more quickly, more efficiently and less expensively by utilizing the specific benefits of bare metal servers and the cloud in tandem.Hybrid harnesses the power of bare metal infrastructure for tasks like crunching numbers and analyzing data -- the heavy lifting. Utilizing the power of bare metal meets the high-CPU, high-memory, high-capacity requirements of big data. The cloud is tapped for the rest of big data’s needs: tasks like data rendering and processing. Even though the cloud isn’t processing “the really big stuff,” it still needs to be flexible, portable and quickly deployed, which hybrid hosting delivers in spades.Hybrid use is growing for big data applications, and for good reason. It lets you specify jobs for different storage/compute needs, which is critical in advancing performance of big data hosting platforms. Hybrid also adds a layer of efficiency. The unique features of hybrid hosting provide major advantages for your big data needs:• Bare metal power: Answer high-performance needs and handle extreme big data processing requirements while avoiding the risks of shared I/O that slows down performance.• Scalability: Through cloud, easily meet sudden spikes in requirements for processing in the presentation layer for big data application. You can scale up or down in an instant with one-hour deploy dedicated servers.• Predictable performance: The highly consistent performance of bare metal means you can scale as your operations grow. The variety and customization offered by true hybrid solutions - such as different levels of speed - make sure you have unmetered bandwidth between hybrid-enabled devices.• On-demand hybrid: Host the right application, on the right infrastructure and connect it seamlessly to other services on demand. Choose the speed your application needs – then configure and deploy within minutes.On-demand hybrid hosting adds efficiency to a big data application to easily harness the true power of big data. Cloud has a reputation for being inexpensive, but for many functions, bare metal servers will out-perform and save on cost. And by not having to outsource your big data needs, you’ll save even more money.True hybrid hosting is seamless to your application, and doesn't require you to install any proprietary software or set up special “Connect” configurations or special bridge devices. It leverages the latest technology by introducing the intelligence and automation in the network fabric, enabling rapid provisioning of both dedicated and cloud instances in one private network dedicated to you -- and only you. True hybrid allows customers to scale dedicated and cloud resources within the hybrid network, and also lets them scale the network speed and bandwidth instantly and on demand.Emil Sayegh is CEO of Codero Hosting.
Investors' Appetite for Startups Fed by Stock Market Gains
By Associated Press, Joyce Rosenberg
NEW YORK — Some Entrepreneurs looking for startup funding got a wad of money near the end of last year, but there are concerns the boom may not last.
Startup iFunding is a beneficiary of the surge. The website focused on real estate investing raised nearly $2 million in just a month. Typically, it would take at least six months to raise that kind of cash, says William Skelley, the New York company's CEO.
"It's gone much faster than I thought," said Skelley, who has a background in venture capital investing.
Investors whose portfolios swelled as the Standard & Poor's 500 index rose more than 11 percent last year had more money for alternative investments like small businesses and felt more confident about taking risks on young companies.
But there are concerns about how long the good times will last. The market has been more erratic since the beginning of the year and the S&P 500 dropped 3 percent in January. Some pros also worry that investors may get spooked if high-profile companies that have gotten windfalls — like ride-hailing app Uber — fail.
THE WEALTH FACTOR
One of Skelley's investors, Alicia Syrett, says the stock market factored into her decision to buy a stake in iFunding. Syrett is an angel investor, who focuses on young companies.
"When you see the stock market is up, there's that general feeling of wealth and so you feel comfortable spending more," says Syrett, CEO of Pantegrion Capital, an investment company in New York. She also recently invested in NoMad, a San Francisco company that makes cables for charging smartphones.
The rallying stock market encouraged Zack Schuler to take a chance on a startup.
"If my portfolio is up and it's doing really well and I feel really solid about my long-term financial stability, then I'm willing to gamble on other things," says Schuler, who's based in Los Angeles.
In December, Schuler invested in Buddytruk, a smartphone app that helps people quickly find trucks to help them move or make pickups or deliveries.
Buddytruk CEO Brian Foley found it easy to raise the money at the end of last year. He was seeking $500,000 but got $570,000 in two weeks.
"December is notorious for being the worst month of the year to raise money," said Foley, whose year-old company is based in Santa Monica, California. The company's first round of funding, which began in January 2014 raise $175,000 in near six months. Foley wasn't prepared for the second round's speed.
"I was shocked," he says.
HOW LONG WILL IT LAST?
With the economy still growing and the stock market near historic highs, startups may keep finding people willing to back them.
"Investors are excited by the potential of the companies that are being formed now and are raising money," says Steve Harrick, a partner in the venture capital firm Institutional Venture Partners in Menlo Park, California.
Still, there are concerns of a bubble. Uber's $40 billion valuation has more people looking for a windfall, says Schuler, the Buddytruk investor. But investors could become wary if high-profile startups that are valued at over $1 billion fail, Harrick says.
For now, the pent-up demand for investing after the recession is likely to keep the money flowing, says Tyler Newton, research director with Catalyst Investors, a private equity firm in New York.
"We're maybe in the sixth inning of the long investment cycle," he says.
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Control vital to build a solid hybrid cloud environment
By Alex BarrettModern Infrastructure Editor-in-ChiefWhile many organizations want cloud access control with private cloud, hybrid cloud offers an internal environment coupled with public cloud resources.Automating self-service and workload bursting are the holy grail of a hybrid cloud environment.Baylor College of Medicine, for example, wants to extend its internal private cloud for cloud storage to a provider such as Box, said Alex Izaguirre, vice president and CTO of IT at the college. However, the private cloud must respect the college's compliance and governance needs.The college currently has a VMware-based private cloud that it offers to researchers through CliQr orchestration technology. Izaguirre hopes to eventually incorporate a cloud storage service to researchers as part of the college's self-service interface. That should go a long way toward improving collaboration."Today, if a researcher wants to share a gene sequencing sample, which can be very large, they have to put that data on a thumb drive and mail it," Izaguirre said. "Imagine if you could go on to some cloud service using our portal, create an account on a cloud drive and simply share the folder. There's no shipping anything, no waiting -- it's a much more efficient way to work."Bursting onto the cloud sceneSimilarly, a growing startup is looking to move from its dedicated private cloud to on-demand public resources. Quertle is developing a specialized search engine for the biomedical industry and recently moved its performance-intensive application to a dedicated private cloud at Codero Hosting. The company anticipates using Codero's public cloud resources as demand grows."Today, we're serving up webpages, but as the content grows, we'll need more resources," said Jeff Saffer, president at Quertle.Saffer believes that cloud bursting should be relatively easy. That's because Codero offers customers the ability to easily provision resources in the cloud portion of its data center from the same portal it uses to manage its dedicated environment. Codero uses software-defined networking (SDN) to create a logical bridge between dedicated and public cloud resources.Building a hybrid cloud is no picnicCreating a hybrid environment between dedicated and public resources is usually a nightmare … involving running cables and installing networking devices to try to bridge the dedicated and cloud networks, said Emil Sayegh, CEO and president at Codero. It's extremely difficult and expensive. The bridge is often a single point of failure, Sayegh said.NASA's Jet Propulsion Laboratory (JPL) has built a true hybrid cloud environment as part of its GovCloud, said Jonathan Chiang, chief IT engineer for NASA's Jet Propulsion Laboratory."We've extended out network via IPsec VPN tunnels across multiple clouds such that if you spin up a VM in AWS or [Microsoft] Azure it just looks like a node on our network," Chiang said.But that's still not a perfect environment."Now we have multiple interfaces to multiple clouds -- including multiple credentials," Chiang said.The organization still has a ways to go before it reaches what Chiang envisions as its ultimate destination: "a single pane of glass … that lets us use the right cloud for the right workload.”
The Crystal Ball: Hosting Industry Predictions for 2015 and Beyond
By Emil SayeghAround this time of year, a lot of articles crop up predicting what’s going to happen in technology next year. Quite often, the predictions are pretty safe and the observations are obvious. For a decade now, Chandler, our Senior VP of Product Development, and I have been getting a kick out of reading these types of articles because all too often, they don’t say much – “Everything will become more important” and so on.The industry expects technologies to mature and propagate; there’s nothing revolutionary about that, especially since we’re in a golden age of cloud technology and evolution. Big data, mobile apps and business analytics – we’ve been talking about these things for years. The difference now boils down to the cloud platforms that support these apps: Which cloud platforms are being used? Which ones meet the needs of today’s technology demands, and the demands ahead?What’s Next for the Cloud?When it comes to the future of the cloud and hosting, one thing is for certain: Hybrid hosting environments and hybrid cloud are winning the day. The lines between dedicated hosting and cloud hosting are blurring more than ever. Pure cloud offerings aren’t holding up under the demands of I/O hungry applications and privacy/security considerations. All analyst reports indicate that the vast majority of the market is looking to hybrid for solutions.Goodbye Windows 2003, Hello CloudThe planned obsolescence of Microsoft’s Windows Server 2003 product in July of next year will bring people to the shores of hybrid and the hybrid cloud. Sure, a number of applications fade into the sunset each year, but Windows Server 2003 has an exceptionally large base to this day. It was a wildly successful server operating system and we’re going to see capital evaluations offset by operating cost advantages.Now customers will be faced with a decision: Do I upgrade my Windows 2003 license and hardware, or do I go with a new way of doing things such as cloud and hosting? Because of the tremendous value proposition of cloud and hosting, the rate of Microsoft upgrades won’t be very high, meaning an even greater number of migrations from corporate IT data centers to Cloud and Hosting platforms.Containers and DockerDocker, Docker and more Docker. Building, shipping and running any app, anywhere. This is more than just a trend; Docker is about easily moving workloads around different points in the infrastructure, and there’s no better place to do that securely and efficiently than a truly on-demand hybrid cloud platform.People will learn the true value of being able to move an application from a small cloud instance to a dedicated server, and what it can bring in terms of servicing next generation workloads. You’ll see new management UIs, new controls and new ways to build and test Docker containers, new ways to cluster them. It’ll be fast and furious, like the beginning of cloud all over again.Cloud Commodity Players Racing to the BottomGoogle, Microsoft, VMware and others will continue to mindlessly cut prices because they can’t get traction in the cloud market against Amazon. This battle for market share is shaping into a race to be the low-cost cloud leader, which, as it turns out, is going to be a race to the bottom for generic non-value add infrastructure providers. They all have “AWS envy” and what all the competitors are missing is that they aren’t different enough from AWS to win.The Death of Private CloudsSay goodbye to that old fashioned, internally-run private cloud. It’s just a matter of time before internally-run private clouds become a relic of the past, just like everyone has been saying. The truth? It was never a thing to begin with.A private cloud is nothing but compute infrastructure with a layer of virtualization running on top. When the public cloud emerged, marketers latched onto the word cloud and called it “Private Cloud.” In a face-off between private cloud and public cloud, or even private cloud and a hosted private cloud, the benefits and availability of services that you get in a hosted service expose the many inadequacies and low value return of private cloud adoption. Put a fork in it.Microsoft Evangelizing the CloudMicrosoft is coming up increasingly in the cloud conversation. You’re late, Microsoft, but welcome to the party. CEO Satya Nadella has been pushing a cloud-first strategy, and that means their enterprise base will be heading that way. But will it go to Microsoft or to someone else?No longer just a playground for test and dev environments, Microsoft has plans to push their substantial enterprise customers to their own cloud for services. The push starts now, and lately Microsoft has been in a price war with AWS and Google, a literal race to the bottom. Our prediction is that Microsoft’s push will evangelize the untapped market on cloud. Some of those customers will consider Azure, but many others will go to other cloud providers.AWS Will Sell or Spin OffAmazon Web Services is a cash cow for its parent company Amazon. Amazon itself is hemorrhaging money each and every quarter to the tune of hundreds of millions of dollars. There’s always an element of growth vs. profit, but it’s hard to recall anything on this scale for this long. It may not be long before shareholders get restless.AWS is a profitable and hugely successful business that is being challenged by Google and Microsoft – both companies that have heavy resources and motives to take some of that cloud market share. There’s too much pressure on the parent company to keep this up, and AWS will be released to its own accord.Mobile Will Liberate Emerging MarketsWe have already seen the power of social media in politics. We see this everyday in the United States. But what fascinates me is how mobile is shaping the global economy and politics in regions of the world that have never known the power of immediate information flow. It’s like watching a collective-consciousness being born.Emerging markets will continue to be a significant driving force in internet adoption, due in a large part to the affordability of smart phones. This trend will continue throughout China, India, Indonesia, Nigeria, Mexico, Philippines, Egypt, Vietnam, South Africa, Pakistan and Thailand just to name a few. And mark my words, where free access to information comes, so too will come economic opportunity and sometimes-massive changes to political regimes. We are happy to enable this freedom by providing the needed infrastructure.The Internet of Things ExpandsRefrigerators that tell you when you’re out of milk. Thermostats that report the temperature in your home to your phone. Watches that tell you your stocks’ prices. Big deal, right? Yes, actually this is a very big deal. Smart devices, or the Internet of Things (IoT), are a classic case of big data. Many collection points, massive amounts of data, lots of analysis to get through and a need to process it quickly.Hybrid environments and hybrid cloud will emerge the winner for these workloads. They’re the perfect match for IoT because of its multi-purpose, multi-layered construction that gives you high performance, but also scalability. IoT will push more hybrid adoption than ever before. Never in history have we had such cheap sensors, cheap bandwidth, cheap processing, such ubiquitous wireless coverage and IPv6, which is literally supplying a limitless supply of internet addresses.Data, Big Data, Big Data – Boom Goes the DataIoT will get bigger, HortonWorks will go IPO, and all of sudden it will seem like the world has woken up to the power of data. Real-time data is rising rapidly, the ability to find that data ubiquitous, the ability to share it simple. As the costs of compute and storage fall, you will see more and more new companies create and use next generation big data apps. Whether it be for data mining for large corporations or pattern-recognition for some of the hardest, most complex problems we face, have no doubt that these trends will drive the solutions we see. We also predict that data generation and storage will skyrocket to an estimated 15,000 Exabytes by the end of 2015 according to IDC. That’s 15,000,000,000,000,000,000,000 bytes. Sheesh…I remember when I had 12MB of RAM and thought that was a lot. (Did I just date myself?)“Fog” Computing takes RootThe “fog” comes to the forefront: We have written a lot about about cloud computing… some could say we have based our careers on it. But there’s a change coming.Cloud has always been “where data is stored outside of your local device,” often on servers in data centers sometimes hundreds or thousands of miles from where the data was generated. But in the age of hybrid and in combination with IoT, we expect more of the network intelligence to reside closer to the source of the data: what technologists call the network edge or the fog.Look for the rise of fog computing architectures leveraging hybrid networking. Most data will end up too noisy or latency-sensitive (it needs to get there and back super-fast) to be carried all the way back to the cloud. The next frontier in IoT application development will involve both hybrid and fog components to make them work.The state of technology is never static, and the story of cloud is far from complete. Hybrid is the bridge to the future. It’s the only technology that can keep up with the pace of technological development. It’s a pace that’s accelerating like never before, we’re in a race to adopt technologies across the board. Once upon a time the technology industry had a decade or so to absorb, evolve and perfect technologies when they emerged. And today, that pace is crushed by the rate of change in the industry.Have a prosperous and happy New Year.About the AuthorEmil Sayegh is CEO of Codero Hosting where he is leading the next generation of cloud computing with the hybrid cloud. A cloud visionary and an industry veteran, Emil is credited with launching and leading the very successful cloud computing and hosting business for HP and Rackspace.
Top 10 Pioneers of Growth Equity
GrowthCap has compiled a list of the Top 10 Pioneers of Growth Equity. These investors helped define an asset class and have founded some of the world’s most successful private equity firms along the way. See the full list and insights from the industry’s founding fathers below:“Growth equity and venture capital have had a tremendous impact on both domestic and international economies since I began investing over 40 years ago. Growth stage investing was then a nascent field and I have seen and experienced firsthand the profound benefits of invested capital on companies such as Apple, Office Depot, America Online and many others. These benefits apply equally in fostering business expansion and job growth in the small business community and supporting the continued evolution of developing economies worldwide.” – Alan Patricof, Founder of Greycroft Partners“The future of private equity is probably as bright today as ever. It’s predicated on the abundance of innovative smart people globally who are willing to take professional risk. It’s also predicated on the lack of social stigma associated with failure. I myself was lucky enough to have invested in Camden Partners because starting the firm allowed me the professional freedom I craved and allowed me to interact with countless amazing people.” – David Warnock, Co-Founder of Camden Partners“The future of growth equity is unbounded, particularly as quality, new companies continually decide to defer IPO’s so they can optimize their debut after key strategies are in place.” – Dick Kramlich, Co-Founder of New Enterprise Associates“The future is bright for growth equity, but it always has been. We have invested in this very same style for over 20 years although it has only recently been called ‘growth equity.’ Given the recent attention to the sub-asset class of growth equity, there will undoubtedly be more managers pursuing a growth equity strategy and therefore more competition. Welcome aboard!” – Brian Rich, Co-Founder of Catalyst InvestorsGrowthCap’s Top 10 Pioneers of Growth Equity1) ALAN PATRICOFFirm: Greycroft PartnersTitle: Founder, Managing DirectorOne of the most telling characteristics of a pioneer is that they become experts in a field as it is first taking shape. In this sense Alan Patricof is a true pioneer and leader in the field of growth equity investing. Alan Patricof is the founder and managing director of Greycroft Partners. The founding of Greycroft alone would define Alan as one of the leading growth investors in the world, but Alan was also one of the first active investors in the formative days of growth equity; he helped create Patricof & Co. Ventures Inc., a predecessor to Apax Partners – today, one of the world’s leading private equity firms with $41 billion under management. With a 40-plus year career in early- and late-stage investing, Alan has been instrumental in transforming the industry into one with broad institutional backing from its early days of almost exclusively high net worth investing. Alan remarked to GrowthCap, “Growth equity and venture capital have had a tremendous impact on both domestic and international economies since I began investing over 40 years ago. Growth stage investing was then a nascent field and I have seen and experienced firsthand the profound benefits of invested capital on companies such as Apple, Office Depot, America Online and many others. These benefits apply equally in fostering business expansion and job growth in the small business community and supporting the continued evolution of developing economies worldwide.”2) DAVID WARNOCKFirm: Camden PartnersTitle: Co-Founder, Senior PartnerPioneers also think broadly and leverage their experience and influence for the betterment of the world around them. With over 30 years of investment experience, David co-founded the leading Baltimore-based growth investment firm Camden Partners in 1995 after spending more than a decade investing in small cap companies with T. Rowe Price. While at Camden, David has focused heavily on the business and education sectors, and has also applied this expertise to benefit the Baltimore community; David is also the founder of Green Street Academy, a charter school that has taken an innovative entrepreneurial approach to teaching students about sustainable business. David spoke with GrowthCap and reflected on his career to date and what lies ahead, “The future of private equity is probably as bright today as ever. It’s predicated on the abundance of innovative smart people globally who are willing to take professional risk. It’s also predicated on the lack of social stigma associated with failure. I myself was lucky enough to have invested in Camden Partners because starting the firm allowed me the professional freedom I craved and allowed me to interact with countless amazing people.”3) DICK KRAMLICHFirm: New Enterprise AssociatesTitle: Chairman, Co-FounderDick was an early investor in Apple Computer for his own account in 1977, and he quickly continued to deliver those types of impressive returns for other investors after founding New Enterprise Associates (NEA) in 1978. During the 20 years Dick was the Managing General Partner of NEA, the partnership achieved top quartile returns for its limited partners by focusing on a variety of venture and growth-stage investing. Since co-founding NEA in 1978, Dick has been involved in ten companies that have grown from start-up or near start-up stage to companies with market value in excess of $1 billion. After such a successful career, how could one not be optimistic about the future of growth equity investment opportunities; Dick said he thinks “the future of growth equity is unbounded, particularly as quality, new companies continually decide to defer IPO’s so they can optimize their debut after key strategies are in place.”4) BRIAN RICHFirm: Catalyst InvestorsTitle: Co-Founder, Managing PartnerBrian Rich is the co-founder of Catalyst Investors and is a veteran growth investor with over 20 years of experience in the business services, technology and wireless sectors. An executive committee member of the National Venture Capital Association’s inaugural Growth Equity Group, Brian has been active in the growth investing ecosystem for the better part of his career. He also founded TD Capital which managed Toronto Dominion Bank’s equity, mezzanine and limited partnership investments from 1995 to 1999. Brian gave his thoughts on the future of the growth equity landscape, “The future is bright for growth equity, but it always has been. We have invested in this very same style for over 20 years although it has only recently been called ‘growth equity.’ Given the recent attention to the sub-asset class of growth equity, there will undoubtedly be more managers pursuing a growth equity strategy and therefore more competition. Welcome aboard!”5) PETER BROOKEFirm: Brooke Private Equity AssociatesTitle: Chairman, Co-FounderMr. Brooke’s career in private equity spans over 50 years. Along the way he founded two of the most successful private equity firms — TA Associates in 1968 and Advent International in 1984. Mr. Brooke helped define private equity as an asset class throughout his career, and was one of the key individuals responsible for building interest in private equity on an international scale, particularly in Europe, Asia, and Latin America. The Boston Business Journal named Mr. Brooke one of Greater Boston’s 100 most influential business people of the 20th century.6) PATRICK WELSHFirm: Welsh, Carson, Anderson & StoweTitle: Co-Founder, General PartnerMr. Welsh was one of the co-founders of Welsh, Carson, Anderson & Stowe (WCAS) in 1979. WCAS has made a name for itself over the decades as a leading growth-oriented investor focused on information & business services and healthcare. It has raised $20 billion to date and gained such titles as Private Equity International’s Mid-Market Firm of the Year in North America. Previously, Mr. Welsh spent 8 years with Citicorp in its Venture Capital group and was President at the time of his departure.7) STEPHEN WOODSUMFirm: Summit PartnersTitle: Founder, Managing DirectorSteve founded Summit Partners in 1984. Since then, Summit has evolved into what is now one of the best-known pure growth equity investment firms in the world, having raised more than $16 billion in capital from a global institutional investor base. Steve’s earlier career was also centered around private company investing, having been a General Partner at TA Associates and an Investment Analyst at First Chicago Investment Corporation. He is also very active in his community with board positions that include City Year, an organization that recruits young people for community service in 24 U.S. cities, the Boys & Girls Clubs of Boston, and Massachusetts General Hospital.8) STEVE DENNINGFirm: General AtlanticTitle: ChairmanSteve is currently Chairman of General Atlantic, having been with the firm since its beginning in 1980. Throughout his career, Steve’s goal has been to partner with strong growth companies led by exceptional management teams in order to help build their organizations into industry leaders. To say he accomplished his goal would be an incredible understatement; Steve has since built General Atlantic into a leading global growth investment firm with 11 offices around the globe. He is also active outside of the world of investments as Chairman of the Board of Trustees of Stanford University and a member of the Board of Directors of The Nature Conservancy.9) JAY HOAGFirm: Technology Crossover VenturesTitle: Founder, General PartnerJay Hoag co-founded Technology Crossover Ventures in 1995, a firm that became known for partnering with its portfolio companies across all stages of their business, even after an eventual IPO. The firm has grown into one of the world’s leading technology-focused investment firms having raised almost $10.0 billion. Jay has been a technology investor for over 32 years, previously acting as Managing Director at Chancellor Capital Management as a venture capitalist and fund manager.10) JERRY MURDOCKFirm: Insight Venture PartnersTitle: Co-FounderJerry Murdock is a co-founder of Insight Venture Partners, a New York-based investment firm focusing on growth-stage software and internet companies that has raised over $8 billion since its founding in 1995. Jerry has 20 years of investment experience and played a leading role in defining the company’s investment strategy. He was primarily responsible for the development of many of the firm’s portfolio investments.
The age of the hybrid cloud is upon us
The age of the hybrid cloud is upon usSpecial Feature: The Art Of The Hybrid CloudBy Drew TurneyA little over a year ago, research firm Gartner reported that hybrid cloud deployments were rare, but that nearly 75 percent of large enterprises were expected to have them by 2015.2014 seems to have proven it right. Firstly, cloud budgets are growing -- 69 percent of respondents in a Dimensional Research study (embedded PDF) sponsored by Equinix expect a larger budget in 2015 for cloud services, and 91 percent of respondents said they'll deploy a cloud of some form in the next 12 months, with 85 percent planning to deploy more than one.It also seems like the initial hype cycle is over, too, with C-level execs understanding the business case rather than simply being terrified that they're missing out on the next big thing. A report from managed services provider Avanade said that 73 percent agree that adopting a hybrid cloud solution will give them an edge over competitors, with 75 percent agreeing that a hybrid cloud strategy should be one of their main priorities next year.But even though hybrid cloud computing is mature, it still has a lot of untapped potential."[So far] no more than 20 percent of large enterprises have implemented hybrid cloud computing beyond simple integration of applications or services. This declines to 10-15 percent for midsize enterprises," Gartner said in its research.A common use of hybrid cloud, according to Gartner, is business continuity and disaster recovery."Built-in redundancy, controlled security, better flexibility," Mark Shirman, CEO of software-as-a-service (SaaS) provider RiverMeadow, said. "Everything that makes the hybrid cloud attractive to businesses makes it the best cloud option for disaster recovery.'
Hybrid now
"If you were to identify the one true benefit of hybrid cloud, it comes down to one point: Choice," said Erez Yarkoni, Telstra executive director of Cloud.Hybrid gives organisations the ability to choose which cloud model suits various parts of their business and the freedom to choose amongst multiple providers, putting what Yarkoni calls an unprecedented level of control with the customer."Cloud providers need to recognise the way forward will be collaboration, not competition," he said. "The organisation that works with multiple vendors to produce a customer-centric solution is the one that will be most successful in the cloud market in 2015."To Mitch Coopet, co-founder and head of product at backup and enterprise file sync/share provider Code42, hybrid's rise is all about the best of both worlds between the consumerisation of IT and enterprise security."People are still largely dabbling with public cloud deployments," he said, "but given the increasing focus on privacy and security [from recent] high-profile hacks, it's no wonder private clouds are on the rise."The idea that we expect to work on both personal and company data from any device we own or use is old news. But Lindsay Brown, Asia-Pacific SaaS division regional director of Citrix, added that security requirements aren't always in lockstep. Often, the cloud deployments that have to enable it are left to catch up, giving enterprise users no choice but to use different kinds."The cloud era assumes we're mobile rather than fixed, personal rather than corporate, wireless rather than wired, and cloud rather than contained," Brown said. "So our traditional ideas of computing are becoming obsolete."However, it's a matter of necessity in more ways than just user or customer choice. HighQ, a cloud services company focusing on legal and financial services, has seen a jump in demand for a hybrid cloud offering from its customers, said CFO Amit Patel."From my conversations with clients and prospects, it's actually being driven more by specific concerns over hosting data in US domiciled clouds because of data sovereignty and the Patriot Act, as opposed to more general concerns about security," he said.Emil Sayegh, CEO of Codero Hosting, said there is also the uncomfortable truth that the big public cloud providers don't want you to realise."The current incarnation of public cloud infrastructure won't be able to handle the workloads and volumes of data generated by next-generation IT."One change that could well reveal the shortcomings of today's public cloud offerings is the Internet of Things, which will see anywhere from 20 billion to 60 billion devices connect networks over the next five years. It's something that Sayegh said will need rapid, on-demand access to bare metal performance, unencumbered by the layers of virtualisation that cloud systems generally use.Another factor driving users to a hybrid approach might also be the lack of contract flexibility they're seeing from the big operators -- especially in a market where you might have to redeploy data quickly and don't want to be locked in."Many tools in the cloud management platform market stop at the migration step or lock customers into runtime overhead or even to specific clouds," said David Cope, VP of Corporate Development and CMO of Cliqr, a company that uses applications profiles to decouple applications from different vendors' cloud infrastructure."Enterprises need the freedom to choose clouds and even change those choices over time, not just for the immediate future, but over the long term."It's a level of flexibility that, according to Jose Duarte, CEO of business software provider Unit4, has been underestimated by the early cloud solution providers."None of them offer it, which limits their market," he said.
Ushering in the hybrid cloud
Despite its seemingly impending popularity, adopting hybrid cloud services isn't going to be a walk in the park. For instance, there are myriad disparate cloud vendors, and if you have data with multiple providers, you'll be dealing with a host of issues that get in the way of interoperability.Any plugins, filters, or adapters you deploy to bridge the gaps between cloud systems that don't interact will just impose the increasing layers of complexity and are a potential hazard.Even if you do manage to program or buy a solution to do it at all, Eldad Farkash, co-founder and CTO of BI and analytics service Sisense, said customers had better hope they've read the fine print thoroughly when they signed up."Be careful about the vendors you choose to make sure they provide the stack so you can use it within [another environment]," he said. "Otherwise, you might find yourself in a situation where the software you rely on is only available in one cloud, and licensing fees prevent its use in another."Even if you can manage all that and your data interacts smoothly across hybrid cloud builds, security is still key -- 53 percent of respondents saw it as a barrier to going hybrid, Gartner found.Lindsay Brown of Citrix agrees, saying that decision makers interviewed for the Citrix Mobility Survey (PDF) confirmed that security is the number one challenge when it comes to mobile."As cloud computing isn't just a product to be unboxed and installed, services need to be provided that allow for tailored approaches where hybrid cloud isn't just accessible, but delivered with the services, security, control, and agility users demand," Brown added.
Rise of a new industry
The large-scale adoption of hybrid services is also going to mean the rapid expansion of a field of cloud and software "brokers" when it gets too specialised or fiddly for the internal resources of most organisations."There's going to be a lot of innovation around moving data between physically isolated and cloud stacks," said Sisense's Eldad Farkash.
SDN Drives Codero's Flexible Hybrid Clouds
MITCH WAGNER, West Coast Bureau Chief, Light Reading
Hosting provider Codero has deployed SDN capabilities, including some of its own "secret sauce," to help it offer flexible hybrid clouds to its customers, allowing them to log in to a portal and configure bare-metal servers, cloud resources and virtual networks on demand.
"As a hosting vendor, automation is one of the highest priorities for us. We have to be able to scale very quickly and we want to be able to do it in a cost-effective and error-free manner," says Emil Sayegh, CEO and President of Codero, which is based in Austin, Texas.Codero has 4,000 customers of all sizes, from small to enterprise, serving Web 2.0, software-as-a-service, e-commerce, gaming, and web development. The company is privately held, backed by Catalyst Investors in New York.Codero sees demand for scalability and high performance from new applications such as big data and the Internet of Things (IoT), says Sayegh. Also, different jobs have different technology needs. "An e-commerce customer might put their customer database on bare metal servers to ensure they're PCI-compliant and have the best performance. They'd couple that with web-heads in the public cloud that scale up and down and are programmable using APIs," Sayegh says.Codero has tens of thousands of servers running in data centers in Chicago, Phoenix and Virginia, along with a new data center in Dallas that opened in April. In Dallas, Codero built an SDN network using Brocade Communications Systems Inc. (Nasdaq: BRCD) VDx switches to achieve greater flexiblity. (See Brocade Debuts OpenDaylight SDN Controller, Brocade: There's Something About the Cloud and Brocade Weaves Software-Based Networking Strategy .)The SDN infrastructure enables customers to configure private networks in a multi-tenant environment. "We have tons of customers routing through the switches, and each of them needs to have a private network that doesn't collide with the other customers," Sayegh says.Virtualization allows Codero to easily move physical switches without interrupting services, Sayegh says.Of course, just using Brocade switches doesn't make a software-defined architecture. Codero uses its own, internally developed software to weave the switches into an on-demand cloud fabric, Sayegh says. Codero declined to provide details about the software, which Sayegh describes as a "secret sauce."In addition to Brocade switches, Codero uses networking hardware and software from Cisco Systems Inc. (Nasdaq: CSCO) and Arista Networks Inc. "We call it ABC," Sayegh says.After building the new data center in Dallas based on the SDN platform, Codero retrofitted its Phoenix data center, and is working on doing the same in its Chicago and Ashburn, Va., locations.Codero has deals with several carriers to connect data centers and enterprise customers. These include XO Communications Inc. , Zayo Group Inc. (NYSE: ZAYO), Level 3 Communications Inc. (Nasdaq: LVLT), Time Warner Cable Inc.(NYSE: TWC) and NTT Communications Corp. (NYSE: NTT)Sayegh warns other cloud providers planning a transition to SDN to avoid fixating on low cost. "If you value uptime, you have to value features more than price," he says. Buying quality technology is worth the investment, he adds.Also, providers shouldn't be overly concerned if staff aren't trained on a platform they're considering: Good staff can be retrained. "A good engineer is a good engineer. A good programmer is a good programmer," Sayegh says.Also, service providers should look for future-proof technology. "Make sure you have a view into your future needs, not just backward-looking into your needs of today and yesterday," Sayegh says.What next? Codero plans to expand into Europe in the first quarter of 2015 and Asia-Pacific in the second half of next year. Its customers have customers in those regions and need to get closer to them, and Codero is following that need. In Europe, Codero is considering either Dublin or Amsterdam for a data center location, with both offering great connectivity. Codero will most likely open a data center in Hong Kong for its Asia-Pacific business.It's also working to bridge its network directly into its customers' facilities, whether that's a data center or colocated servers. Codero will drop-ship a device to the customer's facilities that will give customers the flexibility to move workloads between Codero's platform and the customer's own servers. That project is due for Q1 2015.
FOX Business Elevator Pitch: The judges weigh in on Shoppable
NYU Professor of Innovation Luke Williams, Starvest Partners General Partner Deborah Farrington, and Catalyst Investors Partner Tyler Newton discuss whether they would invest in startup Shoppable.