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10 hot cloud startups to watch

Jeff Vance | March 6, 2013
After evaluating more than 150 new cloud ventures, here are the top 10 cloud startups. These companies are shaping--or have the potential to shape--how the cloud computing market will evolve.

Founded: September 2010

Funding: $10 million in angel funding from BDC Venture Capital, Covington Capital and private investors.

Why they're on this list: 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.

AppZero also staged a solid push in Startup50 voting, winning the overall competition with 17 percent of the vote total. Why does that matter?

What voting proves to me is that the startup is focused enough on marketing and PR to effectively get its message out. It also shows that the message resonates well enough to entice third-parties to support it. If you think this is trivial, you're forgetting that plenty of technically superior startups have failed over the years because they failed to connect with prospective customers.

Market Potential and Competitive Landscape: Gartner predicts that the cloud Infrastructure-as-a-Service (IaaS) spending will exceed $72 billion, (42 percent CAGR) by 2016. Competitors include dinCloud, Eucalyptus, RingCube, Nebula and Rackspace.

2. Aryaka Networks

What they do: Provide cloud-based WAN optimization and application acceleration services.

Headquarters: Milpitas, Calif.

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're on this list: 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 a direct L2 connections) to one or more POP. 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.

Moreover, Aryaka has a solid management team. CEO Ajit Gupta Founded Speedera and sold it to Akamai for $500 million. The management team has a solid track record in the traffic acceleration space. Aryaka also finished second in Startup50 voting with more than 12 percent of the total.


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