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Venture Investing and the Cloud
LP Meeting
Glenn Solomon - 2012
2012

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Purpose of Today’s Presentation
Over the next half hour you will….
➜ Learn more about why VCs continue to like the cloud
➜ Get a sense for the models VCs like
➜ Gain some practical experience on how to approach VCs
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Agenda
Cloud Computing: Why VCs Still Love the Cloud
What’s Disrupting The Cloud
➜Mobile’s Effect on the Cloud
➜Very Big Data
➜SMB: The Final Frontier
Getting Funded: Dos and Don’ts
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The Cloud Continues to Grow
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Cloud Companies: Numerous and Specific
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Strong Consolidation in Cloud
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Cloud Companies Beat Market Expectations
*Morgan Stanley
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Still Lots To Do
Priorities for Improving Cloud Apps
% of Respondents
Unimportant Of Little Importance Somewhat Important Important Very Important
Ensuring security & compliance 11% 35% 48%
Improving manageability 16% 45% 36%
Deeper integration with on-premise apps 18% 48% 29%
Deeper integration with other cloud apps 19% 50% 26%
Providing mobile access 19% 42% 33%
Performance monitoring/management 19% 43% 32%
Improving data quality 23% 34% 39%
Reducing SaaS siloes 19% 42% 31%
Improving application governance 20% 39% 34%
Reporting & analytics 19% 39% 33%
Driving user adoption/productivity 25% 35% 31%
*Appirio
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Agenda
Cloud Computing: Why VCs Still Love the Cloud
What’s Disrupting The Cloud
➜ Mobile’s Effect on the Cloud
➜ Very Big Data
➜SMB: The Final Frontier
Getting Funded: Dos and Don’ts
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A Mobile-First, PC-Second World
Q1 2011 Q1 2012
Q1 2011 Q1 2012
17% 39% 46%
29%
+12% +7%
Almost a third of American adults own Nearly half of all American adults
tablets own smartphones
*Morgan Stanley, Pell Research
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Mobile’s Weakness: Storage
Mobile users rely on the cloud to access and store data
Mobile Data per Year
15.6 GB
*T-Mobile Average Internal Storage
Facebook Photos per Year
761 MB
*Facebook, Pixable
Average iTunes Music Library 16 GB
9 GB
*TuneUp
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Popular Mobile Apps that Rely on the Public Cloud
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Opportunities in Mobile and the Cloud
Mobile Security
Sharing Data Across
Mobile Platforms
Crossing the Content
Creation Gap
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Agenda
Cloud Computing: Why VCs Still Love the Cloud
What’s Disrupting The Cloud
➜ Mobile’s Effect on the Cloud
➜ Very Big Data
➜SMB: The Final Frontier
Getting Funded: Dos and Don’ts
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Facebook: A Lesson in Big Data
Every day Facebook processes…
• 300M new photos
• 2.5B new items shared
+ • 2.7B “Likes”
• 70,000 queries (Friend Suggestions)
More than 500TB of data
*Facebook
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Big Data Needs for the Cloud
Storage
• Need inexpensive, dense storage
• High performance
Computation
• Efficient analysis over large data sets (Friend Suggestions)
• Big Data Databases (NoSQL / NewSQL)
Infrastructure
• Performance at Scale
• Security
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Exciting Disruptors in Cloud / Big Data Infrastructure
Storage Computation Infrastructure
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Opportunities in Big Data and the Cloud
Easy, Real-Time
Analytics
High Performance
Multitenancy
Cloud Security and
Compliance
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Agenda
Cloud Computing: Why VCs Still Love the Cloud
What’s Disrupting The Cloud
➜ Mobile’s Effect on the Cloud
➜ Very Big Data
➜ SMB: The Final Frontier
Getting Funded: Dos and Don’ts
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SMBs Flocking to the Cloud
• SMBs adding services. 39% of SMBs projected to pay for 1+
cloud services in three years; current 29%. SMBs with cloud
services will be using 3.3 services in three years; current 2 services.
• Hybrid model. Within three years, 43% of workload will be on paid
cloud services, 28% on-premise, 29% free / bundled.
• SaaS and IaaS adoption. SMBs adopting SaaS and IaaS services
are larger, more growth-oriented companies
*Microsoft SMB Cloud Adoption Study 2011 / William Blair
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Tech Sales 1.0
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What SMBs Love: Tech Sales 2.0
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Who’s Doing It Right
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Succeeding in SMB Cloud
Leverage Social
Media
Disrupt Traditional
Markets
Create Scalable
Processes
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Agenda
Cloud Computing: Why VCs Still Love the Cloud
What’s Disrupting The Cloud
➜ Mobile’s Effect on the Cloud
➜ Very Big Data
➜ SMB: The Final Frontier
Getting Funded: Dos and Don’ts
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Approaching a VC with your Cloud Company
Study the landscape and differentiate
Focus on big market with relevant team
What is your flywheel? Scalability?
Know your financial model
VC partner – chemistry over terms
DO
Use buzzwords
Try to do everything – focus is key
DON’T Maximize valuation over chemistry
Hide your vulnerabilities
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Questions?
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