Wednesday, February 25, 2009
C is for Cloud: Appirio raises Series C from GGV and Sequoia
Chris Barbin
Given today's headlines, we're humbled to announce our Series C funding from GGV Capital(formerly Granite Global Ventures) and Sequoia Capital. Amidst all the uncertainty confronting business and IT in today's economic climate, one thing remains certain: enterprise IT is moving to the cloud. That single idea is at the core of Appirio's business, and is an idea that's worth investing in precisely because we're in the worst spending environment any of us can remember.
The headlines for most venture-backed startups are grim: "Tech start-ups call it quits," writes the Wall Street Journal, as GigaOm describes "VCs sowing panic in their portfolio companies." We remember the buzz created by Sequoia's all-portfolio meeting last fall, featuring a picture of a slaughtered pig with all the fat removed.
Why is Appirio growing so dramatically in this environment?
Its a cliche that the easiest time to raise money is when you don't need it. Appirio's business model is strong and our services business has been profitable since our founding in October 2006. We create substantial value for our clients and share in the rewards of their success.
But it is still "early days" in the business of accelerating the adoption of on-demand in the enterprise, and we're excited to have our new partners at GGV Capital on-board. GGV specializes in deploying expansion capital, and today's investment from GGV and Sequoia Capital will be invaluable in our continued efforts to invest in products built on Force.com & Google App Engine, supporting and evolving our team of cloud computing professionals and investing in and innovating along side our strategic partners Salesforce.com, Google and Facebook.
Consider, for example, our other announcement today-- Appirio's expansion into Japan, the second largest IT market in the world, barely penetrated by traditional packaged application vendors. We believe that Japan has the opportunity to completely leapfrog on-premise packaged software and migrate directly to custom applications developed on an on-demand platform. Being part of this process (and the largest Force.com deployment in the world) is tremendously exciting.
We invite you to get involved. Schedule a discussion with us, take a trial of one of our products, look into joining our team, or even just contribute an idea. The transition to cloud computing is one thing to be certain of, even in these very uncertain times. We look forward to working together!
Labels: Cloud Computing, Google, PaaS, SaaS, salesforce, Sequoia-Capital
Thursday, October 09, 2008
Sequoia Capital Meeting: Our take on the economy and on-demand adoption
Chris Barbin
There's a lot of talk today about a meeting held earlier this week at Sequoia Capital, Appirio's lead backer, with the CEOs of their portfolio companies. The headlines grab your attention: Sequoia has emergency meeting, Sequoia sounds the alarm, Sequoia says to cut expenses now. The meeting was held in confidence, but we thought we'd share our perspective on the condition of the economy, what it means for Appirio, and, most importantly, what it means for customers considering the adoption of on-demand.- SAP customers faced difficulty financing upfront license fees. On-demand customers, on the other hand, pay for their solution as they use it. They don’t need to finance a big up-front investment in a monolithic solution with an uncertain business benefit.
- SAP customers balked at difficult-to-justify maintenance fees. On-demand customers, on the other hand, know what they are paying for — they see continual enhancements to their solutions without expensive upgrades or patches.
- SAP only learned of this in the final days of the quarter. On-demand customers, on the other hand, don’t need to engage in the edge-of-the-cliff negotiations with their technology vendors at the end of the quarter. These vendors know that they will only keep their customers for as long as they are able to create value, and need to be working every day to keep their customers happy.
The average company spends 4-6% of revenue on IT-- for a customer at $1B in revenue, that is $40M - 60M in annual IT expense. Organizations that 'cloud-source' their IT infrastructure to on-demand providers can reduce this to 2-3%... a 50% reduction. This model provides cash critical in a down economy, and also provides executives flexibility and innovation that on-premise vendors cannot.
Labels: CloudComputing, investors, Microsoft Exchange, SaaS, SAP, Sequoia-Capital, Software as a Service, VC
