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Enterprise Infrastructure – What we are working on at Lightspeed in 2011 February 8, 2011

Posted by John Vrionis in 2011, Cloud Computing, database, datacenter, enterprise infrastructure, Storage, Uncategorized, virtualization.
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We continue to be very enthusiastic about the tremendous amount of opportunity in the Enterprise Infrastructure sector for 2011. In the past few years, we’ve seen significant innovation in technologies such as virtualization, flash memory and distributed databases and applications. When combined with business model shifts (cloud computing) and strong macroeconomic forces (reduced R&D budgets), a “perfect storm” is created where the IT ecosystem becomes ripe for disruption. Startups can take advantage of the changing seas and ride the subsequent waves to emerge as leaders in new categories. For this post, I’ll highlight three categories where I believe we’ll see significant enterprise adoption in 2011 – big data solutions, use cases for cloud and virtualizing the network. Startups in these categories are now at the point where ideas have become stable products and science experiments have transformed into solutions.

1. BIG DATA SOLUTIONS GROW UP

There’s been a lot of “big noise” about “Big Data” for the past couple of years but, there has been “little” clarity for the traditional Enterprise customer. Hadoop, Map Reduce, Cassandra, NoSQL – all interesting ideas, but what Enterprise IT needs is solutions. Solutions come when there are products optimized to solve the challenges with specific applications. Most of the exciting, fast growing technology companies we hear about daily (Facebook, Zynga, Twitter, Groupon, LinkedIn, Google, etc) are incredibly efficient data-centric businesses. These companies collect, analyze and leverage massive amounts of data and use it as a fundamental competitive weapon. In terms of really working with “Big Data,” Google started it. Larry and Serge taught the world that analyzing more information generates better results than any algorithm. These high-profile web companies created technologies to solve problems other companies had not faced before. In this copycat world we live in, Enterprise IT is ready to follow the consumer-tech leaders. The best enterprise companies are working hard to leverage vast amounts of data in order to make better decisions and deliver better products. At Lightspeed, we invested in companies like DataStax (www.datastax.com) and MapR Technologies (www.maprtech.com) because these are startups building solutions that enable Enterprise IT to work with promising Big Data platforms like Cassandra and Hadoop. With enterprise-grade solutions now available, I expect 2011 to be a year when tinkering leaps to full-scale engagement because these new platforms will deliver a meaningful advantage to Enterprise customers.

2. CLOUD COMPUTING FINDS ITS ENTERPRISE USE CASES

The hype around “Cloud Computing” is officially everywhere. My mom, who is in her sixties (sorry Mom) and just learned to text, recently asked me about Cloud Computing. Apparently she’s seen the commercials. In Enterprise IT circles and VC offices, there’s a lot of discussion around “Public” clouds vs. “Private” clouds; Infrastructure as a Service vs. Platforms as a Service; and the pros and cons of each. It’s all valuable theoretical debate, but people need to focus on the use cases and the specific economics of a particular “cloud” or platform configuration. As of right now, not every Enterprise IT use case fits the cloud model. In fact, most don’t. But there are three in particular that definitely do — application management, network and systems management and tier 2 and 3 storage. At Lightspeed, we’ve invested in a number of companies such as AppDynamics (www.appdynamics.com) and Cirtas (www.cirtas.com) which deliver solutions that are designed from the ground up to enable enterprise class customers to leverage the fundamental advantages of “Cloud Computing” – agility, leveraged resources, and a flexible cost model. Highly dynamic, distributed applications are being developed at an accelerating rate and represent an ideal use case for cloud environments when coupled with a solution like the one offered by AppDynamics which drives resource utilization based on application level demands. Similarly, Enterprise IT storage buyers have gotten smarter about tiering data among various levels of storage media, and infrequently accessed data is a great fit for cloud storage. Cloud controllers like the one offered by Cirtas enable enterprises to have the performance, security and reliability they are used to with traditional internal solutions but leverage the economics of the cloud.

3. VIRTUALIZING THE NETWORK

To date, the story of virtualization has been primarily about servers and storage. Tremendous innovation from VMware led the way for an entirely new set of companies to emerge in the data center infrastructure ecosystem. At Lightspeed, we talk about the fundamental pillars of the data center as application and systems management, servers, storage, and networking. Given all the advancement and activity around the first three, I think it’s about time the network caught up. As Enterprise IT continues to virtualize more of the data center and adopts cloud computing models (public or private), the network fundamentals are being forced to evolve as well. Networking solutions that decouple hardware from software are better aligned with the data center of the future. Companies such as Embrane (www.embrane.com) and Nicira Networks (www.nicira.com) are tackling this challenge head on and I believe 2011 will be the year where this fundamental segment of data center infrastructure starts to see meaningful momentum.

Top 5 trends for enterprise cloud computing in 2010 January 5, 2010

Posted by ravimhatre in Cloud Computing, datacenter, enterprise infrastructure, Uncategorized, virtualization.
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by Ravi Mhatre, Lightspeed Venuter Partners

Lightspeed has invested across multiple enterprise infrastructure areas  including database virtualization (Delphix), datacenter and cloud infrastructure (AppDynamics, Mulesoft, Optier) and storage virtualization (Fusion I/O, Pliant, Nimble).

This year we wanted to profile several important trends that we see emerging for Cloud Computing in 2010:
1. Enterprises move beyond experimentation with the cloud. Enterprises will start to deploy production cloud stacks with thousands of simultaneous VMs. They will increasingly be used as a resource for both pre-production and production workloads.  CIOs and IT managers will test the benefits of creating and managing internal, elastic virtual datacenters – self-service, automated infrastructure with integrated and variable chargeback and billing capabilities, all built on commodity hardware.

2.  Management software to deal with scaled cloud environments  moves to the forefront. As infrastructure environments become increasingly dynamic and virtualized, the “virtual datacenter” or VDC will emerge as the new enterprise compute platform.  New management platforms must be developed to apply policy and automation across thousands of transient servers,  fluid underlying storage and networking resource pools, and variable workloads which often need to be dynamically migrated from one part of the VDC to another. Without new management tools, enterprises will fall short in their ability to achieve true “cloud economics” in their cloud environments.


3. Enterprise policy for dealing with public clouds starts to emerge.
To counter the security and financial concerns around internal developers using public cloud providers such as Amazon on an ad hoc basis, CIOs and CFOs will start to craft their enterprises’ public cloud policies and centralize purchasing and procurement.  Larger enterprises, due to security or compliance restrictions may initially prioritize internal private cloud development to recognize the benefits of cloud computing without compromising their data.

4. Public Clouds; “Its not just about Amazon”. Other mid and large-sized vendors (i.e. Microsoft, IBM, Rackspace, AT&T, Verizon, and others) continue to gain share in this rapidly growing market and 3’d party software matures which enables tier-2 and tier-3 service providers to get into the game of providing cloud services as a complement to traditional web and server hosting. EC2 becomes the commodity service offering as higher-end providers seek to differentiate their cloud offerings with SLA-based premium services and better management capabilities.

5. VMware has to rethink its business model. As Hyper-V,Xen and KVM continue to commoditize the hypervisor and gain enterprise market share,  cloud computing starts to encroach on traditional  ESX/vSphere use cases for application and server consolidation.   Value continues to move up the stack into integrated management features and scale-out application support. To counter enterprise adoption of other hypervisor and cloud over-lay platforms, VMware will be forced to adjust pricing and licensing models to account for scale-out cloud deployments on top of hundreds or thousands of commodity servers.

Who buys extended warranties? Poor people. June 16, 2009

Posted by jeremyliew in Uncategorized.
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NY Times has a really interesting article about who buys extended warranties:

The study reported that consumers are far likelier to buy warranties for products they consider enjoyable (like iPods) than for dull products (like landline phones), simply because, dollar for dollar, they value the fun products more. Therefore, they would be more upset at the prospect of losing them.

The study also found that people with lower incomes are more likely to buy such warranties, because they know they cannot afford to replace the products.

It also notes that many consumer advocacy groups consider extended warranties to be a bad deal. Interesting research.

Flash in the Datacenter? March 31, 2009

Posted by Barry Eggers in flash, Uncategorized.
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Lightspeed portfolio company Pliant secured $15M in Series C funding earlier this month to bring its Enterprise Flash SSDs (EFDs) to Datacenter markets. While Pliant’s solution offers enterprise users the performance, reliability, and durability they can only dream of, there will need to be additional enabling technologies in order to propel SSDs into the datacenter mainstream.

The first wave of Flash SSDs solve performance problems – any IT administrator will tell you there are alot of these “hotspots” to fix, albeit they are regarded collectively as a fast-growing niche market.

The second wave is where SSDs will make their mark against rotating disks (the last bag o’ parts in the datacenter). This is the cost/performance wave. In this wave, Flash SSDs combined with cheap rotating storage will provide the capacity and performance of premium rotating storage solutions – at a fraction of the price. These “hybrid” systems represent a huge new opportunity in the datacenter (as discussed in our 2009 Enterprise IT predictions), and the large storage OEMs all know it.

But in order for this wave to happen, new file systems – ones that intelligently move data between performance resources and capacity resources – will need to be developed and deployed – more on that later…

More insights on Facebook, Twitter and Myspace from danah boyd March 15, 2009

Posted by jeremyliew in Uncategorized.
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danah boyd recely gave a talk at the Microsoft Research Tech Fest on her research on social media titled “Social Media is here to stay … now what?“. Most interesting to me were her insights into how youth and adults use the various social sites (Facebook, Twitter, Myspace etc) differently. I’ve bolded some of the sections that I thought were most insightful

Let’s now turn our attention to youth for a moment. As many of you know, youth played a central role in the rise of some social media. Now, many adults have jumped in, but what they are doing there is often very different than what young people are doing. This showcases the ways in which some tools are used differently by different groups.

For American teenagers, social network sites became a social hangout space, not unlike the malls in which I grew up or the dance halls of yesteryears. This was a place to gather with friends from school and church when in-person encounters were not viable. Unlike many adults, teenagers were never really networking. They were socializing in pre-exiting groups.

Social network sites became critically important to them because this was where they sat and gossiped, jockeyed for status, and functioned as digital flaneurs. They used these tools to see and be seen. Those using MySpace put great effort into decorating their profile and fleshing out their “About Me” section. The features and functionality of Facebook were fundamentally different, but virtual pets and quizzes served similar self-expression purposes on Facebook.

Teen conversations may appear completely irrational, or pointless at best. “Yo, wazzup?” “Not much, how you?” may not seem like much to an outsider, but this is a form of social grooming. It’s a way of checking in, confirming friendships, and negotiating social waters.

Adults have approached Facebook in very different ways. Adults are not hanging out on Facebook. They are more likely to respond to status messages than start a conversation on someone’s wall (unless it’s their birthday of course). Adults aren’t really decorating their profiles or making sure that their About Me’s are up-to-date. Adults, far more than teens, are using Facebook for its intended purpose as a social utility. For example, it is a tool for communicating with the past.

Adults may giggle about having run-ins with mates from high school, but underneath it all, many of them are curious. This isn’t that different than the school reunion. We all poo-poo the reunion, but secretly, we really want to know what happened to Bobbi Sue. Nowhere is this dynamic more visible than in the recent “25 Things” phenomena. While teens have been filling out personality quizzes since the dawn of social media, most adults only went through this phase once, as a newbie when they felt as though they really needed to forward the chain letter to 10 friends or else. The “25 Things” phenomenon took me by surprise until I started thinking about the intended audience. Teenagers craft quizzes for themselves and their friends. Adults are crafting them to show-off to people from the past and connect the dots between different audiences as a way of coping with the awkwardness of collapsed contexts.

Social media continues to be age-graded. Right now, Twitter is all the rage, but are kids using it? For the most part, no. It’s not the act of creating and sharing social nuggets that’s the issue. Teens are actively using Facebook status update, MySpace bulletins, and IM away messages to share their views on the day and their mood of the moment. So why not Twitter? While it’s possible to make Twitter “private,” the culture of Twitter is all about participation in a large public square. From the digerati seeking widespread attention to the politically minded hoping to appear on CNN, many are leveraging Twitter to be part of a broad dialogue. Teens are much more motivated to talk only with their friends and they learned a harsh lesson with social network sites. Even if they are just trying to talk to their friends, those who hold power over them are going to access everything they wrote if it’s in public. While the ethos among teens is “public by default, private when necessary,” many are learning that it’s just not worth it to have a worrying mother obsess over every mood you seek to convey. This dynamic showcases how social factors are key to the adoption of new forms of social media.

The NY Times Magazine has an article this Sunday, “Growing up on Facebook” that reaffirms danah’s point that adults use Facebook (and other social media) for reconnecting with their past:

Ever since I signed up a couple of months ago, I have felt thrust into a perpetual episode of “This Is Your Life” (complete with commercials). “Friends” from nursery school have resurfaced, as well as high-school teachers (including the one who pinned me to a wall during a graduation party and slurred, “You’re not much to look at now, but when you’re 30 you’re gonna be terrific”). I have reconnected with the brother of a friend who was killed; rediscovered college chums and colleagues from my early days in New York. I am by turns amused, touched and horrified by these gentle breezes and icy blasts from the past.
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All of which is possible because I actually have one — a past, that is. As do most people my age, and apparently, we’re digging its excavation: there was an estimated 276 percent increase in Facebook users ages 35-54 during the last six months of 2008, bringing their total to almost seven million. Still, that number is dwarfed by the nearly 25 million users under 25. That gives me pause. They can’t be doing what we’re doing, right? What do they have to look back on?

Even a cursory glance at Myspace and Facebook pages of young people show that they have an entirely different use case;the “grooming” of existing social relationships that danah talks about.

Enterprise Infrastructure Predictions for 2009 December 5, 2008

Posted by John Vrionis in Cloud Computing, datacenter, enterprise infrastructure, Uncategorized.
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Barry Eggers and I teamed up again this year to make a few predictions about major trends to watch out for in Enterprise Infrastructure in 2009. But before we get into what we’re seeing in our crystal balls, we thought we should grade our 2008 Enterprise Infrastructure Predictions:


1. Flash-based storage makes a move towards the datacenter: A-

While 2008 was not “the year of the enterprise flash drive” as we suggested it might be, market momentum is clearly building. EMC and Sun announced enterprise storage offerings that incorporate flash drives. IBM and Dell have publicly declared their interests. Activity among private companies, including subsystems and systems companies, continues to increase.


2. Virtualization extends to the desktop: C

The big guys decided to supplement “make” with “buy” – MSFT bought Calista (a Lightspeed company) and Kidaro, VMWR purchased Thinstall. However, the market has been slower to develop than we initially predicted, and with big IT budgets constrained in 2009, we expect this market to slip into 2010 and beyond.


3. The Battle for the Top of the Rack (TOR) heats up: B+

CSCO and VMWR have decided to play nice for the time being, but there is a line of private companies that will battle CSCO in the near future, including high density 10G switching players like Arista (with a formidable team lead by ex-CSCO Jayshree Ullal and Andy B), Woven (lead by Ex-3COM exec Jeff Thurmond) and the I/O virtualization guys Aprius (a Lightspeed company), 3Leaf, and Xsigo. It’s still CSCO’s market to lose, but don’t count the private guys out.


And now, for the 2009 Enterprise Infrastructure Predictions:

It will, no doubt, be a challenging year for enterprise infrastructure, as with other sectors. The enterprise focus on green 2.0 (reduced energy usage) may be temporarily replaced by a focus on green 1.0 (as in money, reduced expenses, increased revenues, and short ROI periods). Despite the challenges, we do see some innovative ideas gaining traction:


1. Internal and external enterprise class clouds building momentum:

VMware is hyping its Datacenter OS and vCloud initiatives. IBM, MSFT, Sun, and HP have all indicated their enterprise class offerings will be ready for prime time in 2009. Expect increased marketing muscle touting key features – reliability, performance, security, SLAs – as differentiators (vs Amazon, Google and each other). We expect to see leading private companies emerge that are offering innovative software which enables enterprise customers to take the leap and benefit from the economic advantages of the enterprise cloud.


2. Hybrid Storage solutions gain mindshare with enterprise customers:

Given the growing trend of using flash storage in the Enterprise datacenter, expect to see an increase in innovative “Hybrid” solutions that combine flash storage with good old fashioned rotating disk drives. In these systems, the flash storage provides the “turbo” performance for apps that require it, while the rotating disks provide large amounts of inexpensive storage capacity for less demanding apps. Taken together, these hybrid systems aim to significantly reduce the total cost of storage while increasing performance and capacity.


3. The rise of serverless computing – two trends collide:

Hypervisors have made servers more efficient, allowing them to run multiple applications concurrently on the same system. In parallel, we have seen a monumental shift towards enterprise infrastructure apps, such as storage, security, and networking, running on standard servers (ie appliances) instead of proprietary hardware. Taking the two trends together, in 2009, we will see multiple appliances combined onto a common physical platform. More importantly, we will see enterprise infrastructure apps and compute apps combined into a common server platform within the datacenter. The computing vendors will view this as a way to offer and control enterprise applications. The enterprise application providers will view it as a way to do “serverless computing”. Either way, the customer wins. Less physical servers means lower upfront capex and lower TCO.


4. GPU computing starts getting serious attention (again):

Nvidia continues to develop and improve the interface to its GPUs which have hundreds of processing cores. The tantalizing possibilities for cost savings and application acceleration will drive further investigation into the possibilities of using GPUs for mainstream computing (despite previous hiccups from some venture backed companies). There are significant programming model obstacles to overcome, but we prefer to view that as the opportunity. Perhaps one of the Cloud providers will over GPU clusters as a high end service. What do you think Amazon?

Going dark until the new year December 22, 2007

Posted by jeremyliew in Uncategorized.
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Happy holidays!

Please do me a favor and change your RSS feed June 22, 2007

Posted by jeremyliew in Uncategorized.
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I have only just installed Feedburner (slow learner) and am trying to get a better handle on my traffic through feed readers.

If you’re getting this through a reader, would you please redirect your reader to:

feeds.feedburner.com/lightspeedblog

or just click through if you’re using a web based reader

thanks a LOT.

Alltheweb and Altavista better than Google for general search? April 26, 2007

Posted by jeremyliew in Uncategorized.
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Searchengineland points to an interesting article in PC World which pitted the top search engines against each other to determine which had the best (ie most relevant) search results.

Their conclusion was that Google had the best overall results across multiple query types (general search, image search, video search etc), but:

two other services topped it–barely–in our text-search tests.

(Text-search is general web search). These two services were Alltheweb and Altavista, both owned by Yahoo – the chart of results is here

These results don’t differ all that much from what we found in testing the various search options at AOL when I was there a couple of years ago. When stripped of UI and branding, most users couldn’t tell the difference in quality between search results. When UI and branding was returned, most people thought that Google was the best search engine.

This speaks to the power of branding in the third phase of competition of consumer internet companies, as I have blogged about in the past. First comes distribution, then product and finally branding. It explains why, even though Google’s general web search isn’t head and shoulders better than the other search engines any more, it continues to win market share.

It’s All About the Team March 5, 2007

Posted by John Vrionis in advertising, browsers, Consumer internet, Digital Media, Ecommerce, Entrepreneur, Infrastructure, Internet, Security, Semiconductor, social networks, start-up, startups, Storage, Uncategorized.
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As a venture capitalist, I often get the question, ‘Is it people or market?’

My answer is ‘Yes.’

There’s no doubt that great markets facilitate the building of great companies. But as we saw during the bubble, great markets can facilitate the development of some not-so-great companies as well. When talking with aspiring entrepreneurs I try to emphasize that finding the big idea or the big market shouldn’t be their first priority.

Building the right founding team should be.

In a recent Fortune interview with Jim Collins, author of “Built to Last” and “Good to Great,” he commented:

“Our research shows a somewhat negative correlation between pioneering a great idea and building a great company. Many of the greatest [companies] started with either no great idea or even failed ideas. Sony started with a failed rice cooker. Marriott started as a single root beer stand. Bill Hewlett and Dave Packard’s great idea was simply to work together – two best friends who trusted each other – while their first four product failed to get the company out of the garage. They followed the ‘first who’ approach to entrepreneurship: First figure out your partners, then figure out what ideas to pursue. The most important thing isn’t the market you target, the product you develop, or the financing, but the founding team. Starting a company is like scaling an unclimbed face – you don’t know what the mountain will throw at you, so you must pick the right partners, who share your values, on whom you can depend, and who can adapt.”

A great team in a bad market can still build a successful company, perhaps at small scale. More often, like Sony, Marriott and HP, a great team will change course as they learn that their initial market is a difficult one, and they will find their way to a bigger and better opportunity.

A second rate team can also build a successful company in a great market. But they will find themselves facing increasing competition and the company may not stay successful for long.

There’s no substitute for being part of a great team. Resist the temptation to settle for second rate co-founders or employees, or for divergent visions. The extra time to find the right people to work with is always worthwhile. I firmly believe that teams of great people, firmly bound together by shared ethics, vision and values, will always find a way to be successful.