We had a nice chat with Mr. “Jay Chapel”, CEO of the USA-based start-up “Ostrato” about his Company.
Below is the interview :
1. What is it exactly that you do and what your start-up is all about?
Ostrato cloudSM™ empowers IT with a single integrated platform for provisioning, governing and managing all its cloud-based services and applications through a clean, user friendly interface. Our intelligent and automated solution addresses an Enterprises inability to centrally broker and manage on- and off-premise services found in today’s complex, hybrid cloud world, and IT’s need for visibility, control and automation over the usage of these resources.
1. We streamline the cloud Adoption process which provides Enterprises agility and cost savings
2. We reduce risk by providing enterprises integrated Security and Financial Governance across a multi-cloud environment
3. And by using a single integrated portal we reduce the complexity IT now has with Managing multiple on- and off-premise cloud services
2. When has your startup been founded? And what stage is your startup currently at?
Ostrato was founded in June 2013. The solution was prototyped early in 2012 with two Federal agencies as a services engagement. We secured initial funding in May 2013 in order to productize and continue the development of the cloudSM software platform. In November we secured and installed our first pilot customers, and in February 2014 we secured our first customer. We now have 3 customers and several more pilots in place – we are focused on customer acquisition and platform growth in 2014.
3. What is your startup’s business model and how does it work?
We focus on a subscription-based license model aligned to cloud usage, but also offer a traditional license model for those who still want to spend cap ex on software licenses.
Currently we sell cloudSM direct using a combination of Inside and Outside Sales. Once we capture enough customer validation points, we will look to sign up SIs and Value Added Resellers (VARs) as Resellers and Integrators (White Label / OEM). The SI community has been extremely receptive to our message and solution, as they require a platform to compliment their overall cloud migration and management strategy.
4. How did your team meet? And who in your team does what?
We met working together for Micromuse and then IBM after we were acquired, we have +12 years of successfully working together and posses very strong backgrounds in B2B Enterprise software sales, sales management and software development, and have a solid mix of
start up, ownership, and international experience amongst the team as well. The team consists of:• Jay Chapel, CEO – Led $150M+ International Business Unit; IBM, Micromuse, Teleglobe, & SRA
• Michael Biddick, CTO – Initial developer of Ostrato cloudSM™; Editor, Author, & Speaker; Fusion PPT, Booz Allen Hamilton
• Brock Spradling, Director of Sales – IBM, Micromuse, Alcatel, & US Navy; Federal & Commercial
• Hani Bandi, Director of Product – IBM, Micromuse, Concord, & Verizon; 2 Patents co-authored
• Bob Chase, Director of Engineering – TNS, VM Software, & Scoreboard; 3 start-ups
5. What, exactly, makes you different from existing options, what will make your product and/or service stand out in the marketplace? In other words what’s unique about you and what’s new about what you make?
Ostrato’s solution is designed specifically to address an enterprises multi-cloud requirements, and our technical advantage is based on the interoperability, scale, and simplicity of our cloudSM orchestration engine (OE) – the ability to federate and manage tens of thousands of virtual workloads in a hybrid cloud environment. Our patent pending cloudSM Orchestration Engine powers three key differentiators:
A clean, secure, Google-like holistic service catalog allows IT to define the cloud services a user can consume and the user to use a single integrated UI across multiple cloud providers.
A simple API layer for Enterprise to Cloud / Cloud to Enterprise integration – we do not use agents, and can provision services in an instant across multiple cloud providers.
We provide very granular audit, spend and usage analytics; we define permissions by User, Role and Project thru a simple RBAC process.
6. What is your growth like? And what milestones has your startup achieved so far?
We are just hitting our growth curve as we have began to turn up customers and increase the pilot pipeline – we have solid expectations for 2014.
We have hit many milestones since our inception 12 months ago related to product, people and customer acquisition but most important is the validation of our technology, the approach, and the excitement we hear from prospects when we provide our demo’s – that’s the key.
7. Who are your competitors? And what is your start-up’s competitive advantage over them?
Competition includes Gravitant, enStratius (Dell – $100MM exit), RightScale, Jamcracker, and ServiceMesh (CSC – $350MM exit). None are ‘dominant’ players and each has gaps in architecture, brokering or management capabilities, license costs, and/or delivery model. In short it is a ‘whitespace’ discussion with customers, as this is a newly emerging problem.
8. What obstacles did you face and how did you overcome them?
Interesting, everything is an obstacle or an opportunity – space, hiring, web site, customer acquisition, marketing, and funding to name a few. I will narrow in on funding – need to approach it like sales. Network for intro’s, build a pipeline of prospects, move them through the funnel, get a lot of no’s and focus on the ‘maybes’
9. What are the key things about your field that outsiders don’t understand?
Moving to the cloud does not always equate to cost savings for an organization for a multitude of reasons including cloud sprawl, increased IT administration, unmanaged usage, and lack of budget controls – these are major concerns for enterprises and not easy problems to address in a mufti-cloud environment.
10. Why are you going to succeed?
Great People, awesome technology, product differentiation, market opportunity, passionate customer base, and solid operational execution.
The premise for our cloudSM platform is based on an Enterprise’s adoption and use of multiple private and/or public clouds, and the corresponding challenges created by this hybrid IT approach. There are multiple reasons for an Enterprise to have a multi-cloud strategy; these include interoperability, portability, cost, security, and development environment preferences, to name a few.
11. If your startup succeeds, what additional areas might you be able to expand into?
We will look to expand functionality to broaden from cloud management to cloud service management, and broaden our capabilities to include more than mulit-cloud provisioning, governance, management, and reporting either through platform development or acquisition.
This will include tighter integration into automation, security, and monitoring platforms, in addition functionality such as application containerization, workload migration, triggers, actions and other console derived interactions.
12. Why did you choose this idea and concept to build your start-up based on?
Our co-founder owns a services company, and they kept coming across customers asking them about ‘cloud brokering’ or the need to provision, govern, manage and report across this newly forming hybrid environment. After evaluating the market requirements on behalf of these customers and the explosion of cloud computing (Private, Public, and Hybrid), and the fact that many co’s looking to address this problem lacked features or they did not approach today’s modern IT problems with a scalable, open architecture approach we decided to build a prototype and test the thesis.
13. What have you learned so far from launching your idea?
The hybrid IT problem is real, the problem is also complex, the terms cloud management and cloud brokerage are over used and generally not well understood, cloud is real, public cloud is real, private cloud is not going away and customers require visibility, automation and orchestration across this very complex and dynamic infrastructure. While agility and choice are important to the enterprise, they can not come with out cost management and user governance, and the ability to control access and manage spend. In addition we have gotten some GREAT ideas from our customers as we think how to solve their problems, and their input into the platform and our road map are invaluable.
14. Six months from now, what’s going to be your biggest problem?
I think the biggest will always be customer acquisition and consistent revenue growth but continuing to find and hire quality people to expand our business will be huge.
And don’t do too many things at once. Any entrepreneur knows that doing lots of things and wearing many hats is part of the job. Getting through the to-do list is really just a time management and/or delegation issue.
There must only be one hard problem we are aiming to solve and lots of smaller problems or opportunities as we like to call them.All of your energy, focus, and momentum must be put towards this one big challenge – customer acquisition.
15. What’s the benefit for the customer/user?
The premise for our cloudSM platform is based on an Enterprise’s adoption and use of multiple private and/or public clouds, and the corresponding challenges created by this hybrid IT approach. There are multiple reasons for an Enterprise to have a mufti-cloud strategy; these include interoperability, portability, cost, security, and development environment preferences, to name a few.
Ostrato’s solution is designed specifically to address these requirements, and our technical advantage is based on the interoperability, scale, and simplicity of our cloudSM orchestration engine (OE) – the ability to federate and manage on tens of thousands of virtual workloads in a hybrid cloud environment.
16. How did customers / users find out about you?
No magic here – Cold Calling, Referrals, LinkedIn, Events, Conferences, Webinars, Press Releases, Analyst Calls, PPC, Blogs, Video’s and anything else we can think of to drive pipeline…
Currently we sell cloudSM direct using a combination of Inside and Outside Sales. Once we capture enough customer validation points, we will look to sign up SIs and Value Added Resellers (VARs) as Resellers and Integrators (White Label / OEM). The SI community has been extremely receptive to our message and solution, as they require a platform to compliment their overall cloud migration and management strategy.
17. Who are your current customers / users? Who are your target customers / users?
Our target market includes commercial enterprises and Federal agencies using two or more Public, Private, or Hybrid cloud services (IT-as-a-Service (Iaas) and Platform-as-a-Service (PaaS)), plus Systems Integrators (SIs) and Managed Service Providers (MSPs) who provide ‘Broker-as-a-Service.’ This multi-cloud / multi-service environment creates challenges – no single point of control for cloud access; inability to prevent cost overruns due to cloud sprawl ; lack of multi-Cloud to Enterprise automation; and extreme difficulties in manually tracking cloud spend by user, project, and provider.
Our current customers fit this profile – vertically agnostic, but progressive with their use of cloud services.
18. Where do new customers / users come from and what makes new customers/users try you?
Answered in 16.Our exceptional technology drives key business outcomes for our customers:
• Reduced IT cloud administration through ‘a single pane of glass’
• REST-based API drives simple, agile multi-Cloud to IT interaction
• Automated resource parking / scheduling to minimize spend
• A clearly defined and logical RBAC model governs usage
• Intuitive UI brokers multiple clouds for improved user experience
• Multi-cloud access management using SSO
• Meta tagging for usage and charge back to validate ROI’s
19. What do your customers / users say about your product and/or service?
Generally feedback on the platform, architecture and UI are very good – clean, user-friendly, modern, open architecture, very fast, and easy to navigate. What we currently lack are features – we have the core foundation in place, so customers / users can see the logic in how we are addressing multiple problems for them, but we need to have more features covering a deeper set of challenges per CSP. We have a very mature technology for 12 months in.
20. How are you going to scale?
We will tackle that challenge at the appropriate time – we have built our platform for ‘scale’, but in order to scale the business we will need more customers to better understand buying patterns, associated ROI, and the right channels to drive the business until that point this conversation is premature. We need focus on the key sales and product delivery milestones for 2014.
21. What’s the biggest missing feature? The one thing customers/users keep asking for?
Based on our market analysis customers have requested to add functionality that would enable our platform to automatically ingest pricing for analysis and comparison to increase cloud-related ROI from their public cloud providers – this feature build is in progress. This includes spot, reserved, and on-dmenad instance pricing in the AWS world.
22. Are you going to internationalize? And if yes how are you planning to expand your start-up’s operations accordingly?
Yes, at some point in the future when we get the right amount of traction, we have already talked to prospects outside of NA, plus wee have international experience on the team, so we are of the challenges you have in rolling out international operations and the additional funding it will require.
It is essential, before entering a foreign market that we clearly identify the motivations behind the decision to explore entering the international marketplace. We will need to examine what our domestic marketing strategy has been and how the domestic plan employed by our company on a local level needs to be tailored to be positively received in the proposed international country – most likely and English speaking location given the demands on documentation, support, and the like.
23. How big do you think you can get? Why? And how you are planning to achieve your goals?
We would not be here if we did not think we could not succeed and the market opportunity was not here, a few facts: Hybrid Cloud and IaaS Broker are included in Gartner’s “Top 10 Strategic Technology Trends for 2014.” Cloud adoption & spend is now a reality, to the tune of $47B in 2013, and will double in less than 4yrs; in addition 30% of Global 1000 co’s in 2014 will use 2 or more cloud providers, services, up from 5% in 2013.
This all equates to opportunity and we plan to achieve this with a solid mix of technology, differentiation, people and execution.
24. Are you looking to hire a new workforce? And if yes, what job vacancies do you currently offer and where can potential applicants contact you at?
Yes, we are looking for a Pre-Sales / Tech Sales resource in the DC metro area and are putting that job req in place as we speak – job reqs can be found at http://www.ostrato.com/about-us/careers/.
We just hired three additional developers – a Front End/UI guy, and two server side folks focused on Orchestration Engine coding.
25. Are you looking for partnership opportunities or funding from Venture Capitals (VC) or other funding sources? Or your business is self-sustainable? And if the first option applies where can potential partners / investors contact you at?
Yes, we are looking for additional funding sources and we can be contacted at jchapel@ostrato.com. Ostrato cloudSM™ is a hybrid cloud service management software platform that provides Enterprises with a single pane of glass for the provisioning, governance, and management of all their of cloud-based services. Our amazingly simple user interface and patent pending Orchestration Engine (OE) provide the visibility and control IT teams need to effectively secure and manage their developing cloud-based infrastructure.
26. What advice do you have for fresh entrepreneurs?
Engage prospects / customers as early as possible in the cycle to validate your assumptions and technology, listen very carefully and understand the objections and why, and surround yourself with smart, energetic people. Oh, and fund raising is fun, treat it as a learning opportunity, its time sucking but valuable.