The corporate side of cloud computing isn’t small potatoes by any stretch. Analyst firm IDC reports the sector is growing 25 percent a year, and projects it to be a $55.5 billion market over the next three years. So where are the opportunities in the enterprise space?
Dean Dzurilla, CEO of Austin-based vConstruct and former Bostonian, will tell you he’s found a big one. Dzurilla’s team isn’t building the next sexy socialCRM or web-based listening tool, they’re focusing on one of information technology’s unsung heroes: data migration. Dzurilla would love to tell you he had the vision from day one for vConstruct’s web app MigrationPath, but as with other innovations, the business model was borne out of necessity.
“In 2009, we had an epiphany after doing migrations from other platforms to NetSuite,” says Dzurilla. “That was enough to justify winding down the services business and start thinking about productizing.” It wasn’t a tough segue for Dzurilla, having cut his teeth at NetSuite selling SaaS solutions for a few years before his bootstrapping efforts at vConstruct.
That was back in 2006 when “cloud computing” was referred to as software-as-a-service (SaaS). We both laugh as we hear SaaS, remarking at how archaic a term it seems after only a few years. “SaaS never really stuck, says Dzurilla. “I’m not exactly sure why cloud computing has.”
If you talk to early adopters or the resident geek in the next cubicle, the term cloud computing takes on an almost magical tone, a panacea for what ails businesses and consumers alike. Songs, documents, photos, bank accounts, all easily accessible, as the argument goes. It’s almost as if there’s a Geek Squad contingency following us around, constantly installing, updating, and securing all the software and hardware it takes to run our digital lives.
Terminology aside, vConstruct has found a sweet spot. The company’s MigrationPath product is a web app that moves helps companies move data to the cloud or from one cloud app to another. In human-speak, that means vConstruct has software technology that makes it easy to insure sure you have the right information in the right system at the right time.
That’s an important element, especially for app providers like Salesforce, as they’re scrutinized on the ability to get subscription renewals. If a customer can’t rollout the application or users become frustrated, the model breaks down. And while some analysts are playing down cloud computing’s merits after last week’s Amazon cloud burst, it remains a lucrative and growing market with few industries unaffected by the draw of on-demand services and fewer IT headaches.
If anything, Amazon’s vulnerability illuminates why most organizations look to the cloud in the first place. Maintaining big iron and application infrastructure isn’t core to most businesses. That’s a fundamental selling point for the companies operating in the cloud’s ecosystem.
Understaffed professional services firms, IT teams, and the app providers themselves are key markets for vConstruct’s product. System integrators and VARs need scale and repeatability, something vConstruct says is key as some companies are now on their second or third cloud rollout.
“Some of our more savvy clients are now handling the core implementation and planning steps,” add Dzurilla. “They can use MigrationPath to accelerate things like system consolidation so they can focus on rolling out new capabilities that align with the business.”
One of vConstruct’s early clients is Insperity, a business services provider with a profile ideal for vConstruct’s model. Insperity delivers a portfolio of services over the internet to help companies improve business performance, mostly under the “workforce optimization” umbrella.
Dzurilla tells me in one instance, Insperity reduced the time it took to migrate its data to 15 minutes instead of almost seven hours. It’s those types of scenarios that keeps Dzurilla’s phone buzzing.
One of the other areas that’s projected to be a boon for vConstruct’s pipeline is the flurry of mergers and acquisitions. As companies merge or reorganize, there’s typically some level of consolidation needed. By eliminating multiple systems and removing redundant capabilities, costs savings can be realized. Unfortunately, timelines are often unrealistic for IT organizations to unify systems and data integrity is of course, mission-critical.
In fact, European IT consultancy Bloor Research says more than 80 percent of data migrations aren’t delivered on time or on budget. Moreover, it pegs those costs and time overruns at 30 and 40 percent respectively.
With those kind of challenges, it’s no surprise that the companies driving much of the innovation around the cloud are tech bellwethers like Amazon and Google, with large data centers and enough engineers to keep things humming. Not every consumer-facing cloud provider is delivering mission-critical apps, but the experiences we have on Netflix and Pandora tend to spill over and influence business processes inside the firewall. The term tech pundits tend to reference is the “consumerization of IT,” something that will continue to rear its head in product roadmaps everywhere.
“There’s very few companies that have nailed this market,” he says. “Systems are very complex and when you find people that have the experience, well, they’re very expensive,” he added. By the end of the year VConstruct hopes to have almost twenty people in Austin, no small task for a bootstrapped company competing for high-tech talent in a high-tech city. But that’s part of the challenge and what keeps Dzurilla grounded in his vision.
It’s like he told me at the beginning of our meeting.
“Cloud computing isn’t easy. It’s just easier.”
Cross-posting some stuff from my wife’s Tumblr site.
We stay in a rock star hotel in Austin, because Austin is the self-proclaimed capital of Texan cool. City motto: Keep Austin Weird. The Hotel Saint Cecilia has a sister motel just around the corner, on the hip strip of Congress where the vintage stores and the food caravans are; both hotels are funky.