Is Qualtrics about to go public? A chat with founder Ryan Smith on the IPO question

Qualtrics, an online survey research platform, is listed as tops among likely candidates to go public this year. But is it really going to file and, if so, how close is it to doing that?

I’m betting yes and very soon based on some interesting answers in a recent interview with founder Ryan Smith (see video below).

For the last couple of years, reporters have been asking Smith if he’s about to IPO. Usually, Smith gives some sort of answer about how his company already runs like it’s public, brushing off any notion of such an event — I’ve personally had this conversation with Smith several times, including in this onstage interview from 2016.

But the Provo, Utah-based company seems more ready this year than it ever has, hiring key executives like Microsoft’s Zig Serafin as its COO and nearly doubling its employee base in the last two years, to more than 1,300 people. Qualtrics now serves 8,500 enterprise customers, including more than 65 percent of Fortune 500 companies. It has also expanded operations outside of Utah, to 10 different offices globally, including Seattle, Dallas, Washington, D.C. and even Dublin, Ireland and parts of Australia.

Rough stone rolled into a rocket ship

But no one in Silicon Valley was interested in Utah tech when Qualtrics launched in 2002. The company, like so many of the now unicorn-status startups in Utah, started out as a bootstrapped business and simply had to be a profitable operation from the beginning.

But nearly a decade later all that changed when the company hit $50 million a year in revenue, with $30 million of that in pure profit — all on the simple notion that academics might want some data-driven insights. By then the Utah tech scene was booming from Ogden to Provo, dubbing the area the “Silicon Slopes,” and Accel Partners and Sequoia Capital took notice. They convinced Smith to take an initial $70 million in financing.

The company has only raised one other time, taking in a total of $220 million funding from Accel, Sequoia and Insight Venture Partners, and sending Qualtrics on a rocket ship to the billion-dollar tech company it is now.

“We’re going public”

But Smith, famous for brushing off the IPO question, seemed a bit jumpier when asked about it during a recent visit to his gorgeous new headquarters (complete with a basketball court and a 1950s-inspired soda joint). Instead of the usual spiel I’ve become accustomed to, Smith’s language was a bit more positive.

“We know that there’s a huge opportunity here and we’re being very thoughtful about it because it’s not about going public. Going public is super easy to do. Just file the S-1 and we’re out,” Smith told me. “It’s about being public and how that works and getting the house in order to make sure that that’s the case. We’re going to be a great public company. We’re going public.”

So… soon?

So there you have it for future plans. But when is the crucial part here — and that is something Smith was much more coy about. When asked if he was going this year he simply said, “We’re making good progress there,” and promised TechCrunch would be the first to know.

Keep in mind, there have been several tech companies in the enterprise space that have recently gone public and, according to Smith’s own words in that same interview, have revenues matching Qualtrics, making him feel “great.” While we don’t have direct word on Qualtric’s annual revenue, a couple of analysts I asked estimated it was at least in the $150 million range last year. MuleSoft, another enterprise company that went public last month, logged just under $188 million in 2016 revenue, for comparison.

So there you have it. Stay closely tuned right here for more, because it looks very likely Qualtrics is currently prepping for an IPO.

*This article is part of a larger series focusing on the Utah tech scene. We’re going to be sprinkling several of these articles and videos throughout the TechCrunch newsfeed for the next couple of weeks, so strap on your ski boots and stay tuned as we guide you through the “Silicon Slopes!”

Lucid raises $60M as it plans to dominate market research

Lucid is announcing that it has raised a $60 million round led by North Bridge Growth Equity. It’s the company’s first outside funding since raising a relatively tiny $2.8 million back in 2011.

Founder and CEO Patrick Comer said that in the years between, he deliberately wanted Lucid to “run really, really lean and pour every dollar into growth of product.” Now, however, it’s no longer a question of finding product-market fit — the company says it’s used by more than 500 customers and that revenue has grown 70 percent year-over-year for the past three years.

“Once we move from a position of, ‘What is our product? Is it going to work and will our clients buy it?’ and now that it’s a global scale issue, then we can fund that scale through raising capital,” Comer said. “Because the market is already there — we built it.”

For Lucid, scale means expanding globally, where Comer said he wants to turn the company into the number one player in market research. He said the company’s surveys have international reach, but that’s mostly been thanks to US companies thinking globally. Now, Lucid is looking to establish a presence of its own in Europe, the Middle East and Africa (it already has offices in London and Delhi).

The company was originally known as Federated Sample but rebranded as Lucid in 2015 as its offerings expanded to include products like Fulcrum, its automated sample marketplace. Comer described Lucid as the market industry’s “programmatic disruptor” — by providing an automated way to test ads and survey consumers, he said the company is giving marketers access to unprecedented “speed and scale.”

“With programmatic [advertising], you could target the right impression with the right message, but you could never test the message with the right audience,” Comer said.

That doesn’t put Lucid in competition with companies like Survey Monkey and Qualtrics, he added. Instead, they can use Lucid to find the audience to take the surveys on their platforms.

Comer also suggested that this round should encourage venture capitalists to take a closer look at New Orleans, where Lucid is headquartered.

“People ask the question: Can you build a category defining unicorn outside of the coasts?” he said. “The answer is yes.”

Featured Image: Lucid

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Okta pops as Wall Street continues to take a shine to the enterprise

Okta came out of the gate strong today in its Wall Street debut, attracting the type of institutional investors CEO Todd McKinnon says should be around for the long haul. This IPO comes at a time when Wall Street appears ready to embrace enterprise technology companies.

Okta set its price yesterday at $17 a share, raising at least $187 million. The firm could raise more if its underwriters trigger their ability to buy more shares at the original IPO price, which seems like a no-brainer, given Okta’s strong first-day performance.

Okta is a cloud identity management company that helps large companies’ users connect securely to cloud services, while easing the burden of signing into multiple applications. The unicorn is a pure cloud company with a classic subscription model, an approach that seems to be finally well understood by public market investors.

It’s been quite a year so far for enterprise IPOs, as Okta joins Alteryx and MuleSoft in going public, with Cloudera (which filed a week ago) and Yext on deck.

Batter up

McKinnon said with the dearth of IPOs last year, he felt like there was pent-up public market demand for new offerings, something that worked in his favor. But it was more than that. The CEO also noted that institutional investors came ready to play in his company’s IPO, and they had done their homework regarding the state of cloud technology.

“What was interesting was the number of high-quality long-term mutual funds that were interested,” McKinnon told TechCrunch. “It’s a testament to what we’ve done and the knowledge of this model, the cloud in general and why we are important to that story long term,” he said.

McKinnon admitted that portfolio managers’ high-level knowledge of the cloud took him somewhat by surprise. Perhaps that’s because nearly everyone in the business world today uses one cloud application or another. It’s hard to avoid Office 365, G Suite, Salesforce, Box, Workday and the other large cloud services.

Certainly managing identity is paramount to that story, and a technology that crosses every cloud service. It’s imperative to ensure that only an authorized individual can sign into a particular service. Yet you also need to make it simple enough to access multiple applications without putting undo hardship on the user — and McKinnon found in conversations with potential investors, as cloud users themselves, that this was clearly understood.

Loading the bases

That Okta had a solid first day result shouldn’t have come as an incredible surprise. Companies that raise their IPO range pre-debut shows that there is enough demand for their shares in the market, allowing them to raise the price without putting at risk the number of shares they had hoped to sell.

By pricing at the upper-end of its extended range, Okta made the point all the more obvious.

Jason Lemkin, a well-known SaaS venture capitalist, told TechCrunch that one reason for Okta’s popularity today was that its growth “is insane,” and that the company has “the full package.”

What Lemkin saw was a company growing around 15 percent over its last two reported sequential quarters, a pace of growth that many other companies at Okta’s age (founded in 2009) and scale (nine-figure revenue) would kill for.

As for the full package, Lemkin was referring to the fact that Okta is moving both its top and bottom lines in the correct directions. So, from its fiscal quarter ending October 31, 2016 to its fiscal quarter ending January 31 2017, Okta saw its revenue grow from $42.3 million to $48.8 million, while at the same time it saw its net loss fall from $21.9 million to $18.2 million.

Growing revenue quickly in combination with falling losses is a potent mix — and one that points to (eventual) profits.

Bringing it home

While Okta had a great debut, it doesn’t necessarily follow that all subsequent enterprise-facing IPOs will have a similarly stellar performance. What today’s IPO does show is that the market is welcoming for enterprise-facing cloud companies, especially if their financials look positive. If not, then Lemkin justifiably wonders if they can do as well.

Gene Munster, a former Apple analyst turned venture capitalist, thinks even the poorer-performing companies could do well under the correct market conditions. Speaking yesterday on TechCrunch’s Equity podcast, Munster indicated that the shift that took place through 2016, which saw the value of enterprise-facing revenues increase, will hold, as long as public-market investors continue to covet “visibility.”

Visibility in this case means predictability; companies that sell products on a recurring basis, as SaaS firms do, often have very predictable growth. That consistency helps investors place bets with more confidence, allowing for slightly richer valuations than other companies with similar revenue figures, but non-recurring sales, could command.

Asked if the technology IPO market was in fact as strong as some observers view it to be, Munster said that he believes it is for now, but that could change for some public market investors if Congress fails to enact tax reform.

If that happens, IPOs could slow. No one wants to go public in a hurricane.

Outside events out of a company’s control, such as last night’s missile attack in Syria, can have an impact on an IPO happening the following day. In the end, the market took a long-term view of the company instead of focusing on the current news cycle.

Okta closed at a lofty $23.51 a share with a market cap of $2.13 billion, perhaps giving one more data point that it’s shaping up to be a good year for enterprise tech IPOs.

Alex Wilhelm is the editor-in-chief of Crunchbase News.

Featured Image: Okta

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Tracking the explosive growth of open-source software

Many of today’s hottest new enterprise technologies are centered around free, “open-source” technology. As a result, many big companies — from financial giants to retailers to services firms — are building their businesses around new, community-based technology that represents a sea change from the IT practices of the past.

But how can corporate customers — and investors — evaluate all these new open-source offerings? How can they tell which projects (often strangely named: Ansible, Vagrant, Gradle) are generating the most customer traction? Which ones have the biggest followings among software developers, and the most potential to capture market share?

These questions are especially tough to answer because most open-source companies are still private, and don’t have to disclose key user and financial metrics. (Though that’s changing — open-source giant Cloudera recently announced plans to go public, increasing the market’s focus on open-source technology.)

That’s why we decided to create a new, detailed index to track popular open-source software projects, and gain some insights into the new companies powered by these technologies. It is the Battery Open-Source Software Index (BOSS Index), which we’ve spent months putting together with publicly available information and are introducing here. We hope to update it quarterly — and the index should gain more relevance as more open-source companies using some of these projects grow and go public.

The index contains 40 open-source projects, gleaned from an initial scouring of projects listed on the GitHub source-code repository site, as well as Datamation, an enterprise-IT publication that also tracks open-source projects. The top 25 are listed below, and the full list can be found on our website.

We focused on projects in enterprise IT-related areas like IT operations, including technology powering operating and provisioning systems; data and analytics, including tools for artificial intelligence and machine learning as well as databases; and DevOps, which includes projects focused on the hot new trend of “containers,” which help people develop software quickly in a sort of self-contained environment.

THE BATTERY OPEN-SOURCE SOFTWARE INDEX
Rank Project Name Overall Project Rating Category Sample of Related Companies
1 Linux 100.00 IT Operations Red Hat, Ubuntu
2 Git 31.10 DevOps GitHub, GitLab
3 MySQL 25.23 Data & Analytics Oracle
4 Node.js 22.75 DevOps NodeSource, Rising Stack
5 Docker 22.61 DevOps Docker
6 Hadoop 16.19 Data & Analytics Cloudera, Hortonworks
7 Elasticsearch 15.72 Data & Analytics Elastic
8 Spark 14.99 Data & Analytics Databricks
9 MongoDB 14.68 Data & Analytics MongoDB
10 Selenium 12.81 DevOps Sauce Labs, BrowserStack
11 NPM 12.31 DevOps NPM
12 Redis 11.61 Data & Analytics Redis Labs
13 Tomcat 11.04 IT Operations NA
14 Jenkins 10.47 DevOps CloudBees
15 Vagrant 8.15 IT Operations HashiCorp
16 Postgres 8.02 Data & Analytics EnterpriseDB
17 Gradle 7.68 DevOps Gradle
18 Nginx 7.57 IT Operations Nginx
19 Ansible 7.42 IT Operations Ansible
20 Kafka 7.22 Data & Analytics Confluent
21 GitLab 6.42 DevOps GitLab
22 Hbase 6.41 Data & Analytics Cloudera, Hortonworks
23 Chef 6.37 IT Operations Chef*
24 TensorFlow 5.97 Data & Analytics Google
25 Cassandra 5.74 Data & Analytics DataStax

Companies ranked according to four factors. Overall project rating represents the geometric mean of two of the four individual scores, which reflect online discussion activity; search activity; jobs impact; and GitHub activity. All data is as of February 9, 2017.

There are some very well-known names on the list, including projects that have spawned big companies. They include Linux, which underlies Red Hat; MySQL, which powers the company of the same name and was bought by Sun Microsystems (now part of Oracle) for $1 billion in 2008; and Hadoop, which brought us Cloudera and Hortonworks.

But some more-obscure names, like Selenium, also rank highly, indicating there is plenty of grassroots innovation happening in the open-source sector — and many new projects out there that are spawning valuable companies. Still, our research also found that having lots of users for your open-source project does not automatically translate into creating a commercially viable company.

We ranked the projects according to four factors, which included:

  • Public interest in the project, as measured by Google search activity;
  • User activity, gauged by mentions of the projects on the popular tech-discussion board Stack Overflow;
  • Jobs impact, measured by the number of job postings citing each open-source project listed on the job boards Indeed and Simply Hired; and
  • Impact in the open-source community, tracked by measuring a project’s influence on GitHub. Specifically we tracked the number of “forks,” or extensions, built on each project; the number of GitHub “stars” a company received, indicating its popularity; and the number of “watches,” another popularity indicator, all as of February 9, 2017.

Because some projects may have done extremely well, or poorly, on certain criteria — perhaps one had an off-the-charts Google search number, but a sub-par job-postings score — we threw out the top and bottom individual-criteria scores for each project. This is a methodology called “trimmed mean,” and it’s similar to what happens in Olympic gymnastics, where officials throw out an athlete’s highest and lowest scores from each judge and average the remaining ones. (We had no East German judges in our competition, but we are being careful.)

Even so, there’s always room for improvement. Some adoption and popularity criteria, such as download metrics, are obviously somewhat difficult to measure, and surely we haven’t captured all the hottest, new emerging tools. Though with our planned quarterly updates, we should be able to track new leaders as they emerge. So we’d love feedback from the community to improve our numbers, and the index, over time. Please let us know at opensource@battery.com if you have further insights into any of these metrics.

Here are some other key takeaways from our research.

Linux, Git, MySQL lead the pack

Perhaps not surprisingly, the open-source project leading our index is Linux, technology that was first released in 1991 and is one of the most widely adopted open-source projects in the world. It is commercialized by companies, including Red Hat, one of the few open-source companies to trade publicly, as well as Ubuntu and SUSE.

Having lots of users for your open-source project does not automatically translate into creating a commercially viable company.

Git, which came in at No. 2 on the list, inspired GitHub and GitLab. The wildly popular open-source project serves as a “version-control system” for tracking changes and coordinating work between software developers.

Also high on the list, at No. 3, was MySQL, the database technology first developed in 1995. MySQL currently helps run huge, Web-scale companies like Google, Facebook and Twitter. But it’s also worth noting that several “NoSQL” database technologies — which are non-relational databases, unlike MySQL, and are often better suited for parsing the unstructured data being thrown off by many companies today — also ranked highly.

These NoSQL technologies include MongoDB, which came in at No. 9 in our index; Redis, which is being commercialized by company Redis Labs, at No. 12; Cassandra, which came in at No. 25 and is behind the database company DataStax; and Elasticsearch at No. 7, which is being commercialized by Elastic.

MongoDB raised a new round of financing in late 2015 — the company is estimated to be valued at around $1.5 billion — and now competes against established database players like Oracle, IBM and Microsoft. Overall, several of these NoSQL vendors are growing independently of one another — quite quickly in some cases — rather than converging into one giant system. This points to further fragmentation in the broader data-infrastructure sector, and could lead to the creation of several strong NoSQL players that could be public companies in the future.

Big data fuels open source

As many organizations struggle to manage huge volumes of structured and unstructured data today — generated by everything from security software to tweets to Web-enabled sensors in manufacturing plants — they are increasingly looking for new data-management and storage solutions. That trend is reflected in our index, as more than a dozen (15) of the 40 projects included are open-source technologies powering databases and data processing.

Hadoop, mentioned previously, is one such technology. But Spark, which is commercialized by companies like Databricks, is another, and ranked eighth on our list.

Other names to know

Docker, the container-technology darling that has helped make software development quicker and more efficient, came in at No. 5 in our index. Many view Docker as a possible replacement for technology from public giant VMware, and the fact that Docker can be easily and cheaply accessed through the open-source community has fueled its adoption.

Docker is also competing with open-source platform technologies like Google’s Kubernetes (No. 33) and Mesos to control the “orchestration” layer in software development, or the ability to manage containers across different software environments.

These open-source projects are not your father’s Sun or Oracle.

Another hot area for open source is “continuous integration and continuous delivery,” or the ability to write software with code that continuously and seamlessly integrates with other platforms. Some tools in this area include Jenkins (No. 14), which is commercially supported by CloudBees, and TravisCI. In the related DevOps area are technologies such as Maven (No. 30), as well as the fast-growing Artifactory binary repository, a software tool designed to optimize the download and storage of binary files, a platform commercialized by JFrog.*

Making it rain

But as we noted earlier, having lots of users — while essential to eventually gaining commercial traction — does not guarantee that an open-source project will make a good business. That takes a lot of hard work and creativity, particularly in structuring new types of business models; leveraging complicated open-source licenses; and tweaking traditional enterprise-sales practices to fit an open-source product, as we discussed in TechCrunch last year.

What’s more, we’ve found that the chances for commercial success for IT companies leveraging open source can sometimes increase if they offer several open-source technologies that can be used together in a sort of “stack.” Elastic has the “ELK” stack, for example, consisting of the open-source Elasticsearch (No. 7 in our index), Kibana (No. 36) and Logstash (No. 29) projects.

Time-series database company InfluxData,* similarly, sells versions of the “TICK” stack — that stands for Telegraf, InfluxDB, Chronograf and Kapacitor. DevOps company HashiCorp, in one final example, has commercialized many open-source projects, including two that made our list, Vagrant (No. 15) and Vault (No. 40). Software developers like to be able to pick their favorite components from these stacks, in keeping with the “best of breed” product mentality that dominates software development today.

These open-source projects are not your father’s Sun or Oracle. But clearly, CIOs at major global companies now rely on open-source technologies — including many of the ones highlighted in our index — to run key segments of their infrastructure, and many of these projects are going to be around for the long haul. Indeed, at an open-source summit that we hosted last year, IT executives from large companies ranging from Goldman Sachs to Capital One discussed their “open-source first” attitude when it comes to deploying new software and infrastructure. And as more open-source-based companies go public in the coming years, we’ll get even more information about how these top projects are performing, and will continue to track their progress and influence on the industry.

*Denotes a Battery portfolio company.

Nothing here is, or should be considered, investment advice or any recommendation or solicitation to buy or sell any security. Certain information in this article has been obtained from third-party sources and, although believed to be reliable, has not been independently verified as to its accuracy, and its completeness cannot be guaranteed.

Featured Image: Bloomberg / Contributor/Getty Images

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Microsoft’s Azure Stack preview adds support for Azure Functions and App Service

Azure Stack is one of Microsoft’s most ambitious projects in the data center space. The goal of Azure Stack is, at its core, to bring many of the features of Microsoft’s Azure cloud computing platform into the enterprise data center. While there are some obvious advantages to using public cloud services like Azure, AWS or Google Cloud, after all, for many customers, running their own hardware is still often more cost-effective or simply a necessity because of regulatory concerns.

Today, Microsoft launched an update to the technical preview of Azure Stack and it’s the first one to offer some of Azure’s more advanced features and some of its platform-as-a-service tools. Specifically, this is the first version of Azure Stack to offer support for Azure Functions, Microsoft’s take on event-driven “serverless” computing (which still needs servers, but almost completely abstracts those away and instead focuses on letting developers kick off parts of their applications when a certain event occurs).

In addition, the release also includes the Azure App Service, Microsoft’s cloud tools for quickly developing cloud-centric applications, as well as updated versions of Azure’s SQL/MySQL database services.

Microsoft currently plans to launch Azure Stack into general availability at some point this year.

Once it’s available, it’ll go up against the likes of OpenStack and Cloud Foundry, two projects that also aim to bring the operating concepts of public clouds and cloud-based platform-as-a-service offerings into the enterprise data center. Both of those projects have the advantage of a long head start and being open source.

Microsoft, on the other hand, already has the relationships with many of the companies that may want to use its service, as well as the hardware OEMs that will produce the certified hardware for the project. The company also believes that having a single platform for running apps in the Azure public cloud and on premises will be attractive to many businesses, as it will give their developers a unified development platform.

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Twitter unveils a new API platform, roadmap and vision for its developer community

Twitter historically has had a rocky relationship with its developer community.

It once encouraged third-party apps, then later restricting them; hosting developer conferences, then killing them; debuting a suite of developer tools, then selling them; and despite issuing a mea culpa, the company failed to regain the trust of many.

Today, Twitter is trying to reset developer relations yet again with the unveiling of its vision for the Twitter API platform and, for the first time, publishing its public roadmap of what it has planned.

The apparent goal here is to be more transparent about what Twitter has in store for developers, which includes a unification of its API platform along with the launching of new APIs and endpoints for developers.

Streamlining the API platform

To begin, Twitter is finally taking fully advantage of its investment in Gnip.

Gnip, a longtime Twitter partner and social data provider, was acquired by Twitter back in 2014. The goal was to build out Twitter’s in-house big data analytics team and establish direct data relationships with the big businesses who build on top of Twitter’s data and platform.

The acquisition, however, divided the developer base into different classes. Most developers continue to utilize the standard REST and real-time streaming APIs that have been around since 2006. Meanwhile, larger software companies could take advantage of Gnip’s enterprise-grade APIs to do more with Twitter data.

Gnip’s APIs let developers tap into the “Firehose” (the unfiltered, full stream of tweets and all their metadata), and offer more functionality than the REST and streaming APIs. But they’re also priced for an enterprise audience. That kept developers who were only beginning to scale from being able to afford access.

Twitter says it heard developers complaints about this, and will address the problem later this year by combining its REST and streaming APIs with Gnip. The goal is to create an integrated Twitter API platform that all developers – from indie app makers to large enterprise – can use.

The APIs will be streamlined, so developers won’t have to deal with different access points and delivery protocols as they scale, explains Twitter.

“This means one API for filtering data from the Firehose; one API for searching the Twitter archive; one API for getting realtime activities related to an account — including Tweets, Direct Messages, Likes & Follows,” writes Andy Piper, Staff Developer Advocate, in a blog post.

Tiered access and new APIs for data and DMs

In addition to this simplification, Twitter will later this year introduce new tiers of access, including free access for testing new ideas, self-serve, paid access for increased functionality as the developer begins scaling, and finally enterprise access for Twitter’s strategic partners.

Twitter says it will be clear about the features and costs available at each level, as well, but did not announce pricing. (It will later this year, we’re told).

Twitter will also introduce new APIs aimed at developers building business solutions – specifically those that could cater to areas of Twitter’s own business it wants to further invest in: customer service, bots, and brand engagements.

This includes the launch of APIs for developers building solutions on top of Twitter’s data – like those that help businesses understand which products to build and how to market them, as well as better understand their customers and what they think.

Along with this, Twitter is today adding a new Account Activity API and new endpoints, detailed here.

These are focused on opening up Twitter’s Direct Messages to allow developers to build things like customer service apps, chatbots or other tools for businesses that want to chat with customers. They include support for newer Twitter features like welcome messages in Direct Messages and automated Quick Replies.

Twitter is also showing off a couple of features still in private beta in the hopes of developer feedback – custom profiles that businesses can use to override their default avatar so customers can see a photo of the human agent or bot they’re chatting with on DM, and “Customer Feedback Cards” for businesses to collect feedback on the customer service experience they offered.

Twitter additionally detailed its plans for a new Search API that offers free access to a 7-day “lookback window” offering more sophisticated query capabilities and higher fidelity data retrieval that what’s available today.

New roadmap and rules

Finally, Twitter updated its automation rules to guide chatbot developers; announced plans to replace User Streams and Site Streams with the new Account Activity API; and announced a plan to replace several endpoints (public statuses/filter, statuses/sample, and search/tweets) with a streamlined API that provides increased access when rate limits are reached.

Most importantly, perhaps, Twitter for the first time has published its API platform roadmap through early 2018. This details what is in the works, when things are planned, and what’s in store for the future.

The investment Twitter is making here – streamlining and unifying its API platform to allow developers to scale – is significant. But the company’s troubled past with developers could still haunt it, despite these changes.

Twitter has before shafted its own partners and pulled out the rug from under developers’ feet, to reflect the company’s own, ever-changing interests as it tries to figure out where it can extract revenue from its platform. Offering its roadmap and increased transparency may help to soothe some concerns, but with Twitter’s own future continually uncertain, it’s not clear how many developers will take up the charge.

Featured Image: Bryce Durbin/TechCrunch

InsideSales expands chummy Microsoft relationship with new Dynamics platform integration

Microsoft has had a fair bit of investment action with InsideSales, the startup with a unicorn valuation of $1.5 billion, and today they are expanding that relationship with some product integration.

The companies announced that InsideSales Playbooks will be available on the Microsoft Dynamics CRM platform.

Playbooks offer customers a set of recommendations aimed at sales teams, such as the best person to call and the most likely accounts that will end up in a sale. This is all driven by artificial intelligence underpinnings, which InsideSales CEO Dave Elkington says requires a fair bit of data.

While InsideSales is reaching sufficient size to have a fairly substantial set of data on its own, he said, having access to Microsoft’s considerable data set, including LinkedIn, gives even more data fuel to drive the information in Playbooks.

“All of the data we get through partnerships with platform partners like Salesforce and Microsoft…goes into the data lake and allow us to train the algorithms across every platform and customer,” Elkington explained.

And of course, being partners with Microsoft means having access to its sales team, a highly valuable proposition in itself for a startup like InsideSales. “Microsoft is in a lot of new enterprise deals. Microsoft Dynamics has more traction than most people expect or anticipate in enterprise CRM. They also seem to have a strong footprint internationally, especially in [Europe and the Middle East] and we have strong footprint there,” Elkington explained.

According to market share figures from Gartner, Microsoft is still far back in the CRM market pack with just 4.3 percent market share, well behind market leader Salesforce, which had 19.7 percent for 2015, the most recent year’s figures available.

InsideSales has more than a product-level relationship with Microsoft, with Redmond being part of a $50 million investment round in January, and also participating in a $60 million round in 2015. That round was led by none other than Salesforce Ventures, the investment arm of Microsoft’s primary CRM frenemy Salesforce.

This funding tit-for-tat takes place against a broader backdrop in which Microsoft is trying to at once interoperate with Salesforce, while grabbing business wherever it makes sense. It certainly raised some eyebrows when it announced a big deal with HP last year, grabbing a chunk of business from Salesforce.

None of that matters to InsideSales of course, which is happy to remain somewhat neutral and work with both companies to whatever extent it can. There is no upside for a startup to take sides in this. It makes much more sense to try to work as a partner with as many companies as possible, and take advantage of the traction (and the data) they bring with their customer bases.

“Ultimately, we are a better company for our customers independent, at least for the time being. Our ability to be neutral and cross platform allows us to access more data and provide more value,” Elkington explained.

That makes sense, but it’s hard not to notice they seem to be more involved with Microsoft than ever before, whatever you choose to read into that.

Featured Image: Vincent Besnault/Getty Images

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Talla service bot lets IT ease into AI

Talla, a Cambridge, Mass. startup, wants to help companies ease into artificial intelligence, and they have come up with a new service assistant bot that gives companies whatever degree of intelligence-fueled power they are looking for.

The tool, called ServiceAssistant, works as an IT or HR help desk inside of Slack or Microsoft Teams and gives customers a few options on how to use it. First of all, you can run it like a traditional service desk. The user sends requests through ServiceAssistant where it gets processed and answered by a human.

In the second scenario, the customer eases into automation where the ServiceAssistant provides an automated answer, which gets checked by a human before being sent through to the questioner, or at the highest level of automation the system simply sends an answer when the confidence threshold is above a certain level set by the customer.

CEO and co-founder Rob May says the company deliberately used an in-house service model instead of live customers because after reviewing the technology, he felt that the current Natural Language Processing (NLP) technology was better suited to this approach.

The Talla ServiceAssistant looks like any user on Slack or Microsoft Teams. As with any Slack or Teams bot, employees can interact with it by asking questions. If it’s tuned to be an HR assistant, for example, an employee might ask, “Do we have Labor Day off?” If the system has been configured to answer automatically, it’s the kind of question that it can answer with a high degree of certainty and can simply tell the employee yes or no.

In an IT Help Desk approach, the questions could get trickier such as, “How I get access to QuickBooks?” In this case, the system might find multiple matches, and if it were set for automated responses, it could ask the questioner to choose the most relevant one, or it could ask if they want to open a help desk ticket to move to the question to a human for processing.

Photo: Talla

The system is tuned to ask questions when it doesn’t understand and to learn from the responses. Since people ask questions in non-standard ways, the system can also learn that “Are we open Labor Day?” is the same as “Do we have Labor Day off?” or “Is the office closed on Labor Day?”

May says even in companies where there are high usage rates for Slack or Teams, there could be as many as 20 percent of employees not using that tool, so they’ve also built a Web App and allow email, but the ultimate goal is to get people into the conversational tools to ask the questions — and do it in an automated way as possible.

The company wants to be more than a conversational bot, however. It wants to be a central place for processing IT and HR requests. That means having a ticket system, a knowledge base and the ability to broadcast to employees, for example, when the system is going down for maintenance or the office is closed for a holiday.

Photo: Talla

May says among his customers Slack is definitely the more popular of the two offerings today, but he believes it’s important to look at the different conversational tools and continually assess where that market is going as it’s still being established.

“What does that [conversational market] fragmentation look like int two years is one of our biggest strategic worries,” May says.

The company is very much a startup with 16 employees. It’s raised $4.5 million. May was previously co-founder at Backupify, a cloud startup that was sold to Datto in 2014.

Featured Image: pagadesign/Getty Images

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Snowflake rakes in $100 million to grow its Data Warehouse as a Service

Snowflake Computing, the company that built a Data Warehouse as a Service cloud solution, announced a $100 million Series D investment led by Iconiq Capital with help from Madrona Venture Group.

Early investors Altimeter Capital, Redpoint Ventures, Sutter Hill Ventures and Wing Ventures also participated. Snowflake last raised $45 million in June, 2015. Today’s investment brings the total raised to $205 million, according to the company.

The company is led by Bob Muglia, who went from managing thousands of people at Juniper and Microsoft to being employee #34 at a startup. He made the move because he believed in what Snowflake was doing — building a SQL data warehouse service from the ground up for the cloud.

Matt Jacobson, general partner at lead investor Iconiq, says they saw a company that has positioned itself for the data requirements of modern customers. “Everything that makes a company great now centers on data, the speed to assemble and organize data, and the ability to extract value and insight from that data,” Jacobsen said in a statement.

What they’re offering is a classic cloud play, a database that can do the job Oracle traditionally handled in-house without any of the management headaches associated with running a data warehouse. You get the ability to scale to whatever size you require, while only paying for usage.

Interestingly enough, even though this is a SaaS product, the company decided to forego subscription pricing. Instead it’s going with a usage-based pricing model where you pay based on the amount of data processed. This presented some challenges for Muglia as an executive as there weren’t a lot of companies taking this approach. He points to Twilio and Stripe as companies they could look to, but says overall, “We are helping define how this type of business is put together and run.”

When he came on board, Muglia had been an executive at Juniper for a couple of years after running a huge division at Microsoft previously. He admits that moving to a startup with less than 35 people was a huge transition for him at first.

“The company was just two years old when I started in 2014. The product was still in Alpha. We had done zero deals. The fundamentals of the product were there, but there was still a lot of work to do,” Muglia said. He found himself using hands-on management skills he hadn’t had to use in years. Now, as the company grows, he’s taking on the more typical higher level management role.

The company, which launched in 2012, currently has 450 customers and Muglia says it’s growing fast. Today’s investment will help continue that trajectory and move into more worldwide markets, and expand its engineering efforts. It recently opened a new engineering office right in Microsoft’s backyard in Bellevue, Washington.

Snowflake currently has 175 employees. Muglia could see that going up to 250 by early next year. He didn’t want to discuss valuation at this point, but he said the new money puts the company in a strong financial situation with plenty of cash to grow moving forward.

Featured Image: Ken Reid/Getty Images

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83North closes $250M fourth fund focused on European, Israeli startups

European VC firm 83North (formerly Greylock IL), which since 2008 has focused on backing startups in Europe and Israel, has closed its fourth fund — taking $250M in a raise that it says was both oversubscribed and its largest to date, and bringing its total capital under management to $800M.

The fund says it will continue to invest in startups in its target regions at all stages — and in both the consumer and enterprise segments, including in fintech, SaaS, IT, adtech and marketplaces — albeit with an emphasis on early stage businesses.

However Laurel Bowden, partner in London, notes that the UK’s vote to leave the European Union is encouraging the firm to keep casting its eye across Europe as a whole, rather than concentrating attention on London.

In a statement she noted that the fund has already backed companies from France, Germany, Greece, Italy, Spain and Sweden, for example, and said it’s expecting European activity to accelerate in tech hubs outside London because of Brexit.

“As we look to the future, the UK’s exit from the EU will accelerate activity in European tech hubs outside the UK. We believe this presents a big opportunity for venture funds, like 83North, that are already well-established in the wider European region,” she said.

“It’s very encouraging for the European market to see such huge ambition to build global, category-leading companies. There have been fifteen exits valued at more than $1 billion that originated from Europe in the past five years compared to only a handful prior,” she added.

83North has invested in more than 40 startups to date. Portfolio companies include Just Eat, Telit, Hybris (acquired by SAP), ScaleIO (acquired by EMC), SocialPoint (acquired by Take-Two), Supersonic (merged with IronSource), Celonis, Mirakl, Via, Wandera, Workable, Wonga, Zerto, NotOnTheHighStreet, Ebury, iZettle, Marqeta and Payoneer.

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