LP Meeting 2012Venture Investing and the Cloud Glenn Solomon - 2012

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Purpose of Today’s Presentation

Over the next half hour you will….

➜ Learn more about why VCs continue to like the cloud➜ Get a sense for the models VCs like➜ Gain some practical experience on how to approach VCs

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Agenda

Cloud Computing: Why VCs Still Love the CloudWhat’s Disrupting The Cloud

➜Mobile’s Effect on the Cloud➜Very Big Data➜SMB: The Final Frontier

Getting Funded: Dos and Don’ts

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The Cloud Continues to Grow

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Cloud Companies: Numerous and Specific

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Strong Consolidation in Cloud

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Cloud Companies Beat Market Expectations

*Morgan Stanley

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Still Lots To Do

Driving user adoption/productivityReporting & analytics

Improving application governanceReducing SaaS siloes

Improving data qualityPerformance monitoring/management

Providing mobile accessDeeper integration with other cloud appsDeeper integration with on-premise apps

Improving manageabilityEnsuring security & compliance

25%19%20%19%

23%19%19%

19%18%

16%11%

35%39%39%42%

34%43%42%

50%48%

45%35%

31%33%34%31%

39%32%33%

26%29%

36%48%

Priorities for Improving Cloud Apps% of Respondents

Unimportant Of Little Importance Somewhat Important Important Very Important

*Appirio

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Agenda

Cloud Computing: Why VCs Still Love the CloudWhat’s Disrupting The Cloud

➜ Mobile’s Effect on the Cloud➜ Very Big Data➜SMB: The Final Frontier

Getting Funded: Dos and Don’ts

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A Mobile-First, PC-Second WorldQ1 2011

Q1 2011 Q1 2012

+12% +7%

Nearly half of all American adults own smartphones

Almost a third of American adults own tablets

Q1 2012

*Morgan Stanley, Pell Research

39% 46%17%29%

Mobile’s Weakness: Storage

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Mobile Data per Year

Facebook Photos per Year

761 MB

*Facebook, Pixable

Average iTunes Music Library 16 GB

9 GB

Mobile users rely on the cloud to access and store data

Average Internal Storage

15.6 GB

*TuneUp

*T-Mobile

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Popular Mobile Apps that Rely on the Public Cloud

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Opportunities in Mobile and the Cloud

Mobile Security

Sharing Data Across Mobile Platforms

Crossing the Content Creation Gap

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Agenda

Cloud Computing: Why VCs Still Love the CloudWhat’s Disrupting The Cloud

➜ Mobile’s Effect on the Cloud➜ Very Big Data➜SMB: The Final Frontier

Getting Funded: Dos and Don’ts

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Facebook: A Lesson in Big Data

• 300M new photos• 2.5B new items shared• 2.7B “Likes”• 70,000 queries (Friend Suggestions)

Every day Facebook processes…

More than 500TB of data

*Facebook

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Big Data Needs for the Cloud

Storage • Need inexpensive, dense storage• High performance

Computation• Efficient analysis over large data sets (Friend Suggestions)• Big Data Databases (NoSQL / NewSQL)

Infrastructure• Performance at Scale• Security

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Exciting Disruptors in Cloud / Big Data Infrastructure

Storage Computation Infrastructure

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Opportunities in Big Data and the Cloud

Easy, Real-Time Analytics

High Performance Multitenancy

Cloud Security and Compliance

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Agenda

Cloud Computing: Why VCs Still Love the CloudWhat’s Disrupting The Cloud

➜ Mobile’s Effect on the Cloud➜ Very Big Data➜ SMB: The Final Frontier

Getting Funded: Dos and Don’ts

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SMBs Flocking to the Cloud

• SMBs adding services. 39% of SMBs projected to pay for 1+

cloud services in three years; current 29%. SMBs with cloud

services will be using 3.3 services in three years; current 2 services.

• Hybrid model. Within three years, 43% of workload will be on paid

cloud services, 28% on-premise, 29% free / bundled.

• SaaS and IaaS adoption. SMBs adopting SaaS and IaaS services

are larger, more growth-oriented companies

*Microsoft SMB Cloud Adoption Study 2011 / William Blair

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Tech Sales 1.0

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What SMBs Love: Tech Sales 2.0

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Who’s Doing It Right

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Succeeding in SMB Cloud

Leverage Social Media

Disrupt Traditional Markets

Create Scalable Processes

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Agenda

Cloud Computing: Why VCs Still Love the CloudWhat’s Disrupting The Cloud

➜ Mobile’s Effect on the Cloud➜ Very Big Data➜ SMB: The Final Frontier

Getting Funded: Dos and Don’ts

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Study the landscape and differentiate

Focus on big market with relevant team

What is your flywheel? Scalability?

Know your financial model

VC partner – chemistry over terms

Use buzzwords

Try to do everything – focus is key

Maximize valuation over chemistry

Hide your vulnerabilities

DO

DON’T

Approaching a VC with your Cloud Company

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Questions?