Cloud Sherpas raises $1.6M to sell Google apps to companies

Cloud Sherpas, a designated reseller of Google’s online application suite for enterprise customers, announced today it has raised $1.6 million in its first round of funding.

The funding is pegged to help the company sell its Google Application implementation to new markets. Cloud Sherpas will also use the funds to develop its own cloud offering, SherpaTools, which serves as a companion application that helps manage Google’s cloud software.

“This is mainly working capital, but we are going to be investing more in our primary product, which is SherpaTools and (other intellectual property,)” said Cloud Sherpas CEO Jon Hallett. “The last round was more about paying down debt and cleaning up the tab.”

There are three ways Cloud Sherpas makes money. The company serves as a primary reseller of Google’s applications suite — including Mail, Docs and the like — to enterprise companies and gets a slice of that. Cloud Sherpas also offers IT support for enterprise customers, which includes migrating data from existing sources to the cloud. Finally, it sells and supports its proprietary SherpaTools software. SherpaTools has been installed at around 8,000 companies, said Cloud Sherpas CEO John Hallett.

The funding was led by Syncarpha Capital, Vento Security Holdings and Hallett Capital. Hallett said Cloud Sherpas was able to close the round in a little more than three weeks thanks to its growth rate, and has never had a client not renew its Google apps license through Cloud Sherpas.

Cloud Sherpas earlier raised $1 million in a seed round led by Hallett Capital, Hallett’s own investment portfolio. The Atlanta, Ga.-based company has 40 employees but expects to have 50 people on staff by the end of the month — and more than 100 by the end of 2011. It’s been cash flow positive for some time and grown from 80,000 users six months ago to 600,000 users today, Hallett said.

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In The Fight Against IT Waste, 1E Releases NightWatchman 6.0

Computer power management software company, 1E has released a new version of its marquee product, NightWatchman.

Like its predecessors, version 6.0, helps corporations manage their network of computers to optimize energy efficiency. It gives IT managers the ability to remotely power down computers and establish energy-saving settings (ie. automatic shutdown of desktops during the weekend).

In the latest version, 1E has added three key features: a new web-based dashboard (to help managers oversee the entire company’s computer power usage), improved diagnostic tools to determine why a computer hasn’t properly powered down, and tariff calculations based on location.

Given how the price of energy can fluctuate significantly on a region by region basis, the new location-based calculations will help companies more accurately assess how much they’re saving on energy usage. Energy efficiency as it relates to IT management is becoming an increasingly important field, and according to Gartner Research, in two years more than half of mid and large-sized businesses will centrally manage their desktops’ energy consumption.

Although the average NightWatchman PC only saves $36 a year in energy costs, those incremental savings yield significant sums in aggregate. Several of 1E’s clients are large corporations with massive IT operations, such as AT&T, Ford and Dell. According to 1E, NightWatchman has 4.6 million licensed users around the world, a group that has collectively saved $530 million in energy costs.

Our Government Can’t Prevent A Digital 9-11: Entrepreneurs Need To Step In

At the Security Innovation Network (SINET) Showcase at The National Press Club in Washington, D.C., this week, Michael Chertoff, former Secretary of the Department of Homeland Security, presented a dire assessment of the cyber-security threat facing our nation. He discussed how rogue governments and hackers are quietly infiltrating our computer systems and the disasters that can be perpetuated—like those you see on the TV show “24”.  Chertoff worries that these risks haven’t yet gripped the public imagination; that it may take a “digital 9-11” to get businesses, consumers, and governments to fortify their defenses.

The most troublesome thing I learned by talking with a who’s who of our nation’s security community was that our government doesn’t believe it has the ability to defend us from the rapidly evolving threats. Yes, the National Security Agency and some branches of government have brilliant computer scientists working for them and can defend their own systems; but the rest of us are our own. The Government simply can’t innovate fast enough to keep pace with the pervasive threats and dynamics of the internet or Silicon Valley’s rapidly changing technologies. Indeed, as George Hoyem, a partner at the CIA-backed venture fund In-Q-Tel, noted, there has been a 571 percent growth in malware since 2006; today, 60 percent of all websites are infected.

The experts agreed that we need private industry to step in and help solve the world’s cyber-security problems.  But we can’t count on the big companies—they can’t innovate as fast as startups can.  So our entrepreneurs need to lead the charge. And many are doing just that.  Robert Ackerman, managing director at Allegiance Capital, said that in 1981 more than 70 percent of research and development in security technology was done by companies with 25,000 employees or more, and less than 5 percent was done by companies with fewer than 1000 employees. Today, the large companies perform 38% of the R&D, and companies with fewer than 1000 employees do about 25%.

But here’s the big obstacle: when it comes to Government—which is one of the biggest markets for security technologies, the deck is stacked against the entrepreneur. Nearly all big government contracts go to large contractors. These contracts run not in the millions of dollars, but in billions.  And we don’t get billions of dollars of value—if we’re lucky, we get some clunky old systems that entrepreneurs could have delivered much better versions of in a fraction of the time and a tiny fraction of the cost. Because these contracts are so big, they require many levels of approval—usually by Congress. It typically takes 3-4 years for government to award these.  Companies have to go through a grueling “certification” process to get approved to bid, and it costs millions of dollars to prepare proposals and to lobby government officials and political leaders. Startups can’t wait this long or afford the cost of bidding.

The chasm between government and entrepreneur couldn’t be wider. All of the government officials I talked to were open to change and seemed eager to embrace new technologies; yet they had no idea where to start or how to get around their own bureaucracy.

Silicon Valley and Washington, D.C., are located three thousand miles apart in space and light years apart in concept. Technology managers in government don’t know where to find the entrepreneurs who are ready and able to build innovative solutions.  And when they do come across them, they don’t have mechanisms to fund, support, or purchase technology from startups. So government managers are forced to deal only with the big contractors—who have a greater incentive to add staff (and so increase billing) than to cut costs through innovation. Not only are we wasting billions of dollars, but our nation’s defense industrial base is neglecting the vast majority of innovation from early stage and emerging growth companies.

What should the government do to remove the obstacles? There were some great ideas discussed, by people like Curtis Carlson, CEO of SRI International; Dean DeBiase, of Reboot Partners; Asheem Chandna of Greylock Partners; and SINET’s founder Robert Rodriguez:

1.      Overhaul the acquisition and procurement process to level the playing field for small companies: it must be made easier for startups to bid for government contracts and the selection criteria balanced to weigh equally the risk of technology obsolescence with the risk of a startup’s failing. Procurement times should be reduced to months rather than years; some projects should be done in smaller steps so that the big guys aren’t the only ones qualified to complete them.

2.      Increase awareness between technology buyers, builders, investors, and researchers. The SINET event was billed as the first of its kind. In Silicon Valley, such networking events—between entrepreneurs, investors, buyers, and academics—take place at least every week. Why not bring government technologists to Silicon Valley and other tech centers on a frequent basis? They will understand what is happening in the tech world, and entrepreneurs will get the chance to learn what problems need to be solved and to meet the people they can sell their solutions to.

3.      Provide tax incentives for security innovations—R&D tax breaks, similar to the high-efficiency-energy tax breaks for consumers.

4.      Provide seed funding for startups. One of the reasons for which Silicon Valley has so many Web 2.0-type startups, is that successful entrepreneurs, who have made their fortunes, are playing the role of Angel and VC. They provide funding and mentorship. Why not provide government technology managers with the ability to fund and mentor the startups that they believe can solve critical problems?

One more great idea (not from SINET, but reported by Rob Pegoraro, of The Washington Post) is from Internet pioneer Vint Cerf. Vint advocates the creation of a “cyber fire department”—a recognized, trusted, public entity that companies can call upon when they need help. This would function as Sandia National Laboratories did in battling the Conficker worm.

Bottom line: until changes begin to occur on a national scale, U.S. cyber-security will remain a global backwater in the continually innovating domain that is cyberspace.

Editor’s note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. You can follow him on Twitter at @vwadhwa and find his research at

Apple looks to Unisys for help with enterprise, government sales

Apple StoreApple is seeking to further increase its reach to businesses and U.S. government agencies with the help of enterprise technology and service company Unisys, Bloomberg reports.

Apple has signed a deal to have Unisys provide maintenance and other services for its products to businesses and government agencies — a bold new move for a company unused to relying on others for support.

Apple has traditionally focused on consumer sales. It makes sense for the company to make a greater effort to reach other markets, especially after it announced last week that businesses are already adopting its products widely. The iPhone is being deployed or tested by 80 percent of Fortune 500 companies, and 65 percent of Fortune 100 companies are using the iPad in some fashion, Apple said.

Unisys is undoubtedly more familiar dealing with businesses and government clients, so it makes a good partner for Apple’s further conquests. Unisys is already developing mobile apps for government agencies — including one used by the Department of Homeland Security that lets managers check up on border-crossing technology like cameras. The company expects to make even more apps for the government as part of its deal with Apple.

Unisys landed the arrangement in part by figuring out how to secure information sent by the iPhone. “There are all sorts of layers you have to put into it to make sure nobody can tap into it,” Unisys managing partner Gene Zapfel told Bloomberg. “We’ve put a lot of heavyweight engineering into securing the device, which, frankly, no one else has figured out yet.”

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Free GigaOM Pro Webinar: The Scalable Cloud

As more and more large enterprises consider cloud-based infrastructure, a key question for them is if the cloud can scale to support core operations and services. Cloud platforms must be as resilient and scalable as their more traditional predecessors if they’re going to win over IT decision-makers.

If you’d like to better understand the current cloud market, see what key services IT managers are transitioning to cloud-based platforms or hybrid architectures, and hear examples of both successful and failed transitions to cloud, please join GigaOM Pro and Limelight Networks for a free one-hour roundtable webinar on Nov. 4, 2010 at 10 a.m. PDT with our four cloud experts:

  • Derrick Harris - GigaOM Pro cloud curator – Moderator
  • Paul Miller – GigaOM Pro analyst, Founder, Cloud of Data
  • Brett Sheppard – GigaOM Pro analyst, Principal with Ably Inc. Consulting
  • Jason Thibeault - Limelight Networks Sr. Director, Tech Alliances & Cloud Strategy

Some of the subjects we’ll discuss:

  • Potential points of failure in delivering scalable cloud-based service offerings worldwide
  • Key steps for building robust, widely distributed product and service offerings atop cloud infrastructure platforms
  • Case studies that illustrate real-world success and failure stories for cloud-based delivery
  • Examples of companies utilizing cloud solutions for data and content storage
  • Information on the financial impact and ROI of transitioning to cloud infrastructure for business and consumer service offerings

The webinar will take place on Thursday, Nov. 4 and at 10 a.m. PDT. If you’re interested in attending this free webinar provided by GigaOM Pro and our sponsor Limelight Networks, register today.

Image source: flickr user WTL

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Social IT Management Software Spiceworks Hits 1.2 Million Users

Spiceworks, a startup that develops Web-connected social IT management software, is announcing a few milestones today at the company's conference Spiceworld. The company now has 1.2 million IT professionals using its platform, who support 37.5 million workers and manage 66 million computers and devices. Spiceworks, which recently raised $16 million in funding, develops a desktop software suite that helps a company’s IT staff collaborate with each other and manage “everything IT.” The IT management software, which is free and ad-supported, is mainly used at small to medium businesses to inventory, monitor, troubleshoot, report on and run a help desk for their IT networks.

Kontiki Raises $10.7 Million To “Ruin ‘Undercover Boss’”

Enterprise video communications company, Kontiki, has raised $10.7 million in series B funding led by the company’s earlier backers, MK Capital, and joined by New World Ventures and Cross Creek Capital. Kontiki aims to give big corporations their own private Youtube, or a way to use video to connect and teach employees, decrease travel expenses and increase productivity.

Kontiki’s chief executive Eric Armstrong says his product could ruin the reality TV series “Undercover Boss.” That’s the show where CEOs from massive, public companies go work in the ranks for a week, and surprise their employees with an identity-reveal at the end, bestowing gifts upon their favorites, and changing corporate policies to make everyone work better together. Why ruin a good thing? It’s not intentional. But one of the most popular uses of Kontiki’s video delivery software-as-a-service is to broadcast quarterly CEO meetings live, and then offer them again on-demand, so all employees can put a face to the name of their leader.

Gartner researchers predict that video will grow to represent two-thirds of traffic over enterprise networks by 2015. Another enterprise video use-case that’s popular among Kontiki’s customers, Armstrong said, is the delivery of training and compliance materials by video-on-demand.

The Sunnyvale, Calif. company says it has been gaining ground in the enterprise market because its technology doesn’t require companies to upgrade their networks to accommodate online video traffic, and it doesn’t require equipment expenditure, or IT maintenance.

Kontiki’s software as a service costs about $1-$3 per user, per month. Kontiki’s customers span a wide variety of industries, including Starwood Hotels, Wells Fargo Bank, Charles Schwab, United Technologies, Coca-Cola and most recently Nationwide UK.

Armstrong says Kontiki will spend its new-found capital on hiring engineers, marketing and sales talent. The company has 34 employees today but expects to become a 50-person operation within a year. It plans to deliver a product release that works on iOS and Android mobile devices within the year.