Tech startup: Standing Cloud Inc.
INITIAL LIGHT BULB: In late 2008, serial entrepreneur Dave Jilk was discussing cloud computing - where computing does not occur on the desktop but on virtual servers in the Web-based, location-independent "cloud" - with venture capitalist Brad Feld of the Foundry Group in Boulder. They struck upon a future vision of a virtual application development environment that would allow techies to actually develop apps in the cloud. Looking into making the platform-as-a-service concept a business, "We learned developers are very hesitant to change their ways," Jilk says.
So Jilk scaled back the approach to deploy cloud-based versions of open-source applications already popular within the development community "rather than inventing our own," he says, and co-founded Standing Cloud in early 2009.
Now 15 employees strong, Standing Cloud shifted gears from R&D into marketing last year with hopes of capitalizing on the predicted paradigm and market shift from the desktop to the cloud.
IN A NUTSHELL: "We deploy managed application platforms using cloud servers," Jilk says. "We can completely automate the deployment process. With cloud servers, we don't have to ever touch the machines. If we encounter a problem we just throw them away. Of course, virtual servers are just bits - there's nothing going into landfills."
Because of their incorporeal nature, cloud - or virtual - servers are inexpensive and infinitely more flexible than traditional real-world servers on racks in a back room. "When we deploy an application, it's portable between different cloud servers," Jilk says. The payoff? No downtime whatsoever. "If we detect your app is not running, we will bring you back up on a different server immediately," Jilk says.
Besides zero downtime, the benefits to cloud-based apps are many, Jilk adds. "Once an app is running, I only have to use the app. I don't have to get into Standing Cloud on the back end. If I have any problem, I can use Standing Cloud to restore it."
Standing Cloud's Application Network spans 80 applications (including popular content-management systems like WordPress, Drupal and MediaWiki) and has entry-level packages starting around $20 per month; fees for high-volume customers are based on data usage.
"We don't charge for the app's code, just for the management and hosting," Jilk says, noting that coming commercial applications would likely have additional surcharges.
"The ‘cloud hopping' model they're using looks like it will keep down capital expenses," says Michael Coté, an analyst with Seattle-based RedMonk, labeling Standing Cloud as "value-added resellers of cloud services rather than people who own all the equipment needed to run a cloud on their own."
THE MARKET: Jilk says Standing Cloud's core market is "solution providers," a broad category that includes Web developers, consultants, and a wide range of other techies. "They understand the benefits of cloud computing very well."
"Cloud fever is definitely in full effect now with companies looking toward public cloud applications as a way to lower costs and gain the flexibility that comes from not having to manage their own, on-premise IT," says RedMonk's Coté. "At the moment, most companies should be evaluating what external facing applications they could host on clouds and if it'd be cheaper given their needs."
FINANCING: The Foundry Group led Series A and A1 rounds totaling $2 million and participated in a $3 million Series B round with Avalon Ventures of San Diego and Boston that closed in November 2010.