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Thought Leaders in Cloud Computing: Jesse Lipson, Founder and CEO, ShareFile by Citrix (Part 2)

Posted on Friday, Jun 8th 2012

Sramana Mitra: Between 2005 and 2011, at the time of the acquisition by Citrix, how did the revenue run?

Jesse Lipson: We were definitely experiencing triple-digit growth every year. We were in the Inc. 500 the last two years. We actually ranked above some of the heavily venture-funded companies like and YouSendIt. We were growing faster, and in 2010, which was our first year of eligibility, we were #104 in the Inc. 500. Then I think were #241, maybe, in 2011. We went from one person to four people to 15 people to 30 people and [kept growing].

SM: Are you located in the Bay Area?

JL: We’re based in the research triangle area of North Carolina. We’re in Raleigh.

SM: Great. At the time of the acquisition by Citrix, what revenue run rate were you at?

JL: We haven’t disclosed our revenues from 2011 yet.

SM: Let’s talk about your space. Can you discuss the space as you see it today?

JL: Sure. It’s become a very hot space. It’s a big, complicated space because it covers everything from consumer backup solutions all the way to enterprise-class ad hoc large file transfer and everything in between. There are many players in the space. Some of them we compete with directly, others we compete with only marginally. I would say the space started to heat up around 2008 or 2009. One of the big drivers over the past couple of years has been mobility. Initially, the market for transferring files that were either too large or too confidential to send through email was a large market and kind of an FTP replacement. Typically, FTP is only used departmentally within companies. It’s not the kind of thing where a 10,000- or 20,000-employee company will need a license for each employee. It might just be a few departments. I think that started to change with the launch of the iPhone and then especially with the launch of the iPad a couple years ago.

There’s a new use case where people not only wanted to share files with clients, vendors and partners, they also wanted to share files across all of their devices, laptops, desktops, iPads, iPhones, Android phones and tablets. The other big driver for our business over the past couple years has been the success of a lot of consumer solutions. For example, Dropbox has created a new problem in the enterprise where employees are bringing these consumer tools into the workplace, which is great for productivity, but it creates problems in terms of security, compliance, data sovereignty and things like that. It creates what we call the Dropbox problem. It’s a problem where now IT departments are scrambling to find solutions they can authorize and sanction that meet all of the other requirements that they have to deal with, like intellectual property, data security and compliance. In many of those cases, now that we’re part of Citrix, which is a trusted multi-billion dollar public company, we are looked at as a solution to provide the productivity of these other file sharing tools but also give the security and integration with other enterprise tools.

SM: Would you help me figure out what a reasonable ecosystem map of this space looks like from your perspective?

JL: There are several startups that have fairly mature products that launched around the time we did. There are also a lot of mature, trusted brands that are entering the space. A lot of the larger brands caught on to this trend a little later. In the past year, we have gotten iCloud by Apple and G Drive by Google. On the enterprise side, EMC recently purchased a company called Syncplicity. VMware is planning an offering later in 2012. Some of these large enterprises are just now launching version 1, immature versions of products, but some of those brands have the trust of enterprises. A lot of startups that don’t necessarily have the credibility and trust have more mature products.

The way I look at is, I look at three different segments of the market. One is consumer, the second is small and medium businesses and the third is enterprises. Within those three markets, I think there are solutions that are more focused on backup and storage, and then there are solutions that are more focused on file sharing and transfer, more one-time transfer of files that are large or confidential. If you take those three segments and break them up between backup, storage and ad hoc file transfer, it gives you six quadrants in which different firms can specialize.

This segment is part 2 in the series : Thought Leaders in Cloud Computing: Jesse Lipson, Founder and CEO, ShareFile by Citrix
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