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Bootstrapping Using Services to $15 Million in Venture Capital: Gravitant CEO Mohammed Farooq (Part 6)

Posted on Saturday, Jul 5th 2014

Sramana: The bottom line is that you still have a lot of marketing to do to educate enterprises about the transformations you enable.

Mohammed Farooq: Yes, we do. Last year, we had a lot of work to do in this space, and this year, we are finally getting closer. People are starting to understand how they need to operate in the new world of cloud. We have been educating heavily for the past two years. This year, we are going to be operating in an education and operational mode. We are starting to see mainstream adoption.

Sramana: How much analyst coverage have you been able to get around this?

Mohammed Farooq: We have been recognized by Gartner. You will see us as the leading vendor in the cloud service broker space.

Sramana: Who do you compete with?

Mohammed Farooq: We compete with new companies as well as a few older companies. Cloud brokerage is a very big space. New companies include ComputeNext and RightScale. Jamcracker is in our space, but they are really a re-branded company. There are incumbents who want to own that space. That would be VMWare, RedHat, Cisco, IBM, and HP. They are systems management guys who want to be cloud management players.

Sramana: Do you anticipate that the incumbent companies are going to start making acquisitions to be major players in this space?

Mohammed Farooq: Exactly. In the next two years, I predict that we will see a repeat of the cloud management wave. When that happened, all the cloud management companies got acquired. We have already had an offer from a major company here in Austin and our board did not take it. They felt that building the broker business will be bigger.

Now, we are positioned with IBM, HP, Oracle, VMWare, RedHat, Cisco, and a few others who are going to want to buy a broker in the next two years. The system integrators will also buy hardware broker technologies, case in point being CSC buying ServiceMesh. Major system integrators have OEM’d our technology globally. It’s a simple model. Global system integrators are now trying to be commerce and cloud delivery platforms, and what the broker does is commerce delivery in the cloud.

Sramana: Essentially, you are saying that there are a fairly large number of companies that can make acquisitions. VC-funded players in this space have a lot of options when it comes to making an exit.

Mohammed Farooq: Yes, absolutely.

Sramana: What problems does the broker model really solve?

Mohammed Farooq: The model for IT is changing. The challenge is that business is becoming a buyer of technology, and has been doing so more and more over the past two years. How do you get into [being] a distributor IT now if every business unit has their own IT? CIOs are losing power, which makes enterprise IT a very challenging environment.

There are three problems that the broker needs to solve in a very comprehensive way. First, there is the issue of governance. How do you govern IT in a distributed world? How do you track cost, usage, assets, compliance, and security?

This segment is part 6 in the series : Bootstrapping Using Services to $15 Million in Venture Capital: Gravitant CEO Mohammed Farooq
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