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Thought Leaders in Cloud Computing: Egnyte CEO Vineet Jain (Part 5)

Posted on Friday, Jul 11th 2014

Sramana Mitra: Money is flowing freely now. There is no shortage of money especially for late stage deals. People are raising money like crazy.

Vineet Jain: It’s a sign of times. My Series D came in nine days.

SramanaMitra: It’s good and bad. Some of it is good, because the good companies have plenty of opportunities.

Vineet Jain: Everyone wants to pontificate and say, “This liquidity in the market, which is sloshing around, won’t be here for too long. The stock market is just reaching the peaks.”

Sramana Mitra: I think there will be lots of liquidity for a long time.

Vineet Jain: We can be caught up in this, but the fundamentals are heads down and execute. Our gross margin last year was 60%. I can’t give you a precise number, but we were in the 18 to 20 range. We’ve been doubling every year. That’s a big challenge for me right now. The gross margin will improve by eight points. I won’t be cash flow break-even until maybe next year but that’s not the focus because right now, it’s top line growth. I also haven’t done the foolish thing of just top line growth at all cost, which is the problem you’re seeing.

Sramana Mitra: I fully agree with you. It’s so much more the disciplined approach of company building. I want you to lift yourself out of Egnyte and give me an industry level perspective on what trends you see coming in the horizon. What are open problems that you’re hearing customers mention that are not being addressed?

Vineet Jain: There are two parts to my answer. One is specific to my space. Even though there is this whole notion of going into the cloud, there are concerns about security – not so much about privacy. It’s about control and more so in Europe than in the US. You’ll have to address those concerns because the whole notion of why I should go to the cloud has long sailed. It’s a CAPEX to OPEX story. People are gradually getting comfortable that these vendors are providing better security and better controls. Still, the security bandwagon continues to march on. You need to keep on adding more and more capabilities and address concerns because it’s not there yet.

Everyone wants to talk about the Internet of Things. I don’t know what the hell that means. But the reality is indeed, there is a lot of data being generated from whatever touchpoints we have, whether it’s explicit or indirect. There are some basic things happening. This is my favorite example.

Imagine I’m in a meeting with a customer. I finish my sales call. In that meeting, there were four people including their CISO [Chief Information Security Officer] and a bunch of other guys. I walk back to my desktop and pop open my browser. The system knows my calendar. The system knows that I’ve talked to this company and that some email exchanges had happened. I get to see relevant information about these people or which other companies they are associated with. Right now, I have to piece it together. I have to go to LinkedIn or Imagine something that does that for me without lifting a finger. It’s a little bit of walking into artificial intelligence but it’s not artificial intelligence. Basically, it’s doing a semantic search and giving me all kinds of information because the data exists. That’s one of my favorite areas where I think we will see some stuff done by companies.

Sramana Mitra: Have you read any of my writings on Web 3.0?

Vineet Jain: No. What’s that about?

This segment is part 5 in the series : Thought Leaders in Cloud Computing: Egnyte CEO Vineet Jain
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