Sramana Mitra: What is your perspective on enterprise companies? In a lot of sectors, the mid-market is underserved and enterprise is over-served.
Rajeev Madhavan: One of the mid-market companies we’re serving in that space is a company called Reflektion. Most of the retail vendors are mid-market. They’re now scaling to the higher end but they started out with mid-market.
The real delta is in the mid-market, the number of players that are there to support your software is almost zero. You really need to make your software completely deployable with the least amount of human beings required. It’s got to get completely automated. If you’re providing software like the high-end Adobe software, you just cannot support and defend that kind of customers. You really need to do that with the least amount of resources.
We have done one or two companies. The advice and the amount of work we need to do with the entrepreneurs is to see how quickly is it deployable. How quickly can we get the customer up and running? You’re there to make it idiot-proof. A lot of founders do not think about that because their experience has been on the high-end of the enterprise and they think that can scale to the mid-market. It’s very important to make it that easy because you can’t afford to build a business with a lot of touch points.
Sramana Mitra: What about geography? What is your comfort zone?
Rajeev Madhavan: That is very local. We like to be in Silicon Valley. We need to talk to the founders. We have to be able to go up and down to meet with them. We are Silicon Valley-centric. They can have R&D facilities outside but when they start, we want to see companies in Silicon Valley.
Sramana Mitra: Let’s do a few highlights of your portfolio with some context about when they came to you, what was the thought process that you applied to decide to invest in them.
Rajeev Madhavan: Me and my partner were thinking about the need for protecting file security. Let me give you a history of a company called Vera. We were the first investors in the company. Before they came to us, thematically we concluded that why isn’t there a capability for companies to give temporaru access to a document. It’s always encrypted. Can you actually do it with rules to control the relationship? You can read it, but you can’t forward it outside your domain.
We went out and made phone calls. One of the entrepreneurs that Chris knew was working on something similar. We went and actively campaigned and became the first investors. Think of it as Snapchat but with rules applied to documents at any file level. It could be a PowerPoint sitting on a Google Drive. It is a classic case of the kinds of companies we work with.
We have another company in security that we funded again. A lot of people are stealing information using Bluetooth sensors and scanners. How do you protect things that connect Bluetooth to your computer and then the computer is connected via WiFi into your internal network? How do you now prevent the stealing of data through LTE? Being able to deploy it in mid-market is a phenomenal opportunity. That’s where the problem is going to be.
Very large companies are going to put boundaries and perimeters and put all sorts of control mechanisms to try and control this but this is a much easier way to control it. Again, they came in with a rough idea. They’re going to be launching next month. There’s a consumer app which we’re in the process of doing where they have some prototype. There’s another company called Robin Systems which has done a huge contribution in application-defined infrastructure.
In the early days, VMWare made one computer look like 10 computers. Today’s problem, it has changed. You need to make hundreds of computers look like one cluster. If you’re using siloed environment, then you’re wasting a lot of compute resources. If you try to use virtualization in that space, your performance goes down. We’re getting to the point where lots and lots of applications are being written.
How do you provide an infrastructure that gives you that? We think it’s bit of an opportunity as what Nutanix was. We helped them bring in a CEO. In fact, somebody who used to run half of Magma and was one of the main causes of being able to create Magma runs the company. The key architect and the CTO came from Veritas. We were incidental in marrying the two together.
We not only helped create the company but we helped put the two people that were key to get the product out the door. They’re on the hunt for some very big opportunity in that there’s nothing that really addresses the efficiency of applications that run on hundreds of computers and hundreds of applications and providing certain levels of SLAs for each of those.