Our Investment in Boundary
Today, we are pleased to announce our Series B investment in Boundary. Boundary is the application performance monitoring solution designed for distributed application environments. The team is led by Gary Read as CEO, and technical founder Cliff Moon.
In every investment we make at ScaleVP, we look for two things, broad market trends and great execution. Boundary has both.
The Big Trend: Cloud Computing makes existing systems management obsolete
Sometimes we take the whole startup game for granted and we forget how audacious and crazy it all is. These companies come along, and in a world that is growing overall at 1.2% this year (go US economy!), they project five or ten years, of 100% and 200% year-on-year grow rates. What is more amazing is that some of them pull it off. How do they do it?
The do it by having a product and a vision that is linked to the wider trends that are driving change in the overall technology industry. Companies do not grow from $1 MM to $100 MM on internal effort alone, no matter how hard the team tries. They grow in part by being connected to durable long-term trends in the market that provide the lift that makes all the internal effort worthwhile. For Boundary, it's the inexorable shift to cloud computing architecture.
Boundary helps the IT operations managers of these new, cloud based, distributed networks monitor what is going on in their network. It's part of the systems management market - technologies that help IT guys know if their stuff is working - and it's been around forever. When IT was running mainframes, companies like IBM and BMC sold software to help IT know if the Big Iron was running right. When the architecture shifted from mainframes to client server, with lots of PC's and a smaller number of servers, IBM and BMC were slow to change, and left the opportunity open for new vendors like Tivoli. Every shift in computing architecture since, has disrupted the related systems management market, and created a space for new companies like Bladelogic, SolarWinds, New Relic and Splunk, four of the most impressive systems management companies of the past ten years.
The shift to a cloud based architecture is a big trend for IT and a huge disruptor for systems management software. When your computing is being done on thousands of virtual machines somewhere in the cloud on Amazon or Rackspace, then IT operations cannot use any of the existing technology to monitor what is going on in the network. All the existing solutions assume hardware level access to the physical network to enable monitoring and that just isn't possible in the cloud. IT doesn't own the hardware, cannot physically touch it, and most likely does not even know where it is.
Boundary solves that problem elegantly, by adding a meter/agent to every server or virtual server that transmits network level information back to the Boundary website. Customers can go to that website and see in real time the traffic flows for their system, regardless of where the servers reside. One of the fun parts of the due diligence for Boundary has been going on customer visits and watching the "aha" moment when IT sees, often for the first time, where their application is running in the network, and where every packet is coming from and going to. We believe that every IT professional who is responsible for the performance and security of a distributed application is going to have to have access to this type of information over the next five years. That is a lot of IT professionals. Amazon Web Services is already running 500 million virtual servers and this number is only going to go up. That is the long term trend that drives Boundary.
Great Execution: The Boundary Team
A great opportunity is a good start, but it takes great execution to deliver on it. The Boundary team has done a really nice job of getting the product to market, and signing early, tech savvy customers like GitHub. The early customer traction is strong and many of our portfolio companies have adopted it or are considering it right now.
The team is led by CEO Gary Read who has had prior success in the same market at Nimsoft and technical founder Cliff Moon who designed and built the product. What we like most about the team is that they absolutely understand the mission and what it takes to take it to the next level. Listening to customers and prospects on what higher level analysis is needed around a specific application or security threat. Boundary is turning that feedback into new application packages that run on top of the core platform and that can be tweaked by IT to answer whatever is the most pertinent question for IT right now. Stay tuned for more!
We are delighted to have made this investment and look forward to working with the Boundary team and Lightspeed Ventures. We think Boundary is more than ready for Scale.
Originally published July 9, 2012.