Thursday, May 26, 2011

Disruptive Cloud Start-Ups - Part 2: AppDirect

Check out the first post of this series on NimbusDB, if you haven't already seen it. This post is about AppDirect. I met with Nicolas Desmarais, a co-founder and the CEO of AppDirect and had a long discussion regarding their current solutions and future strategy. AppDirect is an app store for small businesses. The developers can integrate their applications with AppDirect and AppDirect manages the experience of selling, provisioning, and billing with a 70-30 revenue split with the developers. They also have a white label app store solution that they sell to large customers such as ISPs who can sell these same applications to their customers.

Let's get the things out of the way that I didn't like about them.

The downside:

The target market that comprises of small businesses is extremely difficult to reach to and to market to. This gets even more difficult when the company trying to market is a young start-up and the customers are "S" in SMB. These customers have very different kind of requirements. They look for simple solutions that are not very expensive and have predictable SLA with a clear local support model and not the ones that come with enterprise grade features such as end-to-end integration, single sign on etc. Intuit has owned this channel for a while via Quickbooks and their SMB marketplace (the partner platform) is a great example of selling go-to-market services to other ISVs. AppDirect will have to work much harder if they want to work this channel.

So, why do I think they are disruptive?

The upside:

AppDirect is platform-agnostic. The developers can write applications in any language and run it on any platform as long as they integrate with AppDirect's end points (the APIs). The ISVs or PaaS providers have traditionally locked developers into their platform. That lock-in now goes away.

Even though the telcos are not the most innovative companies, they are laggards with a pile of cash, a ton of customers, and good margins. I believe that telcos can be great enterprise software vendors for SMB. Instead of spending money on the marketing efforts, if AppDirect can convince the Telcos and ISPs to bundle their white label solution, it's a win-win situation. This business alone can make them profitable. What you need is a small number of large customers. Long tail can always be an added bonus.

The team is talented and they have got a good product with some early customers. If they can execute on their vision and pivot as necessary, they're on to something,

Check out their slides and presentation:

Friday, May 6, 2011

Disruptive Cloud Start-Ups - Part 1: NimbusDB

Being at Under The Radar (UTR), watching disruptive companies present and network with entrepreneurs, thought leaders, and venture capitalists is an annual tradition that I don't miss. I have blogged about disruptive start-ups that I saw in the previous years. The biggest exit out of UTR, that I have witnessed so far, is's $212 million acquisition of Heroku. This post is about one of the disruptive start-ups that I saw at UTR this year - NimbusDB.

I met with Barry Morris, the CEO and Founder of NimbusDB at a reception the night before. I had long conversation with him around the issues with legacy databases, NoSQL, and of course NimbusDB. I must say that, after long time, I have seen a company applying all the right design principles to solve a chronic problem - how can you make SQL databases scale so that they don't suck.

One of the main issues with the legacy relational databases is that they were never designed to scale out to begin with. A range of NoSQL solutions addressed the scale-out issue, but the biggest problem with a NoSQL is that NoSQL is not SQL. This is why I was excited when I saw what NimbusDB has to offer: it's a SQL database at the surface but has radically modern architecture underneath that leverages MapReduce to divide and conquer queries, BitTorrent for messaging, and Dynamo for persistence.

NimbusDB's architecture isolates transactions from storage and uses asynchronous messaging across nodes - a non-blocking atom commit protocol - to gain horizontal scalability. At the application layer, it supports the "most" of SQL 99 features and doesn't require the developers to re-learn or re-code. The architecture doesn't involve any kind of sharding and the nodes can scale on any commodity machine on a variety of operating systems. This eliminates an explicit need of a separate hot back-up since any and all nodes serve as a live database in any zone. This makes NimbusDB an always live system, which also solves a major problem with traditional relational databases - high availability. It's an insert only database and it versions every single atom/record. That's how it achieves MVCC as well. The data is compressed on a disk and is accessed from an in-memory node.

I asked Barry about using NimbusDB as an analytic database and he said that the database is currently not optimized for analytic queries, but he does not see why it can't be tuned and configured as an analytic database since the inherent architecture doesn't really have to change. Though, during his pitch, he did mention that NimbusDB may have challenges with heavy reads and heavy writes. I personally believe that solving a problem of analytic query on large volume of data is a much bigger challenge in the cloud due to the inherent distributed nature of the cloud. Similarly, building a heavy-insert system is equally difficult. However, most systems fit somewhere in between. This could be a great target market for NimbusDB.

I haven't played around with the database, but I do intend to do so. On a cursory look, it seems to defy the CAP theorem. Barry seems to disagree with me. The founders of NimbusDB have great backgrounds. Barry was the CEO of IONA and Streambase and has extensive experience in building and leading technology companies. If NimbusDB can execute based on the principles it is designed on, this will be a huge breakthrough.

As a general trend, I see a clear transition, where people finally agree that SQL is still a preferred interface, but the key is to rethink the underlying architecture.

Update: After I published the post, Benjamin Block raised concerns around NimbusDB not getting the CAP theorem. As I mentioned in the post, I also had the same concern, but I would give them benefit of doubt for now and watch the feedback as the product goes into beta.

Check out their slides and the presentation: