The Cloud Management Market Emerges

05.06.14
Dan Phillips
Co-founder & Chairman of the Board

CONTACT US

The cloud market continues to gain momentum as start-ups and Fortune 500 companies alike move their infrastructure and assets away from traditional data centers. This cloud migration has spawned another new market that, while still in its infancy, is expected to grow exponentially over the next decade…the cloud management market.

Today, we have many options that are fueling the cloud market growth: public, private, virtual private, and hybrid. What is clear is that Amazon Web Services dominates the market in both market share and innovation. In the past several months alone, AWS has released new functionality for cloud computing that enables virtually any workload to move to the cloud…and of course, the price is right. Because of this innovation, the sheer number of customers using the cloud at scale has driven a level of complexity that requires a suite of new services and management tools that are cloud centric.

So, what categories are emerging in this ecosystem?  Not surprisingly, the same categories that existed for mainframes, client/server, and datacenters.  Customers need to deploy, provision, and manage assets.  They need to monitor fault and performance.  As their cloud infrastructure grows and matures they are looking to allocate, optimize, and charge back costs.  They want to ensure security across the environment.  And, ultimately, customers need to trend, model, plan, and forecast capacity and align to their business metrics.  

Cloud Management Market

Why is this cloud management ecosystem different from earlier IT management solutions? Because cloud data poses new challenges and cloud customers are looking for best of breed and innovative solutions to manage their environments. Cloud customers are looking for open source solutions that are API driven and provide them with the freedom to choose and assemble a solution that is best for their organization. While some legacy tools are used in this market (Splunk, Nagios, and Nessus), the vast majority of cloud management tools and services has been developed and are growing alongside AWS. 

So what does this ecosystem look like today?

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And, what is the evolution of these companies: When were they founded? Who is investing in them? How much have they raised? Here are the highlights by category: 

 

Configuration Management:

  • Chef – 2008 - Amplify, Battery, Ignition Partners, Scale Venture, Citi Ventures, Draper Fisher - $65mil
  • Puppet Labs – 2005 - Radar Partners, Kleiner Perkins, True Ventures - $45.5 mil
  • Ansible – 2013 – MenloVentures, e.ventures - $6 mil
  • SaltStack – 2011 – $685k
  • Rightscale – 2006 - Tenaya, DAG, Benchmark, Index, Presidio - $42.5 mil
  • CloudFormation & Opsworks - AWS

 Fault & Performance Monitoring:

  • New Relic – 2008 – Benchmark, Trinity Ventures, Tenaya Capital, etc. - $274 mil
  • StackDriver – 2012 – Bain Capital, Flybridge Capital - $15 mil
  • PagerDuty – 2009 – Andreesen Horowitz, Baseline Ventures - $12.6 mil
  • Sensu – 2011 – N/A
  • Zenoss – 2005 – Boulder Ventures, Grotech Ventures - $25 mil
  • Graphite – 2012 - Celtic House Venture Partners - $4.4 mil
  • Scout – 2009 – N/A
  • Zabbix – 2005 – N/A
  • CloudWatch and Trusted Advisor - AWS

Cost & Usage Management:

  • CloudHealth – 2013 - .406 Ventures, Sigma Prime Partners - $7.7 mil
  • Cloudability – 2011 – Trinity Ventures, Walden Venture Capital - $9.8 mil
  • Newvem – 2012 - $4 mil – Acquired by DataPipe
  • Cloudyn – 2011 – N/A
  • Cloudcheckr – 2013 – Genesee Capital, Garrison Capital - $2 mil
  • CloudVertical – 2011 – N/A
  • Cloud Cruiser – 2011 – Wavepoint Ventures, Onset Ventures - $8.5 mil
  • ICE – NetFlix
  • EC2 Usage Reports - AWS

Analytics Platform:

  • Datadog – 2010 - OpenView, Index, Amplify, RTP Ventures - $22.4 mil
  • Sumo Logic – 2010 - Sutter Hill Ventures, Greylock Partners - $45mil
  • CloudHealth - 2013 - .406 Ventures, Sigma Prime Partners - $7.7 mil

Security Management:

  • CloudPassage – 2009 - Shasta, Meritech, Musea, Benchmark, Tenaya -  $53 mil
  • Dome9 – 2010 – N/A
  • CloudTrails - AWS

ITSM Platform:

  • CloudHealth - 2013 - .406 Ventures, Sigma Prime Partners - $7.7 mil

 

So where is the cloud management market headed? In effect, the early success that AWS has experienced is helping to fuel the growth of other public and private clouds along with the services and tools required to manage them. According to industry pundits and analysts alike we will see explosive growth over the next several years. One study by IDC,Worldwide Cloud Systems Management Software 2012–2016 Forecast Updateestimates that in 2012 the market totaled $1.2 billion and will grow to more than $4.4 billion in 2017.

As the cloud continues its impressive double digit expansion - 44% annual growth over the next 5 years for public cloud workloads, according to Silicon Angle, 20 Cloud Computing Statistics Every CIO Should Know – we can expect to see a dramatic increase in the cloud management market. Cloud customers will mature and begin to require additional services and capabilities to manage their infrastructure at scale. They will look for best of breed tools and services from each of these categories. And, most importantly, they will demand seamless integration of the management services. 

So what’s the end result? A small subset of the new cloud centric solutions will evolve and become new API and analytics driven integrated platforms. These new platforms will integrate, correlate, and aggregate disparate data sets to deliver true IT service management for the cloud, which will enable widespread enterprise adoption.