Former Amazon, Microsoft engineers raise $120K for Seattle cloud startup Cloudshim

A new startup out of Seattle called Cloudshim just raised $120,000 to help grow the company’s self-serve cloud management platform.

Founded by two brothers who previously worked at Microsoft and Amazon — Lokesh Taneja and Vishal Taneja — Cloudshim aims to help companies manage cloud infrastructure services and track associated cloud costs.

“Most competitor products have gone upmarket, tailoring their product around enterprise requirements,” said Lokesh Taneja. “This has left a void to be filled for customers that just want a simple and quick way to manage their cloud without heavy contractual processes.”

The software currently supports Amazon Web Services users but will soon expand to Google Cloud and Microsoft Azure.

Black Lion Ventures was the sole investor in the “pre-seed” round. Cloudshim plans to raise a larger round in the next year. The company employs nine people.

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Cloud startup Snowflake reveals financials in IPO filing as it battles Amazon, Microsoft, others

Snowflake CEO Frank Slootman. (Snowflake Photo)

Cloud computing startup Snowflake Computing filed for an IPO on Monday, revealing its financial data for the first time as the company prepares to go public.

The San Mateo, Calif.-based company said it more than doubled revenue to $242 million in the first half of 2020, with a net loss of $171.3 million, down from $177 million in 2019.

Snowflake’s data warehouse is a specialized type of cloud database built for analytical applications. The company has more than 3,100 customers including Brex, ConAgra Foods, Domino’s, JetBlue, and Nationwide. It has more than 20 offices worldwide, including a Seattle hub, and is one of the most valuable private tech startups in the world.

(Click to enlarge)

Founded in 2012, Snowflake sits in a unique position among other cloud service providers, partnering with giants such as Amazon and Microsoft but also competing against them.

In its IPO filing, Snowflake listed Amazon Web Services, Microsoft Azure, and Google Cloud Platform under potential risk factors to the business. All three competitors offer their own data warehousing service.

Snowflake said a substantial majority of its business runs on AWS. From the filing:

“There is risk that one or more of these public cloud providers could use their respective control of their public clouds to embed innovations or privileged interoperating capabilities in competing products, bundle competing products, provide us unfavorable pricing, leverage its public cloud customer relationships to exclude us from opportunities, and treat us and our customers differently with respect to terms and conditions or regulatory requirements than it would treat its similarly situated customers. Further, they have the resources to acquire or partner with existing and emerging providers of competing technology and thereby accelerate adoption of those competing technologies. All of the foregoing could make it difficult or impossible for us to provide products and services that compete favorably with those of the public cloud providers.”

Longtime Microsoft executive Bob Muglia previously led Snowflake as CEO for five years but stepped down in May 2019. Frank Slootman, who ran ServiceNow as chairman and CEO from 2011 to 2017, now leads the company.

Slootman owns 5.9% of the company while Muglia owns 3.3%, according to the IPO filing. The largest shareholder is Sutter Hill Ventures with a 20.3% stake.

Dragoneer Investment Group — a backer of Airbnb, Slack, Spotify, Uber and other giants — led a $479 million Series G round in February and Salesforce Ventures participated for the first time. That round valued Snowflake at $12.4 billion.

Seattle-based Madrona Venture Group is another investors, though it is not listed in IPO documents as the firm owns less than 5% of the company. Other backers include Altimeter; ICONIQ Capital; Redpoint Ventures; and Sequoia.

Snowflake was one of five tech companies to file for IPOs on Monday alone as tech IPOs continue despite the ongoing pandemic and economic crisis. Many companies have traded higher since debuting on the public markets over the past several months.

Software startups that filed for IPOs *today*:
– Snowflake
– Unity
– JFrog
– Sumo Logic

And now: Asana https://t.co/bcnC63kp5E

— Deirdre Bosa (@dee_bosa) August 24, 2020

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Microsoft cloud vets raise $26M for drug prescription data platform Prescryptive Health

Prescryptive CEO Chris-Blackley. (Prescryptive Photo)

Seattle startup Prescryptive Health raised $26 million for its prescription data platform software.

Founded in 2017 by Microsoft commercial cloud vets Chris Blackley and Kevin Young, the company works with employers to help inform employees about prescription drug prices and other related information. It has direct connection to more than 50,000 pharmacies in its national network. The platform integrates in real-time with benefit plans and providers at the point of care.

“Our platform reduces benefit costs without reducing benefits — that’s good for both employers and employees, especially during this time,” Blackley said.

Morningside Ventures led the round, which included participation from SeaChange Fund and Pallasite Ventures. Morningside co-founder Dr. Gerald Chan joined the board.

Total funding to date for the 30-person company is $35 million.

Prescryptive is one of many digital health startups attracting investor interest this year. Venture funding for the U.S. digital health sector is expected to break a new record in 2020; companies already raised $5.4 billion through June, according to RockHealth.

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Microsoft revenue up 13% to $38B as stay-at-home orders boost cloud and games businesses

Microsoft CEO Satya Nadella, at a past shareholder meeting. (GeekWire Photo / Todd Bishop)

Microsoft posted revenue of $38 billion, up 13%, beating Wall Street’s expectations for its fiscal fourth quarter ended June 30.

The COVID-19 pandemic and related stay-at-home orders boosted the company’s productivity, cloud and gaming businesses, including subscription versions of Microsoft Office, and the Microsoft Azure cloud platform. Revenue from Xbox content and services was up 64% for the quarter.

However, traditional Office software licensing continued to suffer, and the company said LinkedIn and search advertising were impacted negatively due to the slowdown in jobs and the economy.

The company’s profits fell 15% to $11.2 billion, reflecting a $450 million charge from closing Microsoft Stores and an unusual $2.6 billion tax benefit in the prior year.

Excluding extraordinary events and charges, profits would have been up 5% for the quarter, the company said. Its earnings per share of $1.46 beat expectations of $1.37/share.

Microsoft shares are down more than 2% in after-hours trading. Revenue growth in Azure was 47%, a smaller percentage increase than in recent quarters.

The company said its annual commercial cloud revenue exceeded $50 billion for the first time, up 31% from the prior year. Commercial cloud includes Office 365 Commercial, Microsoft Azure, and commercial portions of LinkedIn, Dynamics 365 and other Microsoft cloud businesses.

Microsoft’s earnings conference call starts at 2:30 p.m. Pacific time. Analysts are likely to press Microsoft CEO Satya Nadella about the antitrust complaint that Slack filed against the Redmond company in Europe this morning over Microsoft’s bundling of its Teams collaboration software with its Office 365 subscriptions.

Here are the trends in the company’s three primary divisions:

Productivity and Business Processes: Revenue rose 6% to $11.75 billion. Operating income fell 9% to $3.97 billion.

Office 365 Commercial revenue was up 19%, reflecting growth in software and services subscriptions for businesses. However, traditional Office Commercial licensing revenue declined 34%, reflecting the difficult economy and the ongoing shift to cloud-based subscriptions.

Office Consumer revenue rose 6%, also due to subscription growth, and the number of total Office 365 subscribers rose 23% to 42.7 million.

Intelligent Cloud: Revenue rose 17% to $13.37 billion. Operating income rose 19% to $5.34 billion.

Server products and cloud services revenue rose by $1.9 billion to 19%, due largely to the 47% increase in Azure revenue.

Azure growth was “primarily driven by growth in our consumption-based services,” the company said in its earnings release. “Server products revenue was relatively unchanged, with growth in hybrid and premium solutions, offset by a slowdown in transactional licensing.”

More Personal Computing: Revenue rose 14% to $12.9 billion. Operating income rose 15% to $4.1 billion.

Windows revenue was up 6% overall, due in part to “consumer demand from remote work and learn scenarios, including the benefit in April from unfulfilled third quarter demand,” the company said.

Gaming revenue rose 64%, or $1.3 billion. The company said the increased in Xbox content and services revenue was “primarily due to record engagement, including strength from third-party titles, as stay-at-home guidelines continued. Xbox hardware revenue increased 49%, primarily due to an increase in volume of consoles sold.”

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Amazon settles lawsuit with former AWS marketing VP who joined Google Cloud

Brian Hall

Amazon has reached a confidential legal settlement with Brian Hall, a former Amazon Web Services vice president of product marketing who was sued by the company after taking a job with Google Cloud in alleged violation of the non-compete clause in his Amazon employment agreement.

Hall changed his title on his LinkedIn profile overnight, signaling that he has been cleared to work as vice president of product and industry marketing at Google Cloud. He had listed his job as Google “VP in Purgatory” while the dispute was pending.

The case was the latest in a series of lawsuits filed by Amazon and others in Washington state to enforce non-compete clauses in employment contracts. The controversial agreements have essentially been banned in California. Washington state last year enacted new provisions meant to limit their applicability, but the law doesn’t apply to employees who earn more than $100,000 a year.

While Amazon and other tech companies treat the provisions as a necessary safeguard, critics say they put the Seattle region’s tech industry at a disadvantage to California.

“Settlement terms are usually secret, so we are left with the question of whether AWS is changing its overly-broad non-compete terms and/or its arbitrary enforcement of non-competes,” said Charles Fitzgerald, a Seattle-area angel investor and veteran tech executive who was a vocal supporter of Hall’s case. “At this point, all the uncertainty raised by the legal action against Brian Hall remains for anyone considering a job at AWS.”

Neither the company nor Hall is commenting on details of the settlement, and the court docket has yet to be updated with a record of the resolution.

In a tweet overnight, Hall thanked those who supported his case.

oh, and also some other things I can now do… THANK YOU to all of the people who have supported me in the last few months. @charlesfitz I think you can retire the #freebrianhall tag now. I won’t say much more… https://t.co/FRrJNg8vc8 https://t.co/CVaQlBJFJ7

— Brian Hall (@IsForAt) July 17, 2020

Hall left his role as vice president of product marketing for Amazon Web Services in March and took a senior product marketing job with Google Cloud in early April.

Amazon then sued Hall, claiming that the new role violated the terms of his non-compete agreement and risked exposing valuable competitive information to one of its biggest rivals. The company was seeking to enforce an 18-month non-compete provision in Hall’s employment contract, asking for an injunction to prevent him from working in cloud product marketing for Google during that period. This suit was unusual in that it involved a marketing leader, not an engineering executive or technical leader as in many other cases.

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