market research for cybersecurity

Thundra Investment Rationale

The shift to cloud computing has been driven by the reduced cost and increased operational performance that comes from companies not needing to manage their own IT infrastructure. However, software developers at these companies still need to monitor the health, performance, and security of their software assets, and the infrastructure they run on, to ensure optimal user experience and efficient use of resources. While the large cloud platforms (AWS, Microsoft Azure, and Google Cloud Platform) provide tools to accomplish this there have been a number of companies that have succeeded in providing better or complementary observability tooling. These include Splunk, New Relic, and most recently, Datadog.  

Now there is a new architecture emerging in cloud computing called serverless (also called Function as a Service (FaaS)). Serverless computing, as described by Chris Munns, senior developer advocate for serverless at AWS, is a computing environment where, “There’s no servers to manage or provision at all. This includes nothing that would be bare metal, nothing that’s virtual, nothing that’s a container — anything that involves you managing a host, patching a host, or dealing with anything on an operating system level, is not something you should have to do in the serverless world.” In essence, the serverless model provides another layer of abstraction. 

This allows developers to focus on writing software and the infrastructure provider manages the rest. Applications can scale as needed, and the customer pays for what is used. The benefits of utilizing a serverless computing architecture are numerous, but it does come with one important challenge, and that is lack of visibility into the performance, health and security of the application. This is the problem Thundra, York IE’s latest investment, aims to solve. 

Thundra provides a software application observability and security platform for serverless-centric, container, and virtual machine workloads. The product was initially built in 2017 when the team was at OpsGenie and they were migrating their application to AWS Lambda (AWS’ serverless computing platform). The engineering team needed a way to solve performance problems and optimize their resource consumption. When they were not able to find a sufficient solution in the market, they set about building their own. 

Thundra’s platform now, “successfully manages large-scale microservice applications across development, testing, staging, and production environments” and can pinpoint the line of code causing management, security, or compliance issues. Using Thundra’s platform, customers will be able to reduce the time, cost, and need to use multiple solutions that are currently required for managing traditionally complex microservice applications. This will lead to development teams developing and managing applications faster without sacrificing security or compliance. 

While the roots of the platform are in serverless observability the most recent release of the product has added the capability to support container and virtual machine workloads to provide application teams a standard platform for all cloud-native applications. The updated platform also provides additional features for quick onboarding, enhanced security, accelerated software delivery, and improved best practices for application teams. 

Although Thundra is competing against tools the cloud infrastructure platforms provide (AWS Cloudwatch, AWS X-Ray, Google Stackdriver, Azure Monitor), large infrastructure and application monitoring vendors (Splunk, New Relic, Datadog), and a host of startups and open source options (Epsagon, Dashbird, OpenTracing, Lightstep), York IE believes the company will overcome this challenge for two main reasons.

First, is the strength of Thundra’s technology. Thundra’s software has the ability to understand an application from the set of ever-changing composite services down to line-by-line debugging/troubleshooting of the application code operating at runtime across those services. This is truly unique in the market today as the company’s competitors stop at the local service layer, not diving into the application code itself. As previously mentioned, Thundra was created internally at OpsGenie to provide observability into their own serverless software application. OpsGenie was a successful enterprise software business, which was acquired for $295 million by Atlassian, with 3,000 customers, so the scale of what Thundra was built to achieve proves that it can handle any software application in the market. We believe that no other startup in the space can make the same claim, and they may have to go through additional steps in their sales process to prove their technology. 

The tools the cloud infrastructure platforms provide are useful, especially to startups, but do not compare to the depth of technology of Thundra. This is due to the fact that these tools are additional features to their platform and not core revenue drivers. It is also advantageous to use a third party monitoring tool in these instances. This is further proven by the fact that many customers use these tools in tandem with other monitoring solutions. The solutions that large vendors in the monitoring and performance space provide have either been acquired or are nascent. New Relic acquired serverless monitoring startup, IOpipe in November 2019 and Datadog only announced general availability for their serverless solution in July 2019. In both situations there are risks and concerns about how well these products will perform in older platforms, as well as a question of focus and resources provided to the solutions since they are not significant revenue drivers yet. The most interesting competitor in the opinion of York IE is Splunk. Splunk has acquired Omnition, SignalFx, and Streamlio in the last three months, which combined will increase the capabilities of what assets Splunk can effectively observe. However, Splunk is one of Thundra’s first partners and does not currently provide a solution that is explicitly for serverless applications. Looking at Splunk’s recent history, York IE believes that the company would most likely acquire a solution in this space over building one internally. 

The second reason is the strength of the team at Thundra. Thundra is led by Ken Cheney, who recently assumed the CEO position. Ken has experience in growing startups and managing large teams at enterprise companies. He has held executive positions at companies including Mercury Interactive, Hewlett-Packard, Likewise Software (acquired by EMC), Message Bus, Chef Software, and Qumulo. Ken’s experience will enable him to lead Thundra in its evolution from a great product into a great company. 

Ken is joined on the leadership team by Founder and CTO, Serkan Özal. Serkan was previously an engineering leader at OpsGenie and was part of the team that created Thundra for OpsGenie’s software application. The two of them provide an impressive combination of management and technical expertise for an early stage startup and put Thundra in a great position to execute on the opportunity in the market. 

It is also important to note the strength of Thundra’s board of directors. It is composed of Neeraj Agrawal, a General Partner at Battery Ventures, who has been recognized on the Forbes Midas List, which ranks the top 100 venture capitalists in the world, and has invested in companies such as Marketo, Wayfair, and Nutanix. Battery Ventures is the lead investor in Thundra’s series A funding, and their involvement was a main point of validation when York IE’s team was evaluating the opportunity to invest. Joining Neeraj on the board are Berkay Mollamustafaoğlu, the co-founder and former CEO of OpsGenie, and Izzy Azeri, the co-founder of Stackdriver and Mabl, and former OpsGenie board member. The impressive careers of the members of the leadership team and board of directors will provide strong guidance and expertise to the Thundra team as they build a successful enterprise SaaS business.

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