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10 Hot Cloud Startups to Watch

03/05/2013
 · CIO

By Jeff Vance, Startup 50

After evaluating more than 150 new cloud ventures, here are the top 10 cloud startups. These companies are shaping--or have the potential to shape--how the cloud computing market will evolve.
 
CIO — When we requested suggestions for cloud startups to evaluate in order to come up with the CIO.com Top 10 list, we received more than 150 nominations. After reviewing the nominations and getting your input, we narrowed the list down to the 10 most promising.

The Top 10 mixes track record with potential. Some startups, such as Aryaka Networks and HyTrust, are more established and have long lists of customers wins. The list also includes more recent startups that are included more for their potential than their current status in the market. Several of these newer companies are helping determine just how the cloud computing market will evolve. They include dinCloud, Nebula and SaaS Markets.

The process for this roundup was a little different than in the past. After the nominees were narrowed down to 25, the list was posted at Startup50 and then we let readers vote. After more than 4,500 votes were cast, we finalized the top 10 list. However, voting was weighted at only 25 percent of the overall score. Equally important were pedigree of the management team, VC funding and just how pressing the pain point is that the startup addresses. Yet, most of the top vote-getters ended up in the final roundup (7 out of 10).

We want to take the Top 10 list a step further. In a week or so, these startups will be reordered and ranked (they are in alphabetical order now) based on voting, funding, strength of the management team and several other factors.

You can vote for your top startup now.

If you feel some startup was snubbed, you also have the option to write one in. If any of the write-ins get enough support, we may expand this list by one or two and include them when we release the final rankings.

[More specifics on the selection criteria and weighting]

As votes were tabulated votes, some companies, such as Nebula, are included here despite it not being on the original list of 25 nominees. Other impressive startups that weren't in the initial batch of 150 include RiverMeadow (cloud migration), InverCloud (PaaS) and Oxygen Cloud (cloud storage and collaboration).

We also learned of a few stealth-mode startups to keep an eye out for, such as Symbolic IO (storage). On paper at least, there's an impressive batch of startups getting ready to emerge from stealth-mode soon.

With those caveats out of the way, here are 10 Hot Cloud Startups you should watch (in alphabetical order).

1. AppZero

What they do: Help companies migrate server applications to the cloud.

Headquarters: Andover, Mass.

CEO: Greg O'Connor. He previously served as founder and president of Sonic Software, acquired in 2005 by Progress Software.

Founded: September 2010

Funding: $10 million in angel funding from BDC Venture Capital, Covington Capital and private investors.

Why they're on this list: Moving applications from traditional IT systems to the cloud isn't easy. AppZero encapsulates an application and its dependencies in a "virtual application appliance," without a virtual machine (VM). The result is an application that is flexible, "hypervisor-agnostic, cloud independent, and fast." Current customers include Pabst Blue Ribbon.

AppZero also staged a solid push in Startup50 voting, winning the overall competition with 17 percent of the vote total. Why does that matter?

What voting proves to me is that the startup is focused enough on marketing and PR to effectively get its message out. It also shows that the message resonates well enough to entice third-parties to support it. If you think this is trivial, you're forgetting that plenty of technically superior startups have failed over the years because they failed to connect with prospective customers.

Market Potential and Competitive Landscape: Gartner predicts that the cloud Infrastructure-as-a-Service (IaaS) spending will exceed $72 billion, (42 percent CAGR) by 2016.  Competitors include companies like PlateSpin (which is now part of NetIQ).

 

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