UPDATED 17:46 EDT / JULY 17 2020

CLOUD

For Greylock partner Jerry Chen, the road to startup success goes through developers

Despite a pandemic that has disrupted business around the globe, startup companies in the tech are still getting funded. Ten Silicon Valley startup companies disclosed funding of more than $270 million in the past week alone.

One of the recently reported investments included $15 million for Snorkel AI, a data-first, application programming interface-driven platform to build, manage and monitor artificial intelligence applications. Investors include Greylock Management Corp. and the funding of an API-driven startup is very much in keeping with the philosophy of one of its key partners.

“The way you sell and reach companies is going to be through developers,” said Jerry Chen (pictured), partner at Greylock. “All the new startups are doing open-source or API-led adoption because they understand that’s the fastest route to create value for the customer and it’s also the most robust technology stack that a customer can build on top. The companies that are embracing that philosophy of API-led or developer-led are going to be far ahead.”

Chen spoke with John Furrier, host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio. They discussed the impact of software as a service models, adoption of API-based solutions by large platforms, strategic moves by major cloud providers to gain a competitive edge and how the global pandemic has reshaped the path for startup company success.

SaaS fuels collaboration

An API focus in the tech world has been fueled by accelerated digital modernization among many industry verticals based on the sudden shift from fixed offices to remote work environments. Software as a service or SaaS models have become very attractive for enterprises seeking more flexible and collaborative digital solutions.

“Almost every SaaS app now has APIs for integration,” Chen said. “All the big apps like Salesforce now have other platforms, they have APIs, they have extensibility, they understand there’s a long, fat tail of solutions. The ability to have multiple companies work together and share data and collaborate is going to be more important.”

The influence of APIs extends beyond the SaaS market. It is laying the groundwork for the future of cloud computing, according to Chen.

APIs allow cloud providers to build out additional features, such as a recently unveiled cognitive services offering within the Microsoft Azure platform.

“The cloud of tomorrow will be APIs like Stripe for payments or Twilio for communication,” Chen explained. “I see the next evolution not just being virtual machines and containers, but also a bunch of cloud services around data, security and privacy. The cloud vendors can build this next generation of database, privacy or security APIs and they’ll be in the catbird seat for the next 10 years.”

Shifts in the cloud

While the scale and resources of the leading major cloud providers – Amazon Web Services Inc, Microsoft Corp. and Google LLC – offer a distinct advantage, there is still competition for a dominant share of the market.

“Amazon is clearly the market share leader with [Microsoft] Azure coming up quickly behind,” Chen said. “Google is in third, but they’re doing some smart things around technology.”

This past week Google announced BigQuery Omni, a service that will allow users to analyze data stored across multiple clouds. Capabilities of the fully managed data warehouse can be applied to information within AWS and Azure.

“Strategically, if you’re the No. 3 player, you’re going to push a multicloud agenda,” Chen said. “For Google, I think it’s the right strategy and I also think it’s the right strategy for most customers to be multicloud. You can’t be dependent on a single point of failure in your applications and you can’t be dependent on a single cloud as well.”

Although the current enterprise trend is toward multicloud, there has been a growing interest in new technologies and services at the edge. In addition to making an investment in AI companies such as Snorkel, Greylock is also backing Cato Networks Inc., which converges network and point security solutions into a unified cloud native service.

“They’re in this market called secure access service edge and we’ve seen a nice tailwind from them,” Chen noted. “A lot of our companies are figuring out how to do more online sales, bottoms up adoption. No one is flying around to sell any more, you’re not meeting a CISO or CIO over a steak dinner. The companies and founders that are the most adaptable right now, they’re going to thrive.”

Welcome to the new world

For Greylock and its portfolio of companies, being adaptable means adjusting to a new world, one where major gatherings of people at a conference venue or in-person customer briefings may not return for a long time. That has shifted the paradigm from physical to virtual meeting spaces which requires new ways of reaching a bigger audience.

“Just like TV replaced radio as a medium, this virtualized world is going to replace the medium we had before,” Chen said. “You can now reach a larger audience. It’s global, you don’t have to be there in person, you have the remote audience as a first-class citizen now more than ever.”

Here’s the complete video interview, one of many CUBE Conversations from SiliconANGLE and theCUBE:

Photo: SiliconANGLE

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