C is for Cloud: Appirio raises Series C from GGV and Sequoia

Chris Barbin

Given today's headlines, we're humbled to announce our Series C funding from GGV Capital(formerly Granite Global Ventures) and Sequoia Capital.  Amidst all the uncertainty confronting business and IT in today's economic climate, one thing remains certain: enterprise IT is moving to the cloud.  That single idea is at the core of Appirio's business, and is an idea that's worth investing in precisely because we're in the worst spending environment any of us can remember.

The headlines for most venture-backed startups are grim: "Tech start-ups call it quits," writes the Wall Street Journal, as GigaOm describes "VCs sowing panic in their portfolio companies."   We remember the buzz created by Sequoia's all-portfolio meeting last fall, featuring a picture of a slaughtered pig with all the fat removed. 

Why is Appirio growing so dramatically in this environment?

• Our market: Far more important than anything about Appirio's business is the market opportunity that we've targeted.  Cloud computing will disrupt $1 trillion of IT spending-- great things happen when you're able to accelerate an industry transition of this magnitude.
  
• Our model: New markets call for innovative business models.  Traditional wisdom says you have to choose whether to be a services company or a product company.  We believe that the availability of web platforms makes a truly hybrid business model not only possible, but advantageous.  Consider our new product offerings in 2009, Services Management and Facebook Referral Management --  neither would have been possible without the opportunity to directly serve and learn from leading customers in these markets.  Our model of delivering high end professional services, innovative software products and compelling cloudsourcing solutions is what we like to call a 'next generation IBM without the baggage of hardware'.  Customers need alternatives to the Global SI's and traditional enterprise software - our hybrid model directly addresses that need and has delivered repeatable results for our customers.
  
• Our team: There's something special created when you assemble a team of professionals passionate about transforming an industry.  We've been able to quadruple the size of our team in the last 12 months (and remain hiring now), because our #1 goal has been to hire the best and brightest change agents in the industry.  "The Appirio Way " comes through in every interaction we have with customers and partners, whether through sales, services, support, or R&D. 

Its a cliche that the easiest time to raise money is when you don't need it.  Appirio's business model is strong and our services business has been profitable since our founding in October 2006.  We create substantial value for our clients and share in the rewards of their success.  

But it is still "early days" in the business of accelerating the adoption of on-demand in the enterprise, and we're excited to have our new partners at GGV Capital on-board.  GGV specializes in deploying expansion capital, and today's investment from GGV and Sequoia Capital will be invaluable in our continued efforts to invest in products built on Force.com & Google App Engine, supporting and evolving our team of cloud computing professionals and investing in and innovating along side our strategic partners Salesforce.com, Google and Facebook. 

Consider, for example, our other announcement today-- Appirio's expansion into Japan, the second largest IT market in the world, barely penetrated by traditional packaged application vendors.  We believe that Japan has the opportunity to completely leapfrog on-premise packaged software and migrate directly to custom applications developed on an on-demand platform.  Being part of this process (and the largest Force.com deployment in the world) is tremendously exciting. 

We invite you to get involved.  Schedule a discussion with us, take a trial of one of our products, look into joining our team, or even just contribute an idea.  The transition to cloud computing is one thing to be certain of, even in these very uncertain times.  We look forward to working together!

The 'Value' of Friendship

Narinder Singh

Today, Appirio released our new Referral Management Solution. You may have seen some of the positive coverage of the product already, but we wanted to provide a deeper look into why we created it and why it's so valuable for helping enterprises connect with customers, partners and employees in a Web 2.0 world.

In a world that is more interconnected than ever and that offers more information than people can actually consume, the commercial value of 'friendship' and word of mouth referrals is at an all time high. This is why LinkedIn has become such a boon to recruiters looking to fill open job positions. Why enterprises are investing in social software both inside and outside company walls. And why recent PEW research shows an increasing number of adults choosing to join Facebook, which is already up to 150 million users and growing every day.

Over the past two years, Facebook has become the medium for keeping large networks of people up-to-date on your life. Facebook is a different animal than LinkedIn, where user profiles are mainly updated only when someone is looking for a job change. On Facebook, contacts are kept up-to-date on your life by default - the events you're going to, what you're reading, your personal and professional interests and more. This, combined with a more open approach to interfacing with other applications, ultimately makes Facebook a better opportunity for companies looking to tap into the value of these networks to hire new employees, spread the word about new offers, build brands or solidify relationships.

HOWEVER, there must be a careful balance in tapping into the commercial value of a friendship. In the physical world, we are appreciative when a friend recommends a potential career connection, a valuable discount, or a product they think you might like. Yet we can feel repulsed when we know someone is using the guise of friendship just to try to get something out of us. Interacting with online social networks requires preserving the same level of trust and integrity.

That's why when Appirio created our Referral Management Solution, we had two key prerequisites: to maintain the trust inherent in these social networks and to provide relevant value to users (as well as companies). This is why we designed our solution to:

1. Give the user full control over every decision to make a referral. The user decides whether to install the application and when to act on recommendations that the app surfaces in Facebook. This SlideShare presentation on the solution describes in more detail how this works.
2. Encourage people to make referrals because they make sense, not simply for the reward. The application helps make recommendations that are most relevant to your friends. After all, it's the quality of the product, service or offering that will ultimately determine how often it's referred and who chooses to act on it.
   

Appirio's new solution is designed to help companies tap into the commercial value of friendships by incorporating the use of social networks in a mature and responsible way. The days of email spam, where marketers send thousands of useless emails with abysmal response rates are (hopefully) fading. For despite generating a return for the spammer, the net result of mass email on the entire community of recipients is decidedly negative. We instead relate our solutions to a next-generation Nielsen. Without interfering with the experience of the end-user, we allow them to make judgments on what they are seeing and make referrals to their friends.

For these types of viral and word-of-mouth campaigns to work, we also believe it's important for companies to have a way to manage and measure the effectiveness of their approach. Our new solution looks to address this issue by providing the ability to understand how your users talk about your product through recommendations, and offering native integration to back-end enterprise systems so companies can quantitatively measure the effectiveness of these campaigns.

We hope Appirio's Referral Management Solution can help people find jobs, learn about products and services their friends love, and allow companies to listen better to their customers, partners and employees. After all, those attributes are as timeless as the value of friendship itself.