Cloud, Containers, IoT & More: 10 Startups to Watch in 2017

There is a plethora of startups focusing on technologies like Internet of Things (IoT), security, and open source software hitting the market. This is no coincidence. Startups tend to highlight trends that the industry is seeing, and it will be interesting to see how these markets play out.

McKinsey & Company estimates there will be between 26 and 30 billion connected IoT devices by 2020. Not only does that create a huge market for IoT startups to play in, it creates a huge market for security, especially in light of the massive data breaches affecting billions of accounts, and open source startups too.

Here is a list of startups that we think are embracing these trends and that you should keep an eye on in the near future. This list is completely subjective. Use the comments to let us know who we left out.

1. Kontena

Less than a year old, this startup is on a mission to offer an alternative to Kubernetes. Using its platform, developers can create Kontena Services including a container image, networking information, and any stateful attributes of its workload. Kontena Stacks also allow developers to manage applications that are made of multiple containers. It is able to run on-premises, in the cloud, or in hybrid environments.

The Finnish startup has only 12 people on the team, and has raised a small, undisclosed amount of funding from a Finnish venture capital firm called Lifeline Ventures.

2. FogHorn Systems

This IoT startup found its place at the edge of the network running on Intel or ARM-based PC devices. Its compute stack allows enterprises to apply analytics and machine learning at the edge instead of relying on the cloud.

IoT and 5G technologies can produce a lot of data, and sending data to the cloud can require a lot of bandwidth or result in latency.For certain applications and time-sensitive data, it makes more sense to process data at the edge, using fog computing. FogHorn allows companies to lower their cloud costs and run only what is necessary in the cloud.

GE Ventures contributed to a $12 million Series A in July, planning to integrate FogHorn with the Predix IoT platform.

3. Xperiel

This IoT startup was formed by a group of former Google engineers and is led by two brothers — Alex Hertel, CEO, and Philipp Hertel, CTO. Xperiel’s platform differs from those of other IoT startups because it provides an orchestration layer for what it calls the Real World Web. This makes it possible to connect cloud-based applications and deliver what it calls a “mixed reality” to connected devices.

The technology, developed by the Hertel brothers, connects digital and physical assets. For example, it could connect a stadium scoreboard to digital signage, social channels and the television, and could deliver interactive marketing experiences to fans in the stadium.

Xperiel is using the consumer marketing angle to its advantage and is initially targeting sports teams with its technology. The Los Angeles Dodgers and the Major League Baseball are strategic investors in the firm.

The Sunnyvale, California-based startup raised $7 million in August from some high-profile Silicon Valley Investors. These include Sun Microsystems’ co-founder Andy Bechtolsheim, Stanford President, John Hennessy, Intuit’s Scott Cook, Google board member Diane Greene, and Uber founder Garrett Camp.

4. RIFT.io

Only two years old, Rift.io is making a name for itself as a founding member of the Open Source MANO (OSM) group alongside Canonical and Telefónica. It has contributed significant code, including network service orchestration, a graphical user interface, and automation tools.

Only a month after the open source group’s first general-availability release, Rift.io rolled out the first commercial software based on that code. It created a hyperscale engine made of a set of application program interfaces (APIs) and built network orchestration on top of that.

RIFT.ware 4.3.3 includes an online virtual network function (VNF) descriptor package generator to guide users through an automated VNF on-boarding process. It also offers multisite support for network services spanning multiple data centers and clouds as well as support for Brocade Vyatta Network OS and the OpenStack Mitaka release.

5. Packet

Packet was founded in 2014 and launched its service in 2015, hoping to prove that a bare metal cloud can be as easy to use as Amazon Web Services (AWS). “Bare metal” refers to servers that are provided without an operating system; the customer provides all the software.

Because it isn’t running unneeded software, it can expect more performance from the CPU, making it more attractive to developers. Packet takes it even further by not having customers share servers.

The company highlights that its cloud was built for the age of containers and automation, supporting modern developer tools.

The company raised $9.4 million in September led by SoftBank helping bring its technology to Japan. About a month later Packet began letting its customers choose servers running ARM-based microprocessors instead of Intel-based servers. This is not surprising seeing that SoftBank completed is $32 billion acquisition of ARM Holdings in August.

6. Affirmed Networks

About two years ago, AT&T named Affirmed Networks a Domain 2.0 supplier for its virtual evolved packet core (vEPC), and the 5-year-old startup has taken off ever since. The company’s claim to fame was jump-started by its vEPC running production traffic in LTE networks. This is important because at the time, not even companies like Ericsson or Alcatel Lucent were commercially shipping their vEPCs.

Evolved packet cores are the complex network hardware that cellular data and voice networks rest on. And to be able to virtualize that was quite the accomplishment and performance enhancer for telcos.

The company has grown quite a bit since and works with a number of big name companies like HP, Intel, IBM, EMC, VMware, Symantec, Juniper, Dell, and Mellanox.

7. Deep Instinct

While many startups claim to use machine learning for security, Deep Instinct claims to go a step further by applying the computer-science discipline of deep learning to security to make its operation resemble human intuition. Its artificial brain is able to recognize zero-day threats by building its own sense of what’s normal or malicious, the company claims.

Deep learning is a type of artificial intelligence. While machine learning requires an expert to step in and identify certain features that a system should pay attention to, deep learning doesn’t require that level of human intervention.

However, it does require humans to tell Deep Instinct’s AI which files are good or bad and is then able to draw its own conclusions on what malicious files look like based on previous attacks.

Deep Instinct customers have access to its artificial brain through a small agent, which goes on devices like smartphones or laptops. The Tel Aviv-based company is about two years old and has about 65 employees.

8. Platform9

This startup was founded by formed VMware engineers in 2014 to help enterprises create their own AWS-like private clouds. The company is able to turn a group of servers into a self-service private cloud.

Shortly after the company’s launch, Platform9 released its first service — a cloud-based offering that remotely deploys and manages OpenStack on private servers. The company integrated its OpenStack controller service with VMware vSphere services as well.

This year, Platform9 released a managed Kuberenetes platform intended to make it easier for users to deploy and manage Docker containers.

Headquartered in Sunnyvale, California, Plaform9 has raised $14.5 million to date led by Menlo Ventures and Redpoint Ventures.

9. ZeroStack

ZeroStack offers a hyperconverged, on-premises appliance running its own version of OpenStack, which is based on the Kilo and Liberty releases. It’s designed to let users build out private clouds combining compute, storage, networking, and management onto one platform. More importantly, ZeroStack handles the cloud management remotely, as a managed service.

ZeroStack was founded by Kiran Bondalapati, a founding engineer at Bromium, and Ajay Gulati, a senior architect and a R&D lead at VMware. The company has taken multiple steps to make its platform as VMware-friendly as possible to suit enterprises and recently announced a feature that converts VMware workloads to run in ZeroStack’s cloud.

The company has about 45 employees and has raised $22 million since it got its start in 2014.

10. Aporeto

Last but not least, Aporeto is a 1-year-old startup that has taken a surprisingly simple approach to container security.

Traditional security systems try to block certain actions from hackers, whereas Aporeto takes the opposite approach, using a white list. This method means the operator will specify which actions are permitted, and anything else gets blocked by default.

This is manifested through the company’s open source project, Trireme, which consists of just 5,000 lines of code. It applies the white list concept by making containers identify themselves to one another.

This removes unknown containers as an entry point for hackers, because no container should be willing to communicate with outside signatures, reducing security to label-matching.

Among Aporeto’s founders is Dmitri Stiliadis, the former CTO of Nuage Networks, which is where Aporeto’s inspiration stems from. At Nuage he found the company was turning to the network to solve security problems, which was primarily a guessing game.


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