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VeloCloud partnership to deliver software defined business solutions

Telstra News

Posted on March 6, 2017

2 min read

With Gartner predicting Software Defined (SD) Wide Area Networks (WAN) will grow from 1% market share today to 30% in three years, Mark Sherman outlines a new investment in VeloCloud, an innovative SD-WAN provider in the United States.

Today we announced a strategic partnership with US based VeloCloud, the Cloud-Delivered SD-WAN™ company, which simplifies and automates enterprise branch networking. The partnership includes an investment by Telstra Ventures in VeloCloud as part of their latest funding round.

This investment is consistent with Telstra’s overall network strategy, with Software Defined Networking (SDN) and Network Function Virtualisation (NFV) increasingly playing a role in offering greater network flexibility and agility for our enterprise customers.

We expect SDN will continue to transform enterprise networking around the world and VeloCloud SD-WAN can help companies achieve more agile and responsive networks, as well as reduce costs.

VeloCloud Cloud-Delivered SD-WAN enables enterprises to securely support application growth, network agility and simplified branch and end-point implementations, while delivering optimised access to cloud services, private data centres and enterprise applications.

Both enterprises and service providers will benefit from the multi-tenant cloud gateway architecture and support real-time applications over private, broadband and wireless links.

Sanjay Uppal, CEO and Co-founder of VeloCloud has said he is looking forward to working closely with us on opportunities in Australia and across Asia. We share his enthusiasm as we think VeloCloud’s technology can help businesses manage their networks in dynamic environments across multiple locations.

Our first step will be to offer VeloCloud technology to customers in mainland China. Telstra’s joint venture in China, Telstra PBS, is a leading provider of enterprise services to customers in mainland China, and is adding VeloCloud SD-WAN solutions to its product suite.

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The next evolution of corporate venture capital

Ventures

Posted on December 7, 2016

4 min read

On the release of a new report, Strategic Growth Investing: The Next Evolution of Corporate Venture Capital, Telstra Ventures MD Mark Sherman shares his thoughts on the origins and evolution of large companies running their own venture capital arms.

The rapid rise of new technology led businesses like Facebook, Amazon and Snapchat is well known. Technology companies now dominate not just their sectors but the list of biggest companies in the world like never before.  What’s less well understood is the critical role Venture Capital (VC) investment has played in funding these businesses through their early life.

Funds from traditional VCs like Sequoia, Accel and Andreessen Horowitz have fueled the ability of agile, technology driven start-ups to quickly bring innovative goods and services to market. Today, the heroes of VC are almost market-makers in their own right – their involvement endorses a start-up’s potential, generating further funding opportunities and attracting customers.

One way that large incumbent corporations have responded to the emergence of digital native competitors is by establishing their own Corporate Venture Capital (CVC) arms so they can embrace and extend emerging companies and technologies.  Direct investments in technology start-ups through CVCs is now a common business strategy for driving innovation at large enterprises alongside tradition R&D programs and mergers and acquisitions.

According to the Global Corporate Venturing Leadership Society, there are now over one thousand corporate venture investment teams and the number of CVCs making an investment in the second quarter of 2016 was almost double the same four years earlier.

Traditional VC investors have often criticized, sometimes justifiably, CVCs as “lumbering giants” that move slowly, drive up asset prices and have a poor track record of picking winners. Despite these critiques a group of strategic CVC arms has been steadily developing a strong track record for high quality investments.

My colleague at Telstra Ventures, Albert Bielinko, and I have written a report on the characteristics of successful CVCs.  We found that CVCs are increasing their share of total funds invested from 10-15% in 2000 to 28% today and our expectation is that it will grow to over 35% in the next 5-10 years.

CVC arms that leverage their parent’s distribution channels, large customer bases and technical expertise have proven they can effectively partner with creative entrepreneurs.  We call this group of CVCs Strategic Growth Investors and argue that by opening up these new paths to market and other value-adds to entrepreneurs, these Strategic Growth Investors offer something that traditional VC firms cannot, which is revenues.

That is why we have prepared our new report, Strategic Growth Investing: The Next Evolution of Corporate Venture Capital.

We believe the CVCs that consistently display certain traits, including access to sufficient capital, the long-term support of their parent and the ability to provide genuine commercial value beyond funding, will be best placed to deliver on their full potential.

At Telstra Ventures, we have invested more than A$250 million in a portfolio of more than 30 technology companies from across the United States, Australia and Asia, and we are applying the Strategic Growth Investor approach.  Having generated more than A$100 million in additional revenue for our investment companies by using and reselling their products we believe this approach is starting to pay off.

 

Five characteristics of a Strategic Growth Investor in Corporate Venture Capital

  1. A significant capital commitment (minimum US$50M per annum and likely to keep scaling) so that they can be a regular investor and active participant in the technology ecosystem.
  2. A long term senior commitment from the parent company based on an alignment with company strategy and an appreciation of the dynamics of venture investing.
  3. Offering entrepreneurs genuine commercial value beyond the investment itself – partners for growth through access to sales channels and customers.
  4. Demonstrating their value by generating new revenues and business opportunities for investees as well as the parent company.
  5. Tightly focused on identifying and investing in ventures that are aligned to their parent’s core business.

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Fire-drilling your company’s security infrastructure

Business and Enterprise

Posted on December 1, 2016

3 min read

As more and more business is conducted online, the importance of strategic and effective investment in cyber security has never been more important, writes Mark Sherman.

Seemingly every week we hear about another high profile cyber security problem.  A few months ago it was a DDOS (‘Distributed Denial of Service’) attack on an internet infrastructure provider in the United States causing outages to high profile sites like Twitter, PayPal, and Spotify.

This sort of attack serves to reinforce the severity of the cybersecurity risk facing millions of businesses around the world.

In response to this risk and the complexity of their own IT systems and networks that have been built up over many years, companies can end up utilising dozens of different security products without the visibility into their overall security readiness.

Recently Telstra Ventures invested in San Diego based AttackIQ, a startup in the emerging market of continuous security validation based in the United States. The company has built the first platform, FireDrillTM, that allows companies to continuously challenge their networks with a specially designed inventory of attacks and validation scenarios.

This service gives companies assurance and peace of mind that they do not have blind spots when it comes to protecting their own IP or customer data.  We know the value of this sort of service and this why we have backed AttackIQ with a recent investment through Telstra Ventures.

Being a cloud-based platform, FireDrillTM can be easily integrated into an existing network to identify security gaps and provide actionable insight to improve firms’ security posture.  The platform also offers multiple use cases such as testing vendor technologies, monitoring critical enterprise components for risk and testing deployed security controls for proper business alignment.

This is an innovative idea that challenges the security landscape and provides an easier and more cost efficient way for companies to test and validate their security infrastructure.

The rise of digital business poses increased exposure to cyber security risks for companies of all sizes, making risks and security management an increasingly important task. That is what driven us to make a strategic investment in the company with an aim to offer some of our enterprise customers the FireDrillTM platform.

In our 2016 Cyber Security Report, we have stressed that businesses should approach cyber security as a business risk rather than an IT risk, meaning that they need the right mix of people, processes and technology to help them mitigate through the risk. We believe that this is where AttackIQ can come in and provide value to businesses in their journey to achieve cyber security.

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Telstra invests in marketing analytics company Singular

Telstra News

Posted on November 11, 2016

2 min read

We’re excited to be announcing the latest investment in our Telstra Ventures portfolio is Singular, a San Francisco based company that offers a marketing analytics platform for many of the world’s most popular mobile apps.

The rapid growth in the volume and diversity of smartphone apps means companies need ways to manage and analyse the success of their marketing efforts through this channel. This is where Singular comes in. They offer a marketing analytics platform that unifies the mobile ecosystem, drawing data from a range of digital sources to measure how people are using apps and engaging with marketing campaigns. This allows them to uncover key insights into what matters most to marketers around return on investment for their programs.

Singular was founded by their current CEO Gadi Elishayov and several other executives who previously worked for Israeli startup Onavo, a mobile analytics company acquired by Facebook last year. Since they were formed in 2014, Singular has tracked and analyzed more than $3 billion in digital marketing expenditure and they count companies like Twitter, Disney and Warner Bros among their customers.

Singular has secured US$15 million in funding in this Series A investment round and we invested alongside venture capitals firms KDWC, Translink Capital and General Catalyst. Singular will use these funds to accelerate product development and support international expansion.

We are looking forward to working with Singular on the next stage of the business growth. They are an innovative and exciting company and they have a product that makes a digital marketer’s life so much easier. Companies that have the best data and team almost always win and we have enjoyed hearing audible “Oh’s” and “Ah’s” from our customer relationships impressed by Singular’s capabilities.

Tags: marketing, mobile,

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NGINX: Powering application delivery online

Tech and Innovation

Posted on April 21, 2016

3 min read

NGINX is a leading web server supporting some of the busiest sites in the world, including Airbnb, Box, Instagram, Netflix and Pinterest. Mark Sherman, Managing Director of Telstra Ventures takes a look at our latest strategic investment.

Application delivery is central to giving customers who consume content online what they want – that is flawless and immediate access to digital content and applications across any device.

Increasingly what people want is image heavy or video content and so companies need to have the capability in place to support this, including in times of peak demand.

For example, at Telstra we operate popular sites and apps for industries such as media and entertainment and e-commerce, which are experiencing continued growth in demand and often very peaky demand.

In addition to having an expert, agile team building and operating our applications, it is crucial to have technology solutions to deliver reliability, security and scale.

When you look under the hood of many of the most popular websites around the world today, you find that they are powered by technology from NGINX, Inc., a San Francisco based company.  NGINX is the number one web server for the 100,000 busiest websites in the world, including Airbnb, Box, Instagram, Netflix, Pinterest, and more. Their open source software is in use on more than 140 million sites worldwide.

That is why it is very exciting that Telstra Ventures has made a strategic investment in NGINX.  We have been impressed with how NGINX has delivered improved capabilities and performance in application delivery, especially for video heavy sites, and sites experiencing high traffic volumes. Their popular web server and reverse proxy solution are renowned for its load balancing capabilities, high performance, security, and scale.

We believe they have significant growth potential thanks to their rapidly expanding technology leadership in the application delivery and deployment market. Indeed, we will actively look to work with them to expand their market reach to new geographies, including Australia and across the Asia-Pacific, leveraging on our extensive customer footprint.

There’s a bright future for NGINX while global mobile data traffic continues to grow. According to a research by Cisco, global mobile data traffic will increase nearly eightfold between 2015 and 2020, reaching 30.6 exabytes per month by 2020[1]. This vast amount of data traffic represents a significant opportunity for NGINX to help all businesses, especially those in e-commerce or media and entertainment, improve their customer experience and embrace more software-defined application services.

[1] Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2015–2020 White Paper

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