Yottaa, an Anti-Lean Startup, Makes Move to Undercut Compuware, Akamai, HP

9/17/12Follow @gthuang

Web infrastructure is a lucrative but tricky business. It requires a lot of resources and investment to come up with a compelling product. Now a Boston startup has a new set of offerings that broaden its scope on the Web—and could end up disrupting the big boys in the field.

Yottaa, a three-year-old company known for making websites run faster, is rolling out version 2.0 of its Web optimization software today. But it’s also moving into a new realm: application performance management, which means software to help businesses run their Web and mobile apps more efficiently and securely (to keep transactions humming along, for example). That move comes via the company’s 2.0 release, also today, of its website monitoring software.

It’s a big step for Yottaa, which had its first product release late last year. And it’s a bit unusual. As founder and CEO Coach Wei explains, “Big companies don’t do both application performance management and Web optimization. But we’re not trying to solve [problems] for the top 1000 websites. We’re trying to solve it for millions of websites.” (For now, something like 85,000 sites have used Yottaa’s software.)

On the Web optimization side, Yottaa is somewhat comparable to Akamai (NASDAQ: AKAM) and Limelight Networks (NASDAQ: LLNW), which offer traditional content delivery networks but also work on website optimization (see Akamai’s acquisitions of Blaze Software and FastSoft). Now, on the application management side, Yottaa is moving into a sector dominated by the likes of Hewlett Packard (NYSE: HPQ), CA Technologies (NASDAQ: CA), and Compuware (NASDAQ: CPWR), which in recent years has gobbled up Boston-area firms Gomez and dynaTrace.

In both fields, Yottaa is trying to sell a cheaper, more accessible product than the big boys, who tend to focus on the so-called Global 2000 companies as customers. By contrast, Yottaa’s software is “designed for the mass market,” says Wei. “Anyone can get this, it’s designed to be affordable. There’s a huge gap in the market.”

The startup’s technology and products have required a different sort of approach. We’ve previously written about Yottaa’s “anti-lean” model for company-building, which entails investing in a big engineering team and IT infrastructure. The firm has about 50 employees, split between Boston and Beijing, and it runs 26 data centers worldwide to handle its Web optimization, monitoring, and testing needs. Yottaa has raised about $13 million in two funding rounds from investors including General Catalyst, Stata Venture Partners, and Cambridge West Ventures.

To give you a feel for the technology, Wei says the company has “built a global testing network” that enables it to test customers’ Web apps on many different browsers in different locations, under different types of connectivity (cable, DSL, FiOS, broadband). Then Yottaa’s software generates a visual report that helps customers identify bottlenecks and solve various problems. For instance, an e-commerce site might want to run faster by not loading all product images until the user scrolls down; the site can make the change and test the result quickly. And on the performance management side, Yottaa’s software continuously tries to detect problems with customers’ sites—the GoDaddy outage, say—and, if it does, it sends them alerts and notifications via text or e-mail.

Yottaa clearly has a long way to go in the market, but it’s trying to tackle some ambitious problems on the modern Web. On the business front, Wei declined to share any details about revenue growth. But he says that with the latest product release, the startup is moving heavily into sales and marketing mode.

“We are in transition as a company,” says Wei. “We have all the components in place. We wanted to integrate a set of services together, and a lot of people are using it. Now we shift from being very product-focused to business- and sales-focused.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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