Ignition’s Artale: 2012 is the Year of Cloud Applications

1/11/12Follow @curtwoodward

For all of you who’ve felt like cloud computing is some kind of foreign territory that you might never visit or fully understand, take heart. Ignition Partners managing director Frank Artale, who specializes in the sector, says everyone else has spent most of the past two years just figuring out what in the hell is going on.

“2011 really rounded out the year of the transition in terms of cloud computing from ‘What is it?’ to ‘How do I do it?’ Artale says. “2012 and beyond … is really, ‘Now I know what this is. I know how to do it. So what are the first projects?’”

That’s where the venture capitalist, who led a rapid-fire series of investments upon joining the Bellevue-based firm last year, sees the next round of opportunities in cloud computing.

Frank Artale

For me and you, that could mean some tangible benefits, as application developers start putting to use assets like the cloud-based database infrastructure that’s been building up over the past few years.

There are some obvious areas where this will probably be brought to bear first—finance and healthcare, two industry “verticals” that draw lots of money and produce or track tons of data.

Artale says the less obvious applications, ones that will be more apparent to the wider business world, might include some powerful ways of pulling together knowledge and expertise. As I prepare for my next story, for example, maybe I’d send an e-mail to other people at Xconomy to help generate a list of smart questions or good sources. But a smart software service might be able to extract data from contact lists, old stories, and other sources to give me a head start on my research (without pestering everyone with yet another e-mail).

“I think the investments in the infrastructure—those bets have been placed. Now you’ll start seeing bets on companies taking advantage of this,” Artale says. “You don’t see too many people talking about the applications yet. The noise, the buzz is still around the infrastructure itself.”

“I also believe that in this year, and also into 2013, we’ll see a more general acceptance of platforms as a service,” Artale says, pointing to the Ignition portfolio company AppFog as an example. “The bets are largely being placed right now in various platform as a service startups.”

You probably won’t see quite as many investments from Artale himself this year—he had his six main 2011 deals on a list from existing relationships when he joined Ignition, and ticked those off once he got going. Exceptions included AppFog, which was a new relationship, and Cloudera, a big deal that he called an “upside surprise” for Ignition.

When they do come, Artale says the deals he’s involved in for 2012 might be earlier in the lifespan of startups, depending on which fund the money is drawn from. “Ignition IV is an older fund,” Artale says, which means his deals were trending toward Series B or later in some cases last year. “We’ll start investing out a of a new fund sometime in 2012, and I’ll probably favor more early (deals) at that time.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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  • Aditya

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