With Devices Everywhere, CloudOne Rises as Private Cloud Service

Companies in almost every industry are targeting the market for “connected” devices, from doorbells and thermostats sold by Nest Labs to something as advanced as automobile hardware and software that monitors your driving habits.

One Indiana-based company has steadily been building an infrastructure service that it hopes will help that market grow. CloudOne, located just northeast of Indianapolis in the city of Fishers, IN, offers large corporations the ability to develop applications used for tracking and analyzing data collected from connected devices, while storing and managing everything in a private cloud.

Even as CloudOne has steadily grown—it reported that its revenues doubled in 2015 over the previous year, and its annual run rate is $14 million—the company is facing a world where deriving data and analyzing it is becoming increasingly prevalent. And more businesses are hiring data scientists internally to do so. CEO and co-founder John McDonald is unperturbed, touting CloudOne’s role as being the operating and storage system for any business that is looking to gain insight from data.

“We’ll build it, we’ll help design it, but really what we want to do is run it,” McDonald said in April.

CloudOne has gained the validation of venture capital investors, who have pumped $21.9 million into the company since its founding in 2010. It received a $9 million Series E round last month from Ann Arbor, MI-based Plymouth Ventures and Palo Alto, CA-based Hercules Capital to spend on product development and new hires. The company’s previous investors, including California-based Bootstrap Venture Fund and Indianapolis firms Chatham Ventures and Elevate Ventures, also participated.

The company’s customer list includes McDonald’s, Costco, Whirlpool, and Ford. When CloudOne is developing a cloud environment for a customer, it uses enterprise-class software made by companies such as IBM, SAS Institute, Tableau, and others, McDonald says.

CloudOne customizes the application to customers’ security and privacy needs, he says. If they’re tracking healthcare information, the software may need to be HIPAA-compliant; or a German company may want its service hosted in German data centers, for example.

While CloudOne previously ran its operations out of a single data center it owned, the company now buys space from infrastructure-as-a-service data center providers from around the world, McDonald says.

Once it builds an environment for a client, CloudOne helps it collect and analyze the data that is sent to the system from connected devices. This could be for something as simple as engineers collaborating on software they’re developing for an automobile’s “infotainment” system, or something more complicated, like a system that helps the manager of a fleet of vehicles track and schedule maintenance on those vehicles.

“We build hybrid, private clouds that give them the same benefits of the public cloud: ease, scalability, global connectivity, elastic pricing and cost, but we do it in a private context with enterprise-class tools,” McDonald says. “

CloudOne charges based on usage—tracking how many peak and current users its clients have on its system—as well as for data collection and analytics. On a mid-April day in the middle of the morning, the company had almost 12,000 individual users logged into its system. CloudOne also charges based on how much data storage a company requires.

CloudOne has ties to a division of IBM called Rational Software, a once-independent company in the Boston area that the Armonk, NY-based computing giant acquired in 2003 for $2.1 billion. McDonald worked for IBM’s Rational Software division before two software engineers, Vishal Kapashi and Paul Young, approached him with the idea of using the product in a cloud environment, something previously not done.

The company first came to fruition after the founders were able to build an operating system that allowed clients to operate in an independent system—at the time, something called “island” architecture—now known as a virtual private cloud, McDonald says.

While collection and basic analysis of data is increasingly common today, McDonald believes that more companies will look to CloudOne for its services as companies start demanding next-generation Internet-of-things projects. That could include something like insights derived from lots of connected devices, he says.

Cummins, an engine maker based in Indiana and a CloudOne customer, is a good illustration of the next-generation uses for connected devices, McDonald says. CloudOne developed a piece of software that can alert a customer of Cummins—such as the manager of a fleet of trucks with Cummins engines in them—if something like a check engine light comes on. The software can not only help the manager find a nearby Cummins repair facility, it can also preorder any parts needed for the repair so the products are waiting at the shop, McDonald says.

“Companies are recognizing that they make a device and they have no idea how to collect and analyze data from the device. It’s not a skill that they currently, normally have,” he says. “They’re inviting companies like ours to come in and help them.”

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley

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