Market Milestone – Looker Raises $103 million E Round to Expand the Looker Data Platform

On December 6, 2018, Looker announced that it closed a $103 million E round led by Premji Invest, a private equity firm owned by Wipro chairman Azim Premji. This round also includes new funds from Cross Creek Advisors, a venture capital firm focused on late-stage investments with current investments including tech darlings such as Anaplan, Datastax, Docker, DocuSign, Pluralsight, and Sumo Logic. This round also included participation from current investors from prior rounds (such as Looker’s Series D covered by Amalgam Insights).

This round is expected to be a final round before a potential Initial Public Offering. Of course, in recent times, plans for IPO from hot companies have been interrupted at the last moment, such as with Workday’s $1.55 billion acquisition of Adaptive Insights (see Amalgam Insights’ coverage for more information) and SAP’s $8 billion acquisition of Qualtrics. A Looker IPO may not be guaranteed, but Amalgam Insights would expect that the valuation of Looker is likely not going to be affected whether the company ends up going public or being acquired for strategic reasons.

Why is Looker worth $1.6 billion?

With this funding, Looker crosses into “unicorn” territory with a valuation of approximately $1.6 billion. This valuation is based on Looker’s run-rate of over $100 million in annual revenue supported by an employee base that is approaching 600, year-over-year growth exceeding 70%, and expansion into Tokyo to support the Asia-Pacific region.

Amalgam Insights believes that this valuation reflects several key trends and intelligent strategic decisions made by Looker in supporting enterprise-grade business intelligence and data supply chain needs.

First, Looker was developed to support a variety of data preparation, cataloging, governance, querying, and presentation capabilities at scale across a wide variety of data sources and formats. This approach reflects Looker’s purpose of being a data platform built for a new generation of data analysts based on the volume and variety of challenges that drive current analytic challenges.

Taking a step back, I remember when I first ran into Looker on the trade show circuit. I was looking at a variety of BI solutions in 2013, including the likes of Tableau, Qlik, and Microstrategy, when I ran into a small booth manned by a guy named Keenan Rice, who currently serves as Looker’s VP of Strategic Alliances. As a jaded analyst, I asked how his solution was different from the 30+ other solutions that were being shown on that show floor. At the time, everyone was bragging about their pixel-perfect visualizations, report building capabilities, and basic data presentation that were interesting to see, but rarely provided significant value, competitive differentiation, or Return on Investment.

However, Keenan’s pitch differed substantially. Although Looker also provided visualizations for large data tables, Keenan started by talking about data analyst challenges in preparing data for self-service analytics, using Looker’s SQL-based LookML as a modelling layer to access a variety of data, bringing new data into existing data and analytic workflows, and delivering it all as Software-as-a-Service. As a former data analyst, this was all music to my ears, but I wondered if Looker would be able to stand out as a solution against all of the dashboarding solutions, report builders, and the massive marketing budgets of incumbent BI vendors. Looker was just starting as a company and had just announced its Series A, so it faced significant odds in standing out based on the $10 million to $40 million range of Series A or Series B funding that a company like Looker would typically get at this point.

But it has been a pleasure both to seek Looker grow over the years and to lead a new generation of solutions focused on simplifying data supply chains and pipelines. It ends up that Looker was just early enough to avoid having comparable competition while solving a market need that businesses understood, especially those companies seeking a new generation of BI-based capabilities and wanting to develop a more data-driven organization. So, that’s a long way of saying that Looker took a big and laborious bet against the grain six years ago and has been rewarded for having a combination of good product and good timing.

But this isn’t the only reason that Looker has been successful.

As Looker has achieved market fit and success, the solution has evolved from a data workflow solution into an emerging application development solution that allows analysts and developers to work collaboratively in building secure and embeddable data models. By truly building Looker as a platform rather than simply calling it a platform as an aspirational goal based on a set of APIs, Amalgam Insights expects that Looker will become increasingly valuable for data analysts and the “citizen” developers who seek to increase appropriate access to enterprise data and analytic outputs.

And Looker has now taken an important step forward in providing department-specific apps in the most recent Looker 6 launch. Starting with digital marketing and web analytics, Looker is now taking advantage of its analytics capabilities to provide out-of-the-box support to help enterprises with key challenges rather than forcing clients to build foundational analytics that have been built over and over. Both these apps and Looker’s development focus build on top of Looker’s prior focus on Looker Blocks first launched in 2015, which were a collection of SQL, visualizations, and pre-built analytic models designed to accelerate analytic projects.

So, what is next for Looker? IPO? Global domination? 

All kidding aside, with expansion into AsiaPac to accompany Looker’s existing European offices in London and Dublin and Looker’s current 70% growth rate, it is possible that Looker could increase net-new revenues in 2019 faster than BI stalwarts such as Information Builders and Qlik. From a financial perspective, Amalgam Insights notes that Looker’s growth mirrors that of Alteryx, which has roughly quadrupled its stock price since its March 2017 IPO which was based on Alteryx’ 2016 revenue of roughly $86 million with 59% year-over-year growth.

Looker has stated that it believes that this Series E round should be its last funding round before IPO and, given recent market valuations for successful software companies, there should be no reason to expect otherwise from Looker. Looker’s progress both as a software development platform as well as a platform of pre-built applications and services bodes well for Looker as it continues to evolve as an enterprise platform focused on expanding access to data insights.

Finally, Amalgam Insights believes that Looker’s success will lead to continued success with other data and analytics companies focusing on rapid data modelling, data mapping, and analysis of multiple data sources. Looker’s agile BI approach that avoids the challenges of traditional BI and ETL solutions in supporting multiple data sources has become a new standard for accelerating the value of data. This both means that traditional BI companies will need to accelerate their own data pipeline efforts or to partner with other vendors and that Looker will start to be targeted in the same way that the likes of Tableau, Qlik, and Microstrategy have in the past. The price of success is increased competition and innovation, which is good news for the BI, data, and analytics markets and should provide Looker with enough challenges to avoid resting on its laurels.

Data Science and Machine Learning News, November 2018

On a monthly basis, I will be rounding up key news associated with the Data Science Platforms space for Amalgam Insights. Companies covered will include: Alteryx, Amazon, Anaconda, Cambridge Semantics, Cloudera, Databricks, Dataiku, DataRobot, Datawatch, DominoElastic, H2O.ai, IBM, Immuta, Informatica, KNIME, MathWorks, Microsoft, Oracle, Paxata, RapidMiner, SAP, SAS, SnapLogic, Tableau, Talend, Teradata, TIBCO, Trifacta, TROVE.

Continue reading “Data Science and Machine Learning News, November 2018”

Red Hat Hybrid Cloud Management Gets Financial with Cloud Cost Management

Key Stakeholders: CIO, CFO, Accounting Directors and Managers, Procurement Directors and Managers, Telecom Expense Personnel, IT Asset Management Personnel, Cloud Service Managers, Enterprise Architects Why It Matters: As enterprise cloud infrastructure continues to grown 30-40% per year and containerization becomes a top enterprise concern, IT must have tools and a strategy for managing the cost…

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Observations on the Future of Red Hat from Red Hat Analyst Day

On November 8th, 2018, Amalgam Insights analysts Tom Petrocelli and Hyoun Park attended the Red Hat Analyst Day in Boston, MA. We had the opportunity to visit Red Hat’s Boston office in the rapidly-growing Innovation District, which has become a key tech center for enterprise technology companies. In attending this event, my goal was to learn more about the Red Hat culture that is being acquired as well as to see how Red Hat was taking on the challenges of multi-cloud management.

Throughout Red Hat’s presentations throughout the day, there was a constant theme of effective cross-selling, growing deal sizes including a record 73 deals of over $1 million in the last quarter, over 600 accounts with over $1 million in business in the last year, and increased wallet share year-over-year for top clients with 24 out of 25 of the largest clients increasing spend by an average of 15%. The current health of Red Hat is undeniable, regardless of the foibles of the public market. And the consistency of Red Hat’s focus on Open Source was undeniable across infrastructure, integration, application development, IT automation, IT optimization, and partner solutions, which demonstrated how synchronized and focused the entire Red Hat executive team presenters were, including

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Torchbearer Case Study: OceanX Delivers the Consumer Subscription Experience with Oracle Cloud Infrastructure

(Note: Torchbearer Case Studies provide enterprises with a strong example of the “Art of the Possible” in using technology to enhance their business environment. Amalgam Insights provides emerging best practices based on the experience of the Torchbearer to inspire and educate Early Adopter and Early Majority buyers seeking to develop a strategic advantage.)

At Oracle Open World, I was interested in learning more about the Oracle Cloud and its role in data and analytics. Although Oracle has admittedly been relatively late to the enterprise cloud, the Oracle Cloud was front and center throughout Oracle Open World and it was interesting to see how Oracle was able to bring up enterprise technology deployments across its portfolio. One example of enterprise success in working with the Oracle Cloud that stood out was from OceanX.

At Oracle Open World, OceanX won the 2018 Oracle Innovation Award for Data Management. OceanX is a spinoff of Guthy-Renker started in 2016 to provide an integrated subscription commerce platform which brings together e-commerce, fulfilment, customer service, and business analytics associated with direct-to-consumer subscription programs. This allows consumer brands to provide personalized and bespoke products in their subscription offerings and to build consumer relationships based on a holistic view of the customer’s preferences, purchases, and interactions.

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Containers Continue on Track for 2019: 3 Key Trends For the Maturing Container Ecosystem

Tom Petrocelli, Amalgam Insights Research Fellow

The past few years have been exciting ones for containers. All types of tools are available and a defined deployment pipeline has begun to emerge. Kubernetes and Docker have come to dominate the core technology. That, in turn, has brought the type of stability that allows for wide-scale deployments. The container ecosystem has exploded with lots of new software components that help maintain, manage, and operate container networks. Capabilities such as logging, load balancing, networking, and security that were previously the domain of system-wide software and appliances are now being brought into the individual application as components in the container cluster.

Open Source has played a big part in this process. The Cloud Native Computing Foundation, or CNCF, has projects for all things container. More are added every day. That is in addition to the many other open source projects that support container architectures. The ecosystem just keeps growing.

Where do we go from here, at least through 2019?

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Artificial Intelligence/Machine Learning (AI/ML) and Learning Systems in the Brain

Simulating Learning Processes in the Brain With AI/ML

Key Stakeholders: Chief Learning Officers, Chief Human Resource Officers, Learning and Development Directors and Managers, Corporate Trainers, Content and Learning Product Managers.

Why It Matters: The skills necessary for success in the corporate world are varied and include hard skills, people skills and situational awareness. While L&D is embracing the use of AI/ML to analyze learners’ data and to personalize learning paths, curate effective content, and attempt to better engage learners, what L&D has failed to embrace is the application of AI/ML to model each of these distinct learning systems, and their interactions.

Top Takeaway: Corporate learning vendors would be well served to develop AI/ML models that capture the processing characteristics of the three learning systems in the brain known to mediate hard skills, soft skills, and situational awareness learning. A comprehensive AI/ML model that captured the processing characteristics of each of these three distinct learning systems could be used to develop and test products and tools that optimize content curation, learning paths, engagement, and delivery processes that will differ substantially across systems and tasks to be learned.

Vendors with the Skillset and Expertise to Build this AI/ML Tool: Cornerstone, CrossKnowledge, IBM, Infor, LTG, Oracle, Saba, Salesforce, SAP, Workday, and likely many others.

Artificial Intelligence/Machine Learning and L&D

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The Scientific Case for Augmenting Learning Management Systems with Percipio Experience Services

Leveraging Brain Science to Build a Modern Learning Ecosystem

Key Stakeholders: Chief Learning Officers, Chief Human Resource Officers, Learning and Development Directors and Managers, Corporate Trainers, Content and Learning Product Managers.

Why It Matters: Many companies today aim to deliver a more modern learning experience to their employees, but they’ve already invested heavily in a Learning Management System (LMS) or other tools that may lack some of the learner engagement and content curation features that can be found in emerging Learning Experience Platforms. They need a hybrid solution that provides services associated with a modern Learning Experience Platform that can be integrated with their existing LMS.

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Autumnal Tech Advice from Amalgam Insights

Amalgam Insights has been busy the past month in exploring a variety of trends across IT subscriptions, DevOps, Brain Science, and Data Science. In case you’ve missed it, check out our seasonal newsletter and get educated on the key trends that are augmenting our use of technology including:

  • For IT budget and spend management, traditional asset and spend management approaches are falling short
  • Artificial Intelligence (AI) is being treated as a ubiquitous technology
  • Open Source is now a foundation for enterprise IT
  • Learning and Development suffers from the challenge of taking on cognitive bias.

Catch up with Amalgam Insights’ analysts at work this Fall and find out how to:

And to subscribe to our newsletter, please sign up here.

Is IBM’s Acquisition of Red Hat the Biggest Acquihire of All Time?

Estimated Reading Time: 11 minutes

Internally, Amalgam Insights has been discussing why IBM chose to acquire Red Hat for $34 billion dollars fairly intensely. Our key questions included:

  • Why would IBM purchase Red Hat when they’re already partners?
  • Why purchase Red Hat when the code is Open Source?
  • Why did IBM offer a whopping $34 billion, $20 billion more than IBM currently has on hand?

As a starting point, we posit that IBM’s biggest challenge is not an inability to understand its business challenges, but a fundamental consulting mindset that starts with the top on down. By this, we mean that IBM is great at identifying and finding solutions on a project-specific basis. For instance, SoftLayer, Weather Company, Bluewolf, and Promontory Financial are all relatively recent acquisitions that made sense and were mostly applauded at the time. But even as IBM makes smart investments, IBM has either forgotten or not learned the modern rules for how to launch, develop, and maintain software businesses. At a time when software is eating everything, this is a fundamental problem that IBM needs to solve.

The real question for IBM is whether IBM can manage itself as a modern software company.

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