Skyhigh Networks’ mission is to help IT securely enable the cloud services that drive productivity and innovation in their business.
Rajiv Gupta first thought of the concept behind the cloud decades ago. In 1990, after getting his Ph.D. from Caltech, he began working for HP Labs. He launched a project called client-utility computing, through which he realized that clients wanted storage and applications available as a utility – easily retrievable from “the wall”. This idea stuck with him for 20 years.
In 2007, after having previously started two businesses, he was employed as a Vice President/General Manager at Cisco Systems. Feeling the entrepreneurial itch again, he began working on a new venture with some colleagues — Sekhar Sarukkai, a co-founder of his previous startups; Kaushik Narayan, a co-worker at Cisco; and some other members of his team at Cisco.
The group members generated five “breakthrough“ ideas involving storage, mobile services, and services management, among other areas. They then conducted market research by visiting IT executives at 140 companies and asking them what emerging problems they most wanted addressed. The respondents most commonly mentioned storage, including its cost and security.
Gupta led the team members to carry out in-depth research on the storage market to determine its opportunity. They found that the big emerging trend was use of the cloud, which had an adoption rate of 25% — about the same as for mobile. Remembering his thoughts about storage at HP Labs, Gupta decided that this was the area to focus on. The team set about developing a cloud solution.
The solution was a service that helped companies protect their data in the face of rising cloud use among employees. Specifically, it would enable them to identify which cloud services their workers were using and what the risks associated with the services were. Over the next several months, the group members created various iterations of the software, obtaining feedback from IT executives.
In 2011, armed with a strong offering, Gupta and his colleagues left Cisco to found a company for their service, called Skyhigh Networks. He obtained funding over the next two years from Greylock Partners (an investor for his previous startups) and Sequoia Capital. Skyhigh now offers additional services beyond the initial one, including detection of malware and encryption of cloud data.
Business model of Skyhigh Networks
Skyhigh has a niche market business model, with a specialized customer segment. The company targets its offerings at firms using cloud services that want enhanced security.
Skyhigh offers four primary value propositions: innovation, risk reduction, convenience, and brand/status.
The company places a strong emphasis on innovation. It pioneered the cloud access security broker (CASB) market, which directly addresses the security, governance, and compliance challenges posed to firms transitioning to the cloud. It maintains Skyhigh Cloud Security Labs (CSL), a program focused on combatting new threats from the cloud and speeding up its adoption. Specific CSL initiatives include the following:
- Cloud Threat Intelligence – CSL studies activity across its user base to identify usage patterns that compromise corporate information security. It creates behavioral models based on this information.
- Cloud Service Intelligence – CSL studies cloud services in real-time in order to provide clients with a comprehensive view of available offerings, and regularly audits them for new vulnerabilities.
- Cryptography Research and Development – CSL works with the Skyhigh Cryptography Advisory Board, a group consisting of five top cryptography academics from Georgia Tech, University of London, Cornell Tech, and University of California, San Diego. The team collaborates on groundbreaking research in order to identify and deploy cryptographic solutions for the cloud security market. It has developed and marketed cloud cryptography innovations such as, order-preserving encryption, searchable symmetric encryption, and format-preserving encryption.
The company reduces risk by being thorough. While most security offerings analyze only 30-90 days of cloud usage data, Skyhigh analzyes 12 months of data, enabling it to identify more usage trends and threats. Every day it analyzes over two billion events per customer.
The company creates convenience through ease of implementation. Its solution is cloud-based, requiring no hardware or software implementation. Also, it integrates with clients‘ existing firewalls/proxies, endpoint agents, and SIEMS, making them cloud-aware. This deployment approach avoids infrastructure changes, reducing friction and costs for customers.
The company has established a strong brand as a result of its success. It bills itself as the leading cloud access security broker, used by over 27 million people at over 600 enterprises worldwide. They represent 40% of the Fortune 100 and 25% of the Fortune 500, with clients such as Aetna, Western Union, Sony, and Viacom. Lastly, it has won many honors, including recognition as one of Gartner’s “Cool Vendors“, a “Most Innovative Companies Award“ (RSA), and a Sinet 16 Innovator Award.
Skyhigh’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, and participation in summits and conferences.
Skyhigh’s customer relationship is primarily of a self-service nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features a “Resources” section that includes reports, case studies, “cheat sheets”, data sheets, videos, Slideshares, webcasts, and templates.
The site also features “Cloud Security University“, a section designed to provide IT security professionals with education on cloud computing, including best practices and the controls needed for secure cloud usage. It offers detailed articles and research. There is also a personal assistance component in the form of phone and e-mail support.
Skyhigh’s business model entails maintaining a robust software platform for its clients.
Skyhigh maintains the following types of partnerships:
- Cloud Service Partners – The company maintains a cloud registry that identifies thousands of cloud services that customers can use. It invites cloud service providers to add themselves to the database.
- Resellers and Distributors – The company expands its reach by working with resellers and distributors who promote and sell its services to their customers. It invites firms with industry expertise and/or strong geographic coverage to contact it about opportunities.
- Technology Partners – The company works with firms (particularly cloud service firms) that have complementary technology to develop joint solutions that can benefit its customers.
Skyhigh’s main resource is its proprietary software platform, which serves over 600 enterprises worldwide.
The company depends on human resources in the form of technology employees to maintain and update the platform as well as sales staff to sell it.
Lastly, as a new startup it has relied heavily on funding from outside parties, raising $66.5 million from four investors as of June 2014.
Skyhigh has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing, a fixed cost.
Other major drivers are in the areas of customer support/operations and administration, both fixed costs.
Skyhigh has one revenue streams: the subscription fees it charges for access to its cloud-based software platform. Sales staff must be contacted directly for pricing quotes.