Cloud enterprise infrastructure company Midfin Systems of Redmond, Wash., landed on CNBC’s inaugural Upstart 25 list this week — on the same day, coincidentally, that a widespread Amazon Web Services outage illustrated the benefits of the hybrid computing approach that Midfin’s technology helps to enable.
CNBC describes the Upstart 25 as “a diverse group of companies building brands and breaking industry barriers on the path to becoming tomorrow’s household names.” Midfin Systems CEO Suyash Sinha tells Geekwire that he’s excited to have his company’s work recognized in such a high-profile way.
Midfin specializes in hybrid infrastructure that work across data centers and the cloud. The idea is to help companies run computing, storage and networking seamlessly across facilities including internal data centers and public cloud platforms such as Amazon Web Services and Microsoft Azure. Midfin offers hardware controllers for data centers, and its eFabric software stitches everything together.
This hybrid approach creates natural redundancy, which is one way for cloud users to hedge against the types of outages that struck AWS this week.
Sinha, a 14-year Microsoft veteran and former senior director who left the company in March of 2014 to co-found Midfin Systems, suggested that the AWS outage highlights the need for a blend of traditional data centers and a diverse range of cloud services from multiple suppliers (thus creating a hybrid infrastructure).
“In talking with customers, I think less than 10% of enterprise customers run 100% in the cloud. I believe the industry will mature to seek a unified cloud architecture across public cloud, near-premise colocations, on premise datacenters, remote branch offices and the edge locations,” said Sinha. “How ironic was the AWS outage … on the day we won this recognition? When you put all your eggs in one basket – you have that risk. Going hybrid is good risk mitigation.”
Sinha started the company in 2014 with Shuvabrata Ganguly, a former principal engineer on Amazon’s AWS EC2 team. Midfin has raised $4.7 million in funding, with customers in industries including healthcare, financial services and managed services, according to the CNBC report. Matt Bornstein, a principal based in Blumberg Capital’s San Francisco office, is on the Midfin Systems board.
As a privately held company, Midfin doesn’t disclose financial results publicly. However, Sinha said year-over-year revenue growth for the company’s hybrid-enabling software and hardware is “in the triple digits” and that it is still growing fast.
Sinha says his business philosophy is based on the idea that financing does not make a startup company successful. Instead, customer traction and financial results do. “In fact, being scrappy has its own rewards because you are more creative and focus on creating real value for customers,” he adds. “We have done very little marketing – our customers are often finding us by word of mouth.”
“We have been able to raise money when we needed to raise money. We are razor-focused on customers,” Sinha says. “We see inbounds from investors and VCs and we politely tell them we will be in touch when we need to raise the next round.”
Whatever you think of Sinha’s philosophy, the results at Midfin Systems were good enough to land the company in 13th place on the CNBC Upstart 25 list. Based on CNBC’s description of its methodology, it looks like Midfin Systems’ modest draw on investor dollars helped it qualify for the list.
To be eligible, CNBC said that companies had to be privately held and younger than 5 years old. Additional criteria required that companies be pre-Series B in their funding and that they have raised no more than $50 million. CNBC’s Upstart 25 Advisory Council — which CNBC says is “a group of 39 leading academics and analysts specializing in innovation and entrepreneurship” — ranked the criteria by which companies were judged.
It’s also clear that Midfin Systems is playing in a huge and fast-growing sector of the cloud market. According to research published last year by San Jose-based Global Industry Analysts, the hybrid cloud market will grow to $129.9 billion by 2022.
Sinha estimates the potential market for his company as being even larger than that. He also doesn’t appear to be under any illusions about the competitive challenges he faces, although he says that he doesn’t spend a whole lot of time thinking about them.
“We are a very small player in the half a trillion dollar infrastructure industry and we are focused on customers and our vision,” he said. “We had little time to think about competitors. But customers do compare us with VMWare’s Software-Defined Data Center.”
Midfin Systems could get plenty of competition from VMWare, Microsoft and Amazon as each of those companies works to help its large enterprise customers shift from traditional in-house IT infrastructure to a hybrid cloud future.
But Sinha says his company can be agile in a fast-changing environment. For example, expected changes to the regulatory environment for the financial services sector, along with the anticipated repealing and replacing of the Affordable Care Act, will undoubtedly offer advantages to companies that can move quickly to help their enterprise customers adapt.
“When customers choose us they can accomplish in days what used to take months, or even years for larger hybrid cloud infrastructures,” he said. “At the end of the day, intelligence is largely about adapting to change and making the best of it. We provide the tools that businesses can rely on to make it possible.”
