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Hybrid cloud, which refers to a mix of computing, storage, and services across on-premises, private cloud, and public cloud infrastructure, is seeing increased uptake as companies find value in combining local data operations with the flexibility of cloud technologies. Eighty-two percent of enterprises are now taking a hybrid cloud approach, according to a 2021 Flexera report. And 72% of companies responding to an Everest Group survey describe their cloud strategy as “hybrid-first” or “private-first.”
Indeed, according to Mordor Intelligence, the market for hybrid cloud infrastructure could be worth upwards of $128 billion by 2025. But managing this infrastructure isn’t easy. According to a recent IBM report, 58% of leaders consider the complexity of orchestrating hybrid and multicloud environments to be a leading challenge. Visibility, misconfigurations, and an overall gap in cloud management skills are of primary concern, as well as establishing identity and security baselines.
To address the challenges in managing hybrid cloud, startups including Alluxio and ManageIQ (which Red Hat acquired in 2012) have developed products aimed at automating and simplifying cloud-related IT infrastructure tasks. Virtana, another vendor, has taken a more unique approach, leveraging a combination of AI, machine learning, and data analytics to provide observability for managing app workloads across public, private, hybrid, and multi-cloud environments.
Applying AI to cloud management
Virtana, which today announced that it raised $73 million in venture capital, offers software that falls into the category of AIOps. Originally coined by Gartner in 2017, the term “AIOps” refers to big data, machine learning, and other analytics technologies that enhance IT operations — including monitoring, automation, and service desk — functions with real-time and historical insights.
Virtana’s platform hosts tools for capacity auditing, cost management, and performance assurance that are designed to help plan, execute, and manage hybrid cloud implementations. Through its platform, customers can perform workload migrations and cost optimization based on resources, requirements, and risk, “right-sizing” cloud their cloud environments on a continuous or one-time basis.
“The primary use cases for Virtana platform are to help companies plan smarter cloud migrations and, once deployed in hybrid cloud environments, to provide cloud cost management and governance. This enables enterprises to accelerate their digital transformation initiatives,” CEO and cofounder Kash Shaikh told VentureBeat via email. “The first use case enables businesses to make the best decisions about which on-premises workloads and applications to move to the cloud, how to group those moves, and when to move them, [while] the second use case is avoiding public cloud waste, which allows businesses to better understand their costs as they move toward a hybrid cloud infrastructure.”
Virtana claims that it can support up to thousands of apps and virtual machines across clouds, with modules that enable customers to discover and map assets while maintaining project tracking and reporting. The platform also breaks down multi-cloud costs and billings, revealing daily usage changes in cloud environments via alerts and visualizing costs across dimensions including services, months, and availability zones.
Cloud spend remains a top concern as enterprise infrastructure costs mount. Thirty-six percent businesses spend more than $12 million per year on public clouds, according to Flexera — and 90% expect cloud usage to exceed prior plans due to the COVID-19 pandemic. IT decision-makers peg the amount of wasted cloud spend at roughly 30%, owing to factors like errors in configurations and surges in demand.
“We leverage AIOps to support automation and insights, combining big data analytics and machine learning to automate many elements of IT operations processes, including costing [and] rightsizing, event correlation, anomaly detection, and causality determination,” Shaikh added. “The importance of AIOps is directly correlated to the complexity, growth, and volume of telemetry data across private, multi-cloud, and hybrid cloud estates. Mission-critical applications rely on infrastructure that is complex, multi-vendor, multi-generational, and dynamic — it can fail in unforeseen patterns. The AI-powered monitoring and analytics provided by Virtana give users deep visibility and timely insights into infrastructure health.”
Groundwork for growth
Virtana sees itself competing in an IT operations market that’s estimated to be worth more than $30 billion. It has rivals in Cloudtamer, a startup developing a cloud governance and management platform, as well as cloud management and compliance company Striim. Quail, Kubecost, 2nd Watch, and Cast AI are among the other players vying for a slice of the segment.
Despite the competition, Shaikh believes that Virtana is well-positioned for growth and expansion. The company currently has over 260 customers, including teams at Apple, Costco, Boeing, Hyundai, Geico, Dell EMC, and Nasdaq.
“C-suite level managers and IT departments have increasingly moved application workloads to the cloud but, once they have migrated them, it has become more difficult for them to manage those costs, which often typically can spiral out of control. Many IT managers do not have the experience required for complex analysis of those costs and often do not completely understand what is contributing to cost spikes or hidden costs and what to do about them. The Virtana platform enables users to understand those cloud costs, optimize cloud instances, identify unused cloud instances, and track reservation discounts to evaluate potential savings,” Shaikh said. “We announced 54% year-over-year sales growth in July 2021 and exceeded sales goals and 63% sales growth quarter over quarter in April 2021.”
Atalaya Capital Management, Elm Park Capital Management, HighBar Partners, and Benhamou Global Ventures participated in 150-employees Virtana’s latest financing round. With the new capital, the startup plans to grow its product development, sales, and marketing teams.
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