Why two influential tech tycoons have fallen in love with a startup called Turbonomic
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Bill Veghte, executive
chairman of Turbonomic
Bill
Veghte,
Tech veteran Bill Veghte, who's held executive positions at
Microsoft and HP and been the CEO of SurveyMonkey, just emerged
from his nearly year-long hiatus to announce his full-time
job as executive chairman of a startup called Turbonomic.
This was surprising news for a bunch of reasons. For one, it's
fairly unusual for a startup to hire an executive director from
outside the company as a full-time job unless it's part of a
bigger management shakeup. For another, Turbonomic has already
had a couple of big management shakeups and its ship appears to
be sailing well now.
Turbonomic turns the
$5 billion network management market on its head. It uses a
"supply and demand" model to automatically match an app with the
exact amount of computing and storage capacity it needs, changing
that capacity as the app's needs grow or shrink, with no human
intervention needed.
That's backwards from how this process typically works,
where IT folks sort of guess at how much capacity an app needs,
then use performance monitoring software to warn them when
they need to tweak things.
The company has had a number of management shaekups. Back
in 2013, boardmember and VC investor Ben Nye took over as
CEO on an interim basis. Then he stayed on permanently and tells
us he has no intention of leaving now.
Since Nye took over, Turbonomic has been
on a tear, Nye said. It's grown
from 62 employees to 420, he said,
and had 2015 revenue of $44.6 million, according
to the Inc. 500 list of fastest growing private companies.
Turbonomic currently has about 1,600 customers
and has had 25 consecutive quarters of growth, Nye
said.
Until about four months ago, Nye was both its CEO and a
managing partner at Bain Capital Ventures. He's still at
Bain as a VC but no longer managing the enterprise software
investment practice that he founded. In terms of salary and pay,
this was an expensive move, he jokes.
"I had to go back to partners at Bain and say, hey listen,
I think this is big idea and I think I need to go do this. They
were quite gracious. It was expensive economically. If anyone is
paying to go to work, believe me, I am," he jokes.
Digging in
But he wanted to dig in
to the
startup for two reasons. First, he felt an obligation to the
people he hired as interim CEO, many who came to work
with
Nye directly. Nye is a five-times Forbes Midas
List VC who's backed successful companies like LinkedIn,
DocuSign, SolarWinds, and Rapid7.
The second is the same reason that he convinced Veghte
to join. They are both blown away by the technology created
by founders Shmuel Kliger and Yuri
Rabover.
Bain Capital VC and
Turbonomic CEO Ben Nye
Bain
Capital
"When someone takes a space you know well and all of the sudden
they twist it and show it to you a new way, a little dopamine
goes off in your head and you think, oh my god, this is going to
be huge," Nye said.
"But these guys don’t know much about the financial side, or
marketing side, and then you say, ok, I can help them with this."
He believes Turbonomic is solving a real and urgent need
that can help companies save significant money. "The average
data center is more than 50% over-provisioned," says, meaning
that companies buy and run far more computers and storage
than they really need just to make sure their apps work
well.
For instance, one of the company's biggest clients now uses 775
terabytes fewer of memory and 2500 terabytes fewer of storage in
just in two data centers, just by automatically right-sizing its
apps, Nye says.
Turbonomic also works on clouds like
Amazon Web Services and Google.
In fact, this kind of automation is the big selling point
for Google's App Engine cloud. And Google's
automation tech came from a startup called Stackdrivers, a
company Nye backed and sold to Google.
Looking his children in the eye
As for Veghte joining the company, that's another signal
that Turbonomic is one to
watch.
Veghte has been in the tech industry for three
decades, cutting his teeth during the early years at Microsoft
building products like Windows and Office. Then he ran HP's
enterprise business and, as its COO, helped mastermind its split
into two companies. He was also briefly CEO at SurveyMonkey,
replacing one his friend Dave Goldberg after Goldberg's tragic
death.
But he quit the CEO job and went back to the
SurveyMonkey board early this year, citing a difference of
opinion on strategy.
He's spent the last few months traveling the world and checking
out everything from startups to VC roles, he told Business
Insider, and could have gone anywhere.
But, unlike his short-lived CEO role at SurveyMonkey, which
was competing in an unfamiliar market, Turbonomic's
tech is 100% in Veghte's wheelhouse. And Nye lobbied
hard to get him to join.
While at Microsoft, he helped to create System Center, the
monitoring software that Turbonomic now competes with.
Veghte says that this type of old-fashioned software
created "a freakin' hairball" out of today's
data centers. Turbonomic not only fixes, but
can help save the planet by allowing companies to use
less data center equipment — meaning less energy.
After taking time off, he realized he can't fix all the world's
problems, but he loves technology and knows how to do build
it.
"I can make the world a better place by building great
technologies that use a lot less carbon emissions, so I can look
my children in they eye," he says.
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