Investors drawn to Skytap as it pursues significant but underserved segment of cloud market; Skytap’s total sales more than tripled year-over-year in Q2 2017
SEATTLE, Aug. 22, 2017 — Skytap, Inc., a global public cloud provider, today announced that it has closed $45 million in Series E funding. Goldman Sachs Private Capital Investing led the round, which also included participation from existing investors. The new funding comes during a period of rapid growth for Skytap, and will accelerate the company’s product development and market expansion. Skytap’s total sales more than tripled year-over-year (YoY) in Q2 2017, as Fortune 500 organizations in healthcare, retail, financial services, media and more adopt Skytap Cloud to modernize traditional enterprise applications.
Cloud computing underpins rapid delivery of goods and services through software, which is critical to success in today’s economy. Still, recent Gartner research found that, “Through 2017, 20.4% of most organizations’ IT budgets will be allocated for spending on cloud and cloud-related services.”1 While cloud services are growing rapidly, the majority of enterprise IT budgets remain locked in the datacenter. Enterprises need a better way to migrate and modernize those core business applications. Skytap Cloud is specifically designed to enable this transformation.
Forrester underscores the urgency of this shift with recent data that ranks “Migrate existing applications to the cloud” and “Evolve our application portfolio to promote agility and innovation” as the first and second priorities, respectively, for surveyed North American and European technology decision-makers when asked what actions their firm has taken, or will take, in regard to modernizing their existing business portfolio.2 However, traditional enterprise applications weren’t built for the cloud and can’t be easily migrated to take advantage of its capabilities. These mission-critical systems often have complex dependencies on physical infrastructure and on-premises resources. Meanwhile, standard clouds are designed for cloud-native development, not existing applications, leaving enterprises’ most important workloads trapped on-premises.
Skytap Cloud solves these challenges by enabling enterprises to migrate their core applications to the cloud unchanged. Once in Skytap Cloud, customers improve business agility by modernizing the technology and processes used to create and enhance their applications over time. These applications can then be evolved by combining new cloud services with traditional components to form hybrid applications that maximize existing investments, while accelerating innovation.
The investment is being led by the Goldman Sachs Private Capital Investing Group (“PCI”), which is Goldman Sachs’ investment platform dedicated to providing junior capital to growth and middle market companies throughout North America. As part of the investment, Hillel Moerman, Managing Director who co-heads PCI, will join Skytap’s Board of Directors and Matthew Dorr, a member of PCI, will join Skytap’s Board as an observer.
“Modernizing applications through cloud is fundamental to competing in the digital economy, but standard clouds can’t support the majority of applications at the heart of enterprises,” said Thor Culverhouse, CEO, Skytap. “Skytap Cloud lowers the barriers to modernizing these traditional applications by accelerating cloud migration to provide true scalability, self-service, and dynamic management. This, in turn, streamlines development and speeds innovation. Our unique approach sets us apart in the cloud and gives us the opportunity to enable greater cloud adoption for traditional enterprise applications.”
“We believe that Skytap is well-positioned to address the large and growing demand for helping enterprises modernize business-critical applications in order to harness the opportunity and full value of the public cloud,” said Moerman. “This untapped market is exciting, and we are pleased to support Skytap during this time of growth.”
Skytap Business Growth Accelerates
Skytap’s customer traction continues to deepen and expand. Existing customer upgrades grew 130 percent YoY in Q2 2017, while the company’s average revenue per customer grew 60 percent in the same period. Three of the company’s top five customers were obtained this year and nearly 60 percent of Skytap’s revenue now comes from large enterprises.
Skytap Cloud utilization has grown 10X in less than three years as the company expands its product capabilities to address the entire breadth of the software development lifecycle. Skytap Cloud is the only Infrastructure-as-a-Service (IaaS) provider that supports IBM’s AIX operating system, in addition to Windows and Linux. This unique integration provides the most direct path for enterprises to migrate legacy AIX applications to the cloud and modernize them in-line with business needs. Earlier this year, Skytap released Skytap Container Management, which enables IT organizations to develop, deploy, and run traditional enterprise and containerized applications together in Skytap Cloud.
Skytap is a global cloud provider that accelerates enterprise innovation by modernizing traditional applications with cloud-native development and services. Skytap Cloud makes it easy to build, run, and evolve these hybrid applications by rapidly migrating traditional workloads to the cloud, enabling modern development practices, and integrating new cloud architectures. We power multi- and hybrid-cloud strategies through secure connections to other clouds and on-premises datacenters. Our environments technology accelerates application development, simplifies management, and reduces IT costs, enabling hundreds of customers worldwide to modernize at the pace of their business.www.skytap.com