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Open-source growth and venture capital investment: Data, databases, challenges, and opportunities

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Open source software is a lot of things to a lot of people. For some people — engineers, mostly — it’s a way to work on their passion, be involved in a community, and give something back to the world. For others — business people, mostly — it’s a way to grow projects organically and sell software without actually investing too much in sales.

It’s a nuanced topic, and we’ve tried to explore it from many angles. From the business angle, we’ve explored open source vendors relationships with hyperscalers, mostly Google and Amazon. From the contributor and license engineering angle, we’ve explored different models for commercial open source projects. And from the community angle, we’ve explored metrics for community health and value generation evaluation.

Today, we explore open source software (OSS) and its commercialization from yet another angle: the investment angle. There are a couple of venture capitals out there that seem to be ahead of the curve in terms of their understanding of, and investment in, commercial open source companies. Runa Capital is one of them, and we caught up with Konstantin Vinogradov, Runa Capital Principal, who shared his views, findings, and outlook for commercial OSS.

Investing in open source software

Runa Capital was established in 2010, and it supports founders who are building disrupting companies across three areas: B2B SaaS, deep tech (middleware, open source platforms, machine learning, and cloud infrastructure), and software for regulated industries (fintech, edutech, and digital health).

Runa Capital has a few investments under its belt, including some iconic OSS companies such as Nginx — one of the two most popular web servers — and MariaDB, a fast-growing SQL database. Runa’s founders were involved in startups themselves, and Vinogradov described the people at Runa as tech-savvy — most of them have backgrounds in software engineering and science. This, Vinogradov said, has led Runa to invest in open source companies from Day One, before it became mainstream:

“The common perception on the market was, well, how to make money off of something which is totally free and could be easily copied and so on. That has changed. Now the market understands how open source works. And open source companies can get quite high prices”.

runa-logo.jpg

Runa Capital is a tech-savvy venture capital that’s been investing in open source companies since Day One.

Vinogradov identified 2017 as the time when the tide shifted, and he believes there are a few reasons for that. It comes down to people caring more about decentralization, cost efficiency, and customization, which are all things OSS provides. He also identified what is now an obvious advantage of OSS: the fact that OSS projects that see adoption effectively sell themselves in a bottom-up fashion, bypassing costly and lengthy top-down sales to some extent.

Vinogradov also elaborated on the data sovereignty aspect, claiming it’s a key driver for OSS adoption. We pointed out that while this seems to hold at first blush, transitioning from the pure-play open source version to the enterprise edition typically means transitioning to a SaaS approach, too. So, perhaps that argument does not hold?

Vinogradov thinks that a hybrid strategy, in which data never leaves the perimeter of the customer, is also viable. The idea is that the software works like SaaS, but it never has access to customer data. That was something of a novelty to us, and we were not sure how that would work, but Vinogradov pointed to a company in Runa’s portfolio called Forrest Admin as an example.

The ROSS index

That’s all fine and well, but the truth is, we approached Runa Capital and Vinogradov for something specific: the ROSS (Runa OSS) Index. Runa considers an active developer community to be instrumental for open-source businesses. The people at Runa look for promising companies with a fast-growing army of fans, and keep track of them at Github as part of their investment plans.

Initially, Vinogradov said, they were doing this internally only, for their own purposes. However, after a wave of interest from developers and investors alike, Runa decided to open-source their findings as an index. The ROSS index highlights the top-20 open-source startups by annualized growth rate (AGR) of Github stars at their repositories.

As anyone who has played a bit with OSS-related metrics knows, this is not a perfect proxy for growth, or for value. The people at Runa know this very well, and they also use more elaborate metrics internally. While Github stars are not a perfect metric for community evaluation for a number of reasons, they let Runa understand which OSS products were on top of developers’ mind every quarter.

Runa collects data on Github repositories with 1,000+ stars and compares their metrics at the beginning and the end of every quarter. Afterwards, all repositories are manually filtered to only include startups. For purposes of the ROSS index, Runa defines startups as product-focused commercial organizations, with a product that has a meaningful connection with an open-source repository.

The organization also has to have been founded less than 10 years ago, raised less than $100M in total known funding, and must not have been acquired or gone public before the end of the target quarter. The ROSS index uses only public data from Github, Crunchbase, mass media, and other sources.

Hot open source startups to keep an eye on in 2021 — in databases and beyond

The July 2021 update of the ROSS index was just released, and we asked Vinogradov to highlight some of his favorite startups in it. Starting at the top, there is NocoDB, a no-code database tool alternative to Airtable. Then we have Jina AI, a neural search ecosystem for businesses and developers.

In terms of databases and data-related platforms, which are of particular interest to us, this ROSS index also includes QuestDB, a time-series database, Supabase, a framework for RESTful APIs for PostgreSQL, Airbyte, a data integration platform, and Prisma, a GraphQL layer which we have covered previously.

Vinogradov mentioned he believes in specialized indexes as well, so very soon Runa will launch their first index for open source databases, where they are compared by active contributors, new contributors, and other meaningful metrics — not only by stars. Elaborating a bit on different metrics and insights that can be derived based on these indexes was interesting.

stock-vector-vector-illustration-of-open-source-conceptual-symbols-136703885.jpg

Open source software is a lot of things to a lot of people. It’s a nuanced topic, and worth exploring from many angles.

The top database in the world right now, based on new contributors in the past 12 months, would be Clickhouse, Vinogradov said. In terms of total number of contributors, Spark SQL and Elasticsearch rank at the top. Speaking of databases and other products in the broader area of data management and machine learning, we wondered what Vinogradov’s view is on the multitude of options that currently exist.

Could it be that there is a tad too much choice? Does he see consolidation happening? Vinogradov is of the “let 1,000 flowers bloom” opinion. The proliferation of so many different databases is because of the fact that there are so many different workloads, and it’s hard to have a one-size-fits-all solution, according to Vinogradov. While leaders in specific database categories will exist, we should not expect to see any new Oracles emerging.

As far as funding goes, Vinogradov noted that it definitely helps, especially when talking about enterprise offerings. There are some examples of successful companies who have raised very little capital, but, according to Vinogradov, those are built mostly around consumer-oriented software offerings. If you want to sell to enterprises, a healthy amount of funding seems to be required.

Either way, the ROSS index is a valuable source of information for fast-growing OSS startups, and Vinogradov’s views offer interesting insights from the investment point of view. We look forward to Runa Capital’s special index on OSS databases, and we’ll keep an eye on the ROSS index as it gets updated on a quarterly basis.

Open Source

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Source: https://www.zdnet.com/article/open-source-growth-and-venture-capital-investment-data-databases-challenges-and-opportunities/#ftag=RSSbaffb68

ZDNET

Microsoft: Zero Trust security just hit the mainstream

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Zero Trust, the borderless security strategy being pushed by vendors, has fully caught on in the enterprise, according to Microsoft’s latest survey of cybersecurity defenders. 

Microsoft, IBM, Google, AWS, Cisco and others in the cybersecurity industry have been banging the ‘zero trust’ drum for the past few years. 

The case for zero trust was made clearer after this year’s software supply chain attacks on US tech firms, which came amid a mass shift to remote work that demonstrated the need to protect information inside and beyond a trusted environment in a world that spans BYOD, home networks, VPNs, cloud services and more.

As Microsoft has argued, part of zero trust is assuming the corporate network has already been breached, either by hackers targeting that network through phishing or malware, or via an employee’s compromised home device connecting to the network.

The message has gotten through to organizations. Microsoft’s survey of 1,200 security decision makers over the past year found that 96% of consider Zero Trust to be critical to their organization. 

Zero trust will also soon be compulsory for federal agencies, helping standardize the concept in the broader market. US president Joe Biden’s cybersecurity executive order in May mandated agencies move to zero-trust as-a-service architectures and enable two-factor authentication (2FA) within 180 days. 

The Commerce Department’s NIST followed up last week by calling on 18 of the US’s biggest cybersecurity vendors to demonstrate how they would implement a zero trust architecture.    

Microsoft found that 76 percent or organizations are in the process of implementing a Zero Trust architecture — up six percent from last year.

“The shift to hybrid work, accelerated by COVID-19, is also driving the move towards broader adoption of Zero Trust with 81 percent of organizations having already begun the move toward a hybrid workplace,” writes Vasu Jakkal, Microsoft corporate vice president of security, compliance and identity.

“Zero Trust will be critical to help maintain security amid the IT complexity that comes with hybrid work.”

The top reasons for adopting Zero Trust included increased security and compliance agility, speed of threat detection and remediation, and simplicity and availability of security analytics, according to Jakkal. 

It’s all about confirming everything is secure, across identity, endpoints, the network, and other resources using signals and data.

Biden this week highlighted the real-world stakes at play with recent ransomware and supply chain attacks on critical infrastructure, telling the US intelligence community that a major hack would likely be the reason the US enters “a real shooting war with a major power”. The US president yesterday signed a memorandum addressing cybersecurity for critical infrastructure, ordering CISA and NIST to create benchmarks for organizations managing critical infrastructure.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://www.zdnet.com/article/microsoft-zero-trust-security-just-hit-the-mainstream/#ftag=RSSbaffb68

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ZDNET

Microsoft: Zero Trust security just hit the mainstream

Published

on

Zero Trust, the borderless security strategy being pushed by vendors, has fully caught on in the enterprise, according to Microsoft’s latest survey of cybersecurity defenders. 

Microsoft, IBM, Google, AWS, Cisco and others in the cybersecurity industry have been banging the ‘zero trust’ drum for the past few years. 

The case for zero trust was made clearer after this year’s software supply chain attacks on US tech firms, which came amid a mass shift to remote work that demonstrated the need to protect information inside and beyond a trusted environment in a world that spans BYOD, home networks, VPNs, cloud services and more.

As Microsoft has argued, part of zero trust is assuming the corporate network has already been breached, either by hackers targeting that network through phishing or malware, or via an employee’s compromised home device connecting to the network.

The message has gotten through to organizations. Microsoft’s survey of 1,200 security decision makers over the past year found that 96% of consider Zero Trust to be critical to their organization. 

Zero trust will also soon be compulsory for federal agencies, helping standardize the concept in the broader market. US president Joe Biden’s cybersecurity executive order in May mandated agencies move to zero-trust as-a-service architectures and enable two-factor authentication (2FA) within 180 days. 

The Commerce Department’s NIST followed up last week by calling on 18 of the US’s biggest cybersecurity vendors to demonstrate how they would implement a zero trust architecture.    

Microsoft found that 76 percent or organizations are in the process of implementing a Zero Trust architecture — up six percent from last year.

“The shift to hybrid work, accelerated by COVID-19, is also driving the move towards broader adoption of Zero Trust with 81 percent of organizations having already begun the move toward a hybrid workplace,” writes Vasu Jakkal, Microsoft corporate vice president of security, compliance and identity.

“Zero Trust will be critical to help maintain security amid the IT complexity that comes with hybrid work.”

The top reasons for adopting Zero Trust included increased security and compliance agility, speed of threat detection and remediation, and simplicity and availability of security analytics, according to Jakkal. 

It’s all about confirming everything is secure, across identity, endpoints, the network, and other resources using signals and data.

Biden this week highlighted the real-world stakes at play with recent ransomware and supply chain attacks on critical infrastructure, telling the US intelligence community that a major hack would likely be the reason the US enters “a real shooting war with a major power”. The US president yesterday signed a memorandum addressing cybersecurity for critical infrastructure, ordering CISA and NIST to create benchmarks for organizations managing critical infrastructure.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://www.zdnet.com/article/microsoft-zero-trust-security-just-hit-the-mainstream/#ftag=RSSbaffb68

Continue Reading

ZDNET

Microsoft: Zero Trust security just hit the mainstream

Published

on

Zero Trust, the borderless security strategy being pushed by vendors, has fully caught on in the enterprise, according to Microsoft’s latest survey of cybersecurity defenders. 

Microsoft, IBM, Google, AWS, Cisco and others in the cybersecurity industry have been banging the ‘zero trust’ drum for the past few years. 

The case for zero trust was made clearer after this year’s software supply chain attacks on US tech firms, which came amid a mass shift to remote work that demonstrated the need to protect information inside and beyond a trusted environment in a world that spans BYOD, home networks, VPNs, cloud services and more.

As Microsoft has argued, part of zero trust is assuming the corporate network has already been breached, either by hackers targeting that network through phishing or malware, or via an employee’s compromised home device connecting to the network.

The message has gotten through to organizations. Microsoft’s survey of 1,200 security decision makers over the past year found that 96% of consider Zero Trust to be critical to their organization. 

Zero trust will also soon be compulsory for federal agencies, helping standardize the concept in the broader market. US president Joe Biden’s cybersecurity executive order in May mandated agencies move to zero-trust as-a-service architectures and enable two-factor authentication (2FA) within 180 days. 

The Commerce Department’s NIST followed up last week by calling on 18 of the US’s biggest cybersecurity vendors to demonstrate how they would implement a zero trust architecture.    

Microsoft found that 76 percent or organizations are in the process of implementing a Zero Trust architecture — up six percent from last year.

“The shift to hybrid work, accelerated by COVID-19, is also driving the move towards broader adoption of Zero Trust with 81 percent of organizations having already begun the move toward a hybrid workplace,” writes Vasu Jakkal, Microsoft corporate vice president of security, compliance and identity.

“Zero Trust will be critical to help maintain security amid the IT complexity that comes with hybrid work.”

The top reasons for adopting Zero Trust included increased security and compliance agility, speed of threat detection and remediation, and simplicity and availability of security analytics, according to Jakkal. 

It’s all about confirming everything is secure, across identity, endpoints, the network, and other resources using signals and data.

Biden this week highlighted the real-world stakes at play with recent ransomware and supply chain attacks on critical infrastructure, telling the US intelligence community that a major hack would likely be the reason the US enters “a real shooting war with a major power”. The US president yesterday signed a memorandum addressing cybersecurity for critical infrastructure, ordering CISA and NIST to create benchmarks for organizations managing critical infrastructure.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://www.zdnet.com/article/microsoft-zero-trust-security-just-hit-the-mainstream/#ftag=RSSbaffb68

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ZDNET

Apple broke bad news to iPhone fans

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We’ve known this was a problem.

I expected that if there was any time when Apple top brass would mention it, it would be during the earnings call.

And that’s when it happened.

Apple, like most other tech firms, is feeling the pinch due to component shortages.

A word that came up a lot during the call was “constraints.” It was up to Apple CFO Luca Maestri to break the bad news.

“… we expect supply constraints during the September quarter to be greater than what we experienced during the June quarter. The constraints will primarily impact iPhone and iPad.”

Must read: Don’t buy these Apple products: July 2021 edition

Normally, I’d put this down to scarcity marketing — “get in there quick with your iPhone orders, because otherwise you’ll miss out and the cool kids will laugh at you” sort of thing — but these supply constraints are real and is affecting almost every company that is involved in making things.

CEO Tim Cook went on to fill in some more details about the constraints.

“The majority of constraints we’re seeing are of the variety that I think others are saying that are I would classify as industry shortage. We do have some shortages, in addition to that, that are where the demand has been so great and so beyond our own expectation that it’s difficult to get the entire set of parts within the lead times that we try to get those. So it’s a little bit of that as well.”

A little bit of this, a little bit of that.

On the whole, Apple does like to underpromise and overdeliver, especially where Wall Street is concerned, so it doesn’t surprise me that there’s this air of caution.

It makes sense.

The landscape is changing rapidly.

But I think that it’s interesting and somewhat telling that Apple was willing to make such a statement, a statement that caused stocks to fall as a result.

This statement was not made lightly.

If you’re someone who likes getting a new iPhone as soon as they’re out, you might have to work a little harder this year.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://www.zdnet.com/article/apple-broke-bad-news-to-iphone-fans/#ftag=RSSbaffb68

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