This is interesting. Cloudability, a startup that made its name monitoring customer usage and cost of Amazon Web Services, is buying DataHero, a data visualization specialist that aggregates and analyzes information about how customers use Salesforce.com, MailChimp, ZenDesk, Office 365 and other subscription software services.
Terms of the deal were not disclosed. Most, but not all, of DataHero’s staff will make the move and form the core of a new Cloudability office in San Francisco, where DataHero was based. However, DataHero founder Chris Neumann will not move, nor will the company’s current CFO or vice president of engineering, according to VentureBeat.
To date the two companies have focused on different market segments. Cloudability targeted the use of shared public cloud resources from Amazon (AMZN) and launched an analogous cloud monitoring service for Microsoft(MSFT) Azure last summer.
DataHero, on the other hand, concentrated on the use of popular subscription applications from “Software as a Service” vendors like Salesforce (CRM). While, Amazon cloud services are mostly consumed by technically proficient developers most SaaS products are used by business-oriented, but not usually geeky, consumers. But that divide is starting to come together and companies that use lots of different cloud products need to get a better handle on how well that money is being spent for both types of cloud services.
MORE: On legacy software company’s move into cloud services.
The crux of the issue is that while cloud usage starts out looking inexpensive—a great bargain—things can turn ugly pretty fast. Developers forget to turn off Amazon compute “instances” after the job is run. Companies pay for lots of users of SaaS products, but many of those people may not actually need them. That leads to the same old “shelfware” problem of past computing eras where companies are paying for resources that are not utilized.
In an emailed statement, Cloudability Chief Executive Mat Ellis said:
It’s clear cloud is becoming mainstream. It used to be that our power users were the people who signed the purchase order. We’re starting to see real sophistication among the front line users, which indicates that a much broader understanding of why the cloud is so powerful is developing. DataHero will allow anyone to import the business metrics they use into Cloudability without needing IT to help.
Cloudability has raised just under $16 million since its founding in 2011 and shares one investor, the Foundry Group, with DataHero, according to TechCrunch.
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Cloudability cites Goldman Sachs estimates that spending on cloud infrastructure and services will hit $43 billion by 2020 up from about $26 billion this year. Those projections vary widely, but it is clear that many companies, including some of the biggest Coins2Day 500 players, are putting more of their IT budget into buying cloud services from third-party vendors rather than building out more of their own internal data centers.
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And more of the money that had gone into big-bang enterprise licenses to run software in-house is now flowing into the sort of subscription services pioneered by Salesforce 15 years ago. For the past several years, Oracle (ORCL), Microsoft, IBM (IBM)—virtually all of the legacy software companies—have scrambled to adapt that delivery model, after initially pooh-poohing it.
Cloudability competes with companies like Cloudyn, which just took in $11 million in new funding last month. Newvem, another compeittor, was bought by Datapipe in 2013. DataHero competes with Tableau, DOMO, and JasperSoft as well as tools from bigger, broader companies like Salesforce’s WAVE.
So what will a combined Cloudabilty/DataHero do for customers?
DataHero “makes it much easier for users to easily grab things like conversion count from Google (GOOG) Analytics, trial user signups from HubSpot, revenue numbers from Zuora, etc.,” Ellis said via email.
That’s the sort of data that business users need in their reports so they can assess such minor things as cost and gross profit per customer. “An integration between DataHero and Cloudability will make this muh easier for users, very quickly,” he said.