In recent years, most enterprises have been switching from maintaining independent on-site servers to public cloud computing services, but Dropbox decided on the opposite move. Beginning in 2015, Dropbox gradually shifted its operations from Amazon's AWS cloud to its own servers. The result was a $75 million cost saving over the next two years.
The move exemplifies the problematic nature of the public cloud services provided by technology giants. They offer great initial advantages: the cloud computing infrastructure is immediately available, without high initial set-up costs, and resources can be increased or decreased at any time easily and conveniently. But as enterprises start to grow, they make the painful discovery that the expense of cloud computing grows faster than income.
Dropbox's move is unusual, but it's not alone. Spotify, for example, developed a plugin that presented developers with cost estimates, enabling them to correct their code so as to lower computing costs. Granulate, a startup founded in 2018 by Asaf Ezra (CEO) and Tal Saiag (CTO), helps companies reduce their cloud bills by optimizing computing resource utilization, without having to rewrite code.
A software agent in the cloud
The two served together in the IDF's Talpiot technology program and in intelligence unit 8200. After demobilization in the summer of 2017, they considered the customary founding of a cybersecurity start-up. They began as entrepreneurs-in-residence at venture capital firm YL Ventures, which specializes in cybersecurity investments, and met a series of IT security managers to hear what problems they faced. Ezra and Saiag learned from these conversations how inefficiently organizations utilized their computing resources, and decided to focus on this issue. Granulate was established in 2018.
After a year and a half of development, Granulate launched its product in March 2020: a software agent installed either on the enterprise's servers in the public cloud or in the enterprise itself, that manages the order of operations to improve efficiency and reduce costs.
The order of operations that a server performs is usually determined by the operating system, which operates generically, without analyzing the unique work patterns of the specific organization.
For example, Ezra explains, "When you connect to your Netflix account, the servers need to load the list of popular programs in Israel and also the history of the programs you’ve watched recently. Along with you, there are thousands of other users in Israel who connect to Netflix accounts and servers. So, it’s better to load the list of the most popular programs first, because that’s easier to send to a large number of users at once. Loading the history, on the other hand, is different for each user. "
Savings sans development
The result is a faster response time for applications, along with lower compute resource consumption. Granulate reports reductions of up to 60% in cloud computing costs without any investment in development. The company has about 50 paying customers, including AppsFlyer, Fiverr, Perion Network, and Mobileye-Intel. According to Ezra, apart from Granulate, no other company offers a solution based on optimizing computing resource usage.
To date, Granulate has raised $50 million from investors such as Red Dot Capital Partners, Insight Partners, TLV Partners, and Hetz Ventures. The company employs about 80 people and intends to grow to 95 by the end of this year. Granulate's current revenue is in the millions of dollars, but Ezra is sure this amount will balloon next year.
"Because our solution requires installing a software agent on the enterprise's servers, it demands a very high level of trust on the part of our customers, meaning it’s a slow process. But we’re at a very significant point right now. We’re in contact with the world’s biggest enterprises, in terms of computing power usage; they’re ready to talk and gradually start working with us. Once one company like that trusts you, you’re at an advantage vis-à-vis the others. Next year, we’ll already have tens of millions of dollars in revenue."
Granulate
- Business: Computer Infrastructure Performance Optimization
- History: Founded in 2018 by Asaf Ezra (CEO) and Tal Saiag (CTO)
- Stats: The company, which employs 80 people, has raised $50 million, including from Red Dot Capital Partners, Insight Partners, TLV Partners, and Hetz Ventures. The company has about 50 paying customers and revenue stands at several million dollars.
Published by Globes, Israel business news - en.globes.co.il - on December 7, 2021.
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