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Sky is the limit for new technology venture

Rochester Business Journal
April 5, 2013

Aaron Newman knows a little something about technology trends. He has spent the last 15 years molding successful businesses around them.
 
Newman has founded three significant tech businesses since the late 1990s, including Techrigy Inc., a Pittsford-based social media tracking company he sold for more than $4 million. Newman's latest venture is Rochester-based CloudCheckr Inc.
 
CloudCheckr creates Web-based analytics software that allows businesses to manage their data usage in the public cloud, a computing model in which service providers such as Amazon.com Inc., Microsoft Corp. and Google Inc. host businesses' data over the Internet. For businesses, the cloud serves as an alternative to maintaining their own on-site data centers.
 
The public cloud typically runs on a pay-per-usage model. CloudCheckr offers analytics software that businesses can use to see how much data they're storing, how secure it is and whether it is being used effectively.
 
"The cloud has been around for a while, but it's certainly at a tipping point," Newman said. "However, it's just now that hosting companies have all the robust features and the security reliability to make it acceptable for most companies.
 
"The other thing has been getting people's minds around the fact that they're going to house their data somewhere else. Once people see our tools and other tools out there, it will build that ecosystem that makes it much easier for them to move to the cloud."
 
A report from Synergy Research Group says the cloud-based services market grew 65 percent to $2.75 billion globally in the first half of 2012.
 
Those numbers bode well for CloudCheckr, which has 15 employees, including eight in Rochester and the rest at satellite offices in San Francisco and Argentina.
 
Newman said the company is growing and estimated it will achieve revenues of more than $1 million in 2014 and add more than 50 employees within the next two years.
 
He co-founded CloudCheckr with financial management veteran Aaron Klein in November 2011. The company launched the first version of its software in January 2012.
 
CloudCheckr operates with Amazon.com's public cloud platform, Amazon Web Services. CloudCheckr has a "freemium" business model in which AWS clients can access a basic version of the application at no cost.
 
Klein said CloudCheckr has some 700 users on the free model, mostly small to midsize businesses. The company plans to launch its premium model in mid-April.
 
CloudCheckr so far is funded by Klein, who serves as chief operating officer, and Newman, its CEO. Newman said his experience leads him to believe CloudCheckr could increase its revenue as much as 300 percent by 2016.
 
Newman's first major tech startup was DbSecure Inc., a database and document security company he co-founded while living in New York City. Publicly traded Internet Security Systems Inc., which is now owned by IBM Corp., acquired DbSecure in 1998.
 
Newman next founded Application Security Inc., another database security company in New York City, in 2001. He helped expand that firm to more than 2,500 enterprise customers and 200 employees in less than five years.
 
Newman left Application Security in 2005, moved back to Rochester and started Techrigy. The company designed sophisticated social media marketing and analytics software at a time when Facebook Inc. was just picking up steam.
 
"I like startups," Newman said. "I like taking something from nothing and growing it to 15 to 20 people and watching it take off from there."
 
Techrigy was acquired in 2009 by United Kingdom-based marketing automation company Alterian PLC for $4.1 million in shares of Alterian and the assumption of shareholder loans totaling $900,000.
 
Newman took a couple of years off after Techrigy before meeting Klein. Prior to CloudCheckr, Klein worked in finance on Wall Street with companies like Barclays Bank PLC and Royal Bank of Scotland PLC.
 
Klein eventually moved back to Rochester and started his own financial management company, Brighton Global Assets LLC, in 2005. He said he was looking for a career change when he met Newman, who lived down the street.
 
After founding CloudCheckr, Newman spent the first year working with a technical team to develop the software. Over the past six months, Klein has been aggressively marketing CloudCheckr and establishing strategic partnerships with companies such as UX World Inc., a cloud-security company based in Hawthorne, Westchester County.
 
CloudCheckr does have its share of competition, especially in the startup realm from established brands such as Nimsoft, Aternity Inc. and Zoho Corp. Even IBM, which has been aggressive in the cloud-services market, offers its own suite of cloud-monitoring applications.
 
Still, there appears to be a lot of room to operate in cloud services. A report released last year by Seattle IT consulting firm Avanade Inc. showed that 74 percent of companies in the world are using some form of cloud services, up 25 percent from 2009.
 
Newman said CloudCheckr is working to get more clients by expanding its offering beyond Amazon Web Services to other leading cloud-hosting companies such as Rackspace Inc. and Windows Azure.
 
"We're betting the farm that companies are going to realize they should stop hosting their own servers and let companies like Amazon and Microsoft do it at a fraction of the cost," he said. "As companies do that, they're going to need tools to analyze it, manage it and look at their costs, track usage and know what they have running. That's where we come into play."

4/5/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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