Startups class of '06: Where are they now?

Buyouts, build-outs, and shakeups shape last year's startups

In 2006, InfoWorld uncovered 15 startups that emerged after the nuclear winter that followed the dot-com bust with cool, useful technologies. Well, another year has brought a new crop of startup darlings, such as the companies we're profiling each day in May for our Month of Enterprise Startups (MOES) feature. But MOES got us thinking about last year's startups. In the year that has followed, how have these innovators fared?

To find out, we went back to the startups we profiled last year and got an update on how the last twelve months have treated them: which are still standing, which got bought, and which are gasping for air. Here's a look at what a few of the companies we profiled last year are up to.

Fortify Software's technology helps IT developers identify security threats during application development and patch executable code on the fly to prevent malicious exploitation. In the last year, this "startup" has already acquired another company, Secure Software, and expanded its product line to include a tool to test executable code for security vulnerabilities. The Fortify Tracer tool is in many ways a repurposing of the on-the-fly patching tool Fortify Defend, CEO John Jack notes, with the key difference that it reports the vulnerabilities to the IT staff and helps narrow where the problems may be to help instrument defenses until the code can be rewritten or replaced with a more secure version.

Open source data integration vendor Jitterbit has continued to enhance its tools, which let business analysts create their own applications by dragging and dropping Web services and various data sources. Two new versions of Jitterbit's software released in the past year extend support to LDAP directories and Web services hosted within a company, as well as to plug-ins so users and third parties can add their own functionality (for example, support for proprietary compression and decompression). Going forward, the company expects to increase support for applications and data sources used by larger enterprises, notes CEO Sharam Sasson. The company continues to work on providing a way for users to share the workflows they create with others. That's a feature that is in the Jitterbit Server engine, but not exposed to users because the company is still working on an appropriate interface to that capability, Sasson says.

Splunk, the IT data search engine, has seen its users expand the type of logging and analysis for which the company's IT operations logging software is used. Splunk now does compliance and security logging. In retrospect, says CEO Michael Baum, use across areas makes sense as it lets IT use one technology to monitor and analyze a variety of activities that need to be audited. This adoption of Splunk’s technology beyond its original mission caused the company to increase the audit controls over the logs, such as logging all alerts resulting from logging and all searches made, as well as signing the logs to prove they were not tampered with, notes Baum.

But not all the action has been about logging. The company has added new reporting and analysis tools to help users deal with the huge amount of information that Splunk captures — a user challenge that Baum now realizes his company underestimated. Although users always could load the log data to other tools for analysis, that’s proven to be an approach users don’t like. “IT people don’t want to load the data into OLAP or something so they can analyze it,” Baum says. The result: Splunk now does all that for you.

Sxip Interactive now provides identity management services for the Salesforce.com and Google Apps SaaS (software as a service) platforms, extending its reach from the previous focus on individual ASPs (application service providers). Sxip’s appliance-delivered technology integrates into existing enterprise identity management systems, such as ActiveDirectory, so IT no longer has to manage Salesforce.com or Google Apps identities separately. The company has also merged its Sxip Identity Management protocol into the open source OpenID effort to allow users to have a single identity that can be validated across multiple providers, such as government agencies, online retailers, and their employers. And Sxip is working with VeriSign to bring Microsoft’s Windows CardSpace identity manager into the fold. CEO Dick Hardt says that, as a result, Microsoft will support the Sxip/OpenID protocol in future products.

Zenprise has taken its technology for automating Microsoft Exchange troubleshooting into the mobile space, with similar a version that automatically troubleshoots BlackBerry Enterprise Server operations. (Zimbra likewise has extended its AJAX-based e-mail platform to support interaction with a variety of mobile devices.) The underlying troubleshooting technology can be applied to almost any datacenter systems’ interdependencies, such as issues with message queues, performance degradation, and configuration. For now, Zenprise is staying focused on network-related technologies such as Microsoft Exchange and BlackBerry Server. After all, the customers tend to be the same, making sales easier for a small company, notes Ahmed Datoo, vice president of marketing.

Not surprisingly, more than one of the companies we profiled in 2006 looked like tasty tidbits to some of the IT giants that roam the hills and dales of Silicon Valley, Route 128, and elsewhere looking for hot new technology.

EMC, through its VMWare subsidiary, bought Akimbi Systems, which had virtualization software that lets developers easily create virtual test bed environments, saving the labor and expense of traditional testing environments. Akimbi’s tool is now called VMWare Lab Manager. But it has lost its support for Microsoft and Xen virtual machines, making it a less interesting product than it used to be.

Google acquired JotSpot, which provided wiki-based applets that users could modify and extend to create spreadsheets, calendars, and galleries. Now that JotSpot is in the belly of the GooglePlex, Google is mum on its plans and is taking no new JotSpot customers. The company has said that the JotSpot technology fits within its plans for Google’s own consumer-oriented, Web-based editing and spreadsheet tool and sharing-oriented tools such as online portfolios, family sites, and class reunion sites.

As for the other companies we profiled? Most continue to do what they were doing a year ago, with a few clearly focused on building up their internal managerial and sales talent to help make the transition from startup to established provider. For example, ActiveGrid, brought in a new CEO and a new VP of marketing to focus on growth, while founder and original CEO Peter Yared moved to the CTO role to focus on the AJAX-oriented development environment’s technology base.

XenSource brought in a slew of managers from companies such as Intel, Microsoft, and Veritas Software while “hardening” the virtualization technology’s support for Windows to run datacenter applications better. Similarly, network access control appliance vendor ConSentry Networks has bolstered its marketing and distribution efforts while also upgrading its product’s capabilities somewhat.

All in all, not a bad report card.

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