Deal Radar 2009: SnapLogic

SnapLogic is an open source data integration framework that helps companies tie in their business data. It uses standard Web interfaces with forceful programming languages to address any data integration problems companies may face. The framework also uses an innovative DataFlow architecture and the SnapStore, where third parties develop Snaps that improve connectivity and functionality to the server.

SnapLogic DataFlow is a scalable data integration platform that leverages Web technology and standards to provide organizations of all sizes with a flexible and cost-effective solution for on-demand data integration. DataFlow can read from and write to any data source, easily integrating data from SaaS applications like Salesforce.com and SugarCRM, the Web, databases, files, and on-premise applications. This allows both customers and third parties to easily use the SnapLogic open API (SnAPI) to build new components (Snaps) that provide either connectivity to a data source or data manipulation. The SnapLogic DataFlow Designer is used to define the order and execution of the Snaps, creating ‘DataFlows.’ SnapLogic may be deployed on-premise with the majority of popular operating systems via either hosted cloud operation or a distributed hybrid approach.

SnapLogic recently announced the creation of the SnapStore, where independent software vendors (ISVs), developers, and consultants can offer Snaps they have created for sale to SnapLogic DataFlow users. The developer of a Snap gets 70% of the revenue from its sale, and there is no listing fee.

Gaurav Dhillon, chairman, co-founded SnapLogic in 2006. Prior to that, he was CEO at Informatica, which he co-founded in 1992. He was instrumental in growing Informatica from a startup idea to a software enterprise with customers and operations around the world. After Informatica’s successful IPO and its expansion to Europe and Asia in 2004, Dhillon was recognized industry-wide for his data integration innovations. Prior to founding Informatica, Dhillon held management and engineering positions at Sterling Software and Unisys Corporation.

After Informatica, Dhillon invested in consumer Internet and open source companies.  It was during this time that he saw the evolution of cloud computing. Co-founder Mike Pittaro, SnapLogic’s chief community officer, was a former director of strategic support at Informatica with Dhillon, and together they founded SnapLogic to address the growing need for data integration between the business Internet and on-premise applications.

SnapLogic has raised approximately $4.8 million in funding since its inception.  In May 2007, it announced $2.5 million in seed investment from Dhillon Capital. In October 2009, SnapLogic closed a $2.3 million Series A financing round that included investments from Andreessen Horowitz, Maples Investments, Google engineering VP Brian McClendon, and Epinion co-founder Naval Ravikant.  The company expects to raise more capital in the second quarter of 2010.

By 2006, both the success of SaaS applications like Salesforce.com and the need to integrate data from the cloud with other enterprise data were becoming clear. The SnapLogic team realized the need for a new, open architecture that could accommodate the proliferation of data sources like the Web and social networks. SnapLogic is positioned as an alternative to both expensive, closed, proprietary, client-based integration solutions and the massive amount of hand-coding that’s still being done to accomplish data integration in enterprises today. It differentiates itself by providing a complete, open, and modular solution to all the data integration challenges at an affordable price. Earlier solutions were by proprietary vendors, designed with a client/server architecture in mind, and were priced at around $500,000. SnapLogic uses modern Web architecture and has a pricing structure of only thousands of dollars. The company’s major competitor is the massive amount of custom, hand-written code, and SnapLogic’s main objective is to replace this with the SnapLogic DataFlow solution. Other companies in the market are giants IBM and Informatica, both of which are proprietary vendors, as well as companies like Talend that are more similar to SnapLogic.

According to Gartner, the data integration market is approximately $10 billion. Of that, only about 20% is made up of products from vendors, while the remaining 80% of the market comprises IT professionals and consultants using scripting languages like Perl to build homegrown data integration solutions.  These hand-coded scripts are often never maintained or used again, but are built over and over again for new projects. SnapLogic is targeting that 80% of the market, which includes data-rich service businesses, especially business Internet usage in telecommunications, financial services, and the media. Customers include National Public Radio station KQED and WaveMaker Software.

Based on a subscription model, SnapLogic offers the SnapLogic DataFlow Server as a free download with two different service components, Core and Pro.  Additional support is available in the range of $10,000 for six licenses to $25,000 annually for 25 licenses.

SnapLogic is in the revenue stage. It currently has 89 active installations. To grow, the company’s strategy is to focus on market penetration, rather than an early international expansion. The company plans to continue to grow its business and focus on execution rather than on an exit.

Recommended Readings:
Moving to the Cloud: Informatica and Autodesk
Deal Radar 2009: Talend

This segment is a part in the series : Deal Radar 2009