1Mby1M Virtual Accelerator Investor Forum: With Ashmeet Sidana, Chief Engineer at Engineering Capital (Part 3)

Sramana Mitra: I would say that the platform and the service world right now is under the assumption that most of the infrastructure layers and innovations are already in there.

Domain knowledge for a particular functional layer is where the innovation is happening whether it’s Shopify for eCommerce, Atlassian in the enterprise collaboration space, or Twilio in the communication path space. That’s where this class of companies is operating.

Where is the equivalent of this in the infrastructure layer? We cover Qualys quite extensively. I have known Philippe Courtot for twenty years. I know him really well and I’ve seen his thinking evolve.

One of the things that he used to sell me at all times – he’s a sales guy so he is always selling something to me – is how great Qualys is. I understand how great Qualys is, but the question that arises in my mind is that he thinks that they’ve created this great architecture where it’s like the razor and blade strategy where, on that architecture, you can bring in a lot of different components of a holistic security solution.

They already have a broad portfolio of security solutions and the vision has always said that there will be ten to forty more products, but it will still be on all that architecture. However, I haven’t seen Qualys open that up as a Platform-as-a-Service such that other innovators can build products on top of security products on top of that architecture.

That’s what I’m asking you for. Is there any gating items for the infrastructure layer players to also do the same thing that the application layer players are doing?

Ashmeet Sidana: There isn’t a technical gating item. What is going on right now is that people have business strategies that they are following. They are trying to own certain parts of that stack. Of course, people choose business strategies that play to their advantage.

Why did Microsoft position itself as your all-around enterprise with Office 365 and the benefits of Office? It’s because they have a legacy and almost monopolistic position with their product. They were able to leverage that into the cloud in a clever, sophisticated, and nuanced way.

Every player sitting over there is trying to think, “What is a way that I can draft the biggest piece of this part?” That is the architectural, technical, business, and partnership decisions of these companies. You have to evaluate it from their shoes and ask yourself, “Why would they do this?”

Conversely, there are parts that these people don’t want to do for business reasons. For example, Microsoft invests heavily in security. They have an enormous and sophisticated security infrastructure, but they will take responsibility for your security. They don’t offer security products with you directly.

They wouldn’t want to own that part of the product, because it’s a messy and difficult problem. You have to evaluate these platforms with large companies from that perspective while keeping in mind that there are some unique advantages that the large guys have.

Particularly in Infrastructure-as-a-Service, there are very significant economies of scale. It’s hard to put up a data center in 40 different locations in the world and a CEM through them at scale while offering high uptime to the customers. There are enormous economies of scale.

Azure, Amazon, and Google are exploiting that advantage to their benefit right now. That is the market landscape that an entrepreneur has to innovate in. You think and say, “Okay, that is what is out there. How can I create something unique and special and grab my fair share of this market?”  

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Ashmeet Sidana, Chief Engineer at Engineering Capital
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