Wednesday, December 5, 2007
Interview with Phil Van Etten, Azaleos
Seattle-based Azaleos (www.azaleos.com) recently raised $10M in a Series C round for the firm's Microsoft Exchange services; to better understand what the firm offers, we recently talked with the firm's CEO, Phil Van Etten.
Describe to us what Azaleos does?
Phil Van Etten: Azaleos is a two to three year old company founded on the premise that running Microsoft Exchange email can be much easier than it is. We've created an Exchange appliance, and provide on-premise email managed services. We have put Exchange into a package, where it is clustered, where we can guarantee high availability times of 99.9 percent or 99.99 percent uptime, so our customers wouldn't have to worry about downtime. At the same time, we made it easier to manage Microsoft Exchange email by creating an image on each appliance, so we can test patches and trouble shoot and manage storage in a customer's environment. Our really proprietary technology is our software, which allows us to remotely monitor and manage email for our customers from our NOC in Seattle. How it differentiates from the managed service providers, is that lots of customers don't want their email and content to leave their site, but don't want to hire Exchange experts to manage their email. The current solution -- where email is completely hosted, or you have one of the big outsourcing firms on site -- means your confidentiality can be compromised, because the content is leaving your site, or is going to a data center, which often isn't in accordance with HIPPA or confidentiality agreements. We take a unique approach, which is to provide on-premise, managed email, which we monitor remotely.
What do your typical customers look like, and why are they using you?
Phil Van Etten: Locally, in the Seattle area, we have a strong presence, especially with consumer brands -- for example, K2, Coinstar, and Zumiez, and Clark Nuber, an accounting firm in Bellevue. They all have Azaleos managing their entire messaging environment, including archiving, and mobile Exchange. The reason why, is that we can do it better, and cheaper, and handle things like migrating them to new versions of Exchange.
How did the company start, and why?
Phil Van Etten: Keith McCall, who was the founder, was director of the Exchange Group at Microsoft, developing and marketing Exchange email. He though there must be an easier way to provide Exchange email to customers, so he started Azaleos. We received our initial funding with Second Avenue and Ignition, which was worth $6 million, and closed our second funding about a month ago worth $10M. We've started to expand the organization, and we've hired across all of our functions, particularly in operations and engineering, sales, and marketing.
When did you become CEO of Azaleos, was this fairly recent?
Phil Van Etten: I've been CEO for about a year. The former CEO had a daughter and left for personal reasons. The board appointed me for the first six months, and I've been permanent since September.
Having been in this for awhile, where do you see this market, how's adoption going, and what's next for the firm?
Phil Van Etten: It's a very huge market. Right now, most analysts have the Exchange market as something between 140 and 150 million exchange users. Twelve to fifteen percent allow others to manage some percentage of their Exchange environment. The percentage of outsourced or managed Exchange is expected to grow to 25 to 30% of users. On premise, managed exchange is also starting to show up as a separate line item at some analysts like Osterman Research. Right now it's only one half of one percent, but will grow to six percent over the next couple of years. That's a huge market. There's also a couple of other things happening -- for example, Service Pack 1 for Exchange 2007. There's a lot of people waiting for that to move to Exchange 2007. It's a great new version, and we'd like to help customers move to Exchange 2007 and help monitor their exchange environment. So, between more people trying to outsource Exchange, and people migrating to new versions, there's a big potential for business. We think we'll be seeing 300 to 400% year to year growth.