Even today, 12 years after the emergence of cloud computing, many IT managers are wondering when and how they will migrate their applications to this technology. It was exactly this question that led, in 2013, entrepreneurs Ricardo Brandão, 37, Rennan Sanchez, 32, Rodrigo Burjato, 35, and Caio Klein, 45, to found Sky.One — a company that offers three solutions to facilitate the use of the cloud environment for companies.
For lay people, going to the cloud may seem like a simple decision, but for developers and users of robust and complex systems, this is a thankless task, even more so if such systems were developed based on the technology of the previous generation, which used servers on premise (physical hardware stored in a company room). Doubt usually revolves around the following dilemma: is it feasible, in economic terms, to rewrite all the software code to be able to use it in the cloud, or is it better to stay the way it is? (Here's a little historical help: in 2006, Amazon introduced the Elastic Compute Cloud, EC2, and inaugurated AWS – Amazon Web Services — thus materializing the concept of “cloud”, first used in 1997 by the Indian professor Ramnath Chellappa, during a talk in Dallas, USA In Brazil, AWS arrived in December 2011.)
This transition, or cloudification, as CEO Ricardo says, is done without the need to rebuild the software, because the startup's Auto.Sky platform “moves technologies”. He talks more about:
“We created an intelligence layer that reads the software as it was written in the old system and adapts it to the new system”
This solution is responsible for 70% of the startup's revenue and is sold on a recurring basis at an average monthly ticket of 6,500 reais.
Most of Sky.One 's customers are medium-sized and do not always have a strong IT structure. So, the startup offers a second type of solution called Guru.Sky, a consultancy specializing in cloud computing that can assess the client's structure and organize the implementation of the best solution, with a customized format and investment. This segment has grown so much within the startup — it already represents 25% of revenue — that, six months ago, the founders decided to transform it into an independent business unit.
A SPIN OFFS GENERATOR
Guru.Sky, also from the startup, now has its own CNPJ and a minority partner, in addition to Sky.One . “As we grew a lot, we couldn't handle other opportunities. Our option was to bring in another entrepreneur for the services part, which uses all the structure we already have here (marketing, back office, name, money, customers and partners). We wanted someone to ring the bell for this business on a daily basis!”, says Ricardo.
Sky.One 's rise to the status of holding company did not remove responsibility for growth at a startup pace, even more so after the investment of 22.5 million reais made by the Invest Tech fund in January. In the first three years of life, the company grew 300% per year. This year, revenues will double (due to a confidentiality agreement, the company only informs a generic value, which is between 50 and 100 million reais). And the goal is to double it again in 2019. Ricardo says:
“As entrepreneurs, we have a plan: we want to be a unicorn. Nothing less than that interests us.”
The strategy continues to be to provide a quality service to the current 1,000 customers (5% of them outside Brazil, in particular the United States and Mexico) and to manage spin-offs based on products that become new business units . Next in line is Sky.Saver, a solution for companies that use AWS that reduces Amazon EC2 costs by up to 80% using Spot Instances. Better translate, right?
Cloud providers — AWS, Google Cloud Platform, Microsoft Azure, IBM Cloud, Oracle Cloud, Alibaba Cloud — always need to have extra capacity beyond what is contracted to meet urgent demands. They usually have 75% idleness in periods of the day and month, according to seasonality. So, these players hold auctions for the idle part, with a price well below the table. However, at peak hours, the cost of idle capacity rises, like stocks on the stock exchange. So, closed packages for using the cloud are offered to companies that don't want to take the risk. If the contractor does not use the agreed amount, they must pay for it in the same way.
Returning to Sky. Saver is software that predicts when auction prices explode so companies can make the decision to go back to the list price. “It orchestrates that price all the time and brings the benefits of the discount. The customer wouldn't be able to do it alone, by hand, because there are hundreds of combinations”, says Ricardo. The average monthly fee for this service is around R$1,500.
THE BUSINESS WAS NOT A DISCOVERY, BUT A FINDING
When invited to go back in time and remember what inspired the founders to create the startup, Ricardo is categorical: “We didn't discover anything. People noticed. This is the great advantage of being in a company listening to the customer, the supplier, the employees. That's where the pain appears. And it's up to anyone who has the profile of being a 'problem solver' to do something”.
It was early 2013. Brazilians were still wary of migrating technology to the cloud for cost, time and security reasons. Ricardo and Rennan, COO of Sky.One , were about to sell the company they had dedicated themselves to for 11 years, the software developer DN4, and were looking at what they would do from then on. Still within the business and in contact with customers, they realized that the adoption of cloud computing would be an important disruption to follow. Ricardo says: “It was almost like a transition from DOS to Windows”. And he continues:
“Many companies had already experienced the trauma of systems migration and our idea was to create something to make it easier for them to use the cloud, without spending so much money and in a quick process”
Ricardo and Rodrigo, CFO, teamed up with Caio, COO International, and Rennan, CTO, to set up the business. While the last two developed the software itself, the others went to the streets looking for investors or clients (whichever came first!). Money for pre-operational stage businesses, the so-called seed money, was very rare. On the other hand, the network of contacts, conversations and presentations resulted in a general pivot in the original idea. The software that the entrepreneurs envisioned making is now an integral part of the Auto.Sky platform.
The CEO talks more about the partners' initial proposal: “Our idea was to be just software at the end. The customer would go to Amazon (the only supplier at the time) to use our product. But we realized that cloud computing was such a new thing that if we didn't help companies and developers make the transition, they would never use our solutions.”
The four founders of Sky.One started working in a coworking space and grew. In March 2014, the first paying customer entered. From August of the same year, the company gained traction. Currently, the team has 110 people, most of them based in São Paulo. There are sales structures in Belo Horizonte, Rio de Janeiro and Miami, where Caio moved two years ago. New teams will be formed in early 2019 to serve Goiânia, Porto Alegre and the northeast of the country.
THE ART OF GROWING KEEPING THE STARTUP AGILITY
Despite the startup being already well structured, the partners feel like they are starting over every year and this continues to keep entrepreneurs awake at night:
Before I thought if the business would survive, sell and work well. Now I think, 'If we don't double in size, how will we accommodate everyone on the team?
In the beginning, Ricardo's concern was not to die on the way. The founders took a risk and invested 500 thousand reais of their own resources and proposed to stay between two and three years without withdrawal. Looking back, Ricardo says: “We have to deal with expectations. There are those who only look at money and those who look at the whole trajectory”.
The CEO claims that finding the right combination between rapid growth and the need to have corporate processes that are more tightly tied to the back office, controllership and governance is difficult. He continues: “We are a startup, we want to grow at the speed of a startup and bring innovation all the time, but we need to present numbers and be audited annually”.
An obstacle to this blossoming of the business is the thin line of people development. The founder comments that a characteristic that is difficult to find in professionals is timing:
“In a technology environment, you can't be ahead or behind, otherwise you die”
He continues: “Each person has their development time. As we are a very young company, there are people who started with us three years ago and are still not ready to take the next step”. To become candidates for unicorns in 2020, there is no other way to deal with the challenges, other than letting the two faces emerge: the startup and the more structured company. No one said it would be Easy.