Legacy to cloud: former founder and CEO challenges old business

In an interview with Information Age, Gaurav Dhillon - founder and CEO of SnapLogic - discussed how to start a business in the modern era and why legacy systems must make way for the cloud

Legacy cloud

'Privatisation of public companies involves huge debt encumbrance. Typically the way that works - like all corporate raiders have worked since the beginning of time - is you strip out some of the strong, high-performing assets of the company and you securitise that' - Gaurav Dhillion, CEO and founder of SnapLogic

SnapLogic is an integration platform as a service that secured an additional $40m in funding in December to support its European expansion. It was founded in 2009 by Gaurav Dhillon, the former founder and CEO of Informatica.

Dhillon is taking the approach of tackling Informatica head on with an aggressive push to move companies onto SnapLogic’s platform and away from Informatica’s legacy technology.

During his interview with Information Age Dhillon went into great detail surrounding the needs of modern enterprise and his view of the decline of legacy systems, as well as providing readers with a snapshot of his business.

>See also: Why law firms must overthrow legacy IT

He also provided some advice to potential entrepreneurs looking to move out on their own to start a business, while discussing the challenge of finding the right funding partners and the perils associated with privatisation.

So why did you choose to leave Informatica?

I’m an innovator and wanted to create bold new products with dramatic benefits. There were disagreements with the board over the direction of the company and it was time to go.

Ultimately though, and this is also why I founded SnapLogic, it is that aging enterprise technology doesn’t move fast enough to keep up with the speed of today’s business.

Anything still based on technology from before the web, from the last century and before the rise of cloud isn’t something that a modern business can run on. Well they can, but they shouldn’t.

The direct path between a problem and a solution is to use appropriate technologies that are in sync with the problems being solved, in the project times and the budget that are available today.

For me it was clear: it was time to reinvent integration for the modern enterprise – an enterprise that is increasingly living, working and innovating in the cloud.

What is the impact of running businesses on legacy technology?

While you can run your business on legacy technology, just as you can run a modern company on a lot of adding machines, the real question is should you?

You could also ride a horse to the office but it isn’t the most efficient way of getting there.

The reality is that when legacy technology was developed the world was a lot simpler. There were just a few databases that mattered, they were just a few ERP systems (Oracle, SAP and a young PeopleSoft) and clouds were something you saw in the sky.

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Yes, many businesses have invested heavily in legacy tech and don’t want to give up on sunk costs, but they really need to think about the sunk opportunity they are missing out on.

With legacy technology remaining a fixture in enterprise technology environments, businesses aren’t as agile as they should be. They can’t meet users’ demands for data access, they can’t connect cloud applications and they certainly can’t do it quickly.

Perhaps most importantly to a millennial smartphone business set, there is no self-service and to them IT seems awfully backwards and somewhat obstructionist.

What do you think companies need in the modern enterprise?

Today, most enterprises are making a conscious decision to stop throwing good money after bad on their application portfolios.

They recognise they can’t lose out on more opportunities. They are switching to modern enterprise SaaS.

As a result, there’s been a huge shift toward solutions like Salesforce, Workday and ServiceNow. Companies that swore they would never give up on-premise software are moving their application computing to the cloud.

In light of that, in a world that has gone “cloudy” and offers new, ultra-modern technology at commodity prices, you start to arrive at a realisation, “We ought to modernise. We should give up on the sunk costs and instead think of the sunk opportunity of persisting with clunky old technology.”

This is the “match point” that SnapLogic can defend into eternity. Hundreds of customers around the globe testify to that.

A large majority of these companies, our customers, had some flavour of Informatica or other legacy integration technology in place, and they made the choice to move to SnapLogic.

>See also: How to keep up with the millennial entrepreneur

We live in an age where people expect multiple utility. It’s a good thing – if you’ve ever held an iPhone, you’re never going back to a flip phone. You want your phone, camera, music player and more in one device. As they teach you in law school, you can’t “unring the bell.”

Expectations for multiple utility are all over the workplace. Millennials, who are now a big force in the working world, are approaching the data consumption challenge with a clean slate.

They say it should be easy, like a smartphone, and be self-service. Once again, millennials are looking for multiple utility.

This is why we developed SnapLogic – with these users in mind – so they can combine Snaps and integrate data from different systems seamlessly, quickly and easily without a degree in coding.

Can you explain why the move to privatise a public company is a bad idea for long term business?

In my view, privatisation is up there with the tooth fairy. Many companies have gone down this road, but how many have been able to rise, phoenix-like, to the top of their industry?

Privatisation of public companies involves huge debt encumbrance. Typically the way that works – like all corporate raiders have worked since the beginning of time – is you strip out some of the strong, high-performing assets of the company and you securitise that.

In the case of software companies, there is an immediate emphasis on maintenance of existing customers, and the maintenance stream is siphoned off to pay the debt. And as a result there is almost never any innovation funding left.

The focus then becomes keeping the frog in the boiling pot of water, so to speak. Every day there is continued decay, and some companies can keep up the pretence for a while.

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But as Hemingway famously said in The Sun Also Rises, and I’m paraphrasing here, “a gambler goes broke slowly and suddenly.”

Unfortunately I saw this happen with the company I founded years ago, Informatica. It’s a shame, really – you feel bad for the employees who showed up every day and worked their heart out. And you feel bad for the customers who are going to get squeezed.

It’s that old recipe of how do you make lemonade from lemons? Squeeze, squeeze. Wall Street will do alright, as will a certain set of people at the top of the company, but that’s about it.

How do you go about choosing the right funding partners for your business?

Know yourself. Understand your strengths and weaknesses, and have a high degree of self-awareness. Then find someone who complements you, someone who can help you finish the story… “I have X and my funding partner has Y.”

When starting up any new business you have to have a clear vision, and funding partners need to understand and want to be involved in getting there.

Questions to ask yourself and potential partners include:

  • Do they understand the industry you operate in?
  • Does their portfolio include others in the same industry?
  • Do they have the global reach you want your business to have? Will they help facilitate expansion into new markets?
  • Will they give you the space you need to be agile enough to take opportunities when they arise?
  • What is their track record in your industry?

What advice would you give to entrepreneurs who are thinking about leaving a successful business to start their own?

It really depends on the entrepreneur’s core skillset. If you’ve got a strong tech background, then I’d encourage you to learn the business side. Before you go it alone, spend time around some business leaders at your company that you admire.

Go take a sales job, take a quota and try to fill it, get in the business of selling your idea and really understand how to do that.

>See also: How the cloud will shape infrastructure this year

Conversely, if you’re a salesperson, go spend time with your product experts, figure out how products work, why some products work and some don’t.

Try to demystify some of the product market fit which is that yawning chasm of opportunity. Aside from that, it is always a risk, so sometimes you just need to take the leap. The most important thing is courage backed by some due diligence.

Test out your business idea on those in the industry, research your potential competitors, talk to businesses about whether there is a need for what you want to develop and have a clear, confident vision of where you want to take the business.

What is SnapLogic and how does it differ?

Our aim at SnapLogic is to reinvent application and data integration for the cloud era. To respond to digital change and be agile in a fast-moving business environment.

Modern enterprises are increasingly deploying cloud applications and new analytics while also managing legacy on-premise solutions.

In this hybrid world, these organisations must create business processes and analytics that bridge both worlds.

That’s where SnapLogic comes in – we connect and bring all your apps and data together, whether on-premise, in the cloud or in hybrid environments – so you can gain new insights and unlock ROI from your cloud and big data initiatives.

SnapLogic is the leader in self-service integration. Our Enterprise Integration Cloud accelerates data and process flow across cloud and on-premise applications, data warehouses, big data streams and IoT deployments.

>See also: Unlocking creativity with platform thinking

Unlike traditional integration software that requires painstaking, hand-crafted coding by teams of developers, SnapLogic makes it fast and easy to create scalable data pipelines that get the right data to the right people at the right time.

Codeless integration eliminates “technical debt” while enabling analysts, data scientists and business users to create integrations in hours using visual drag-and-drop software. Under the hood, SnapLogic’s powerful data streaming architecture delivers real-time processing with high throughput for faster data movement across the enterprise.

Hundreds of customers around the globe – including Adobe, AstraZeneca, Box, Capital One, GameStop, Verizon and Wendy’s – rely on SnapLogic to automate business processes, accelerate analytics and drive digital transformation.

SnapLogic has secured $40 Million in EU expansion recently… what are the future plans for the business?

The new funding is being used to expand sales, marketing and customer service globally to meet growing demand for self-service integration.

It will also be used to increase our footprint in Europe. SnapLogic has added more than 300 new customers in the past year, bringing our total customer base to more than 700. Significant wins include Clorox, Del Monte, Denny’s, Groupon, Magellan Health, Teva Pharmaceuticals and Wendy’s.

We’ve now got an office and a strong team in London and we’re talking every day to customers across Europe who want to connect faster and accelerate their business.

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