I recently met with Vineet Jain, CEO and co-founder of Egnyte, which offers file sharing for enterprises, with a hybrid cloud and data center model.
My recent post about startups having to sell because they can’t get to scale, caught the attention of Jain’s team and we met to discuss the company’s strategy. It is competing against some extremely well funded companies such as Box and Dropbox. Here are some notes from our conversation:
- Egnyte has raised total funding of $61.5 million. This compares with Dropbox, total $607 million; and Box with $414 million and it has plans for an IPO valued at $250 million.
- Jain recognizes that his rivals are very well funded but he says he can build Egnyte by concentrating on the enterprise and offering a highly secure service focused on the needs of large companies. By building for long term value he believes Egnyte can survive and prosper.
- His competitors are is well funded but their freemium business models cost a lot of money to maintain and they are burning through cash, which is why they’ve had to raise large amounts of capital. Egnyte’s business model doesn;t have the same freemium costs as Box or Dropbox and it is close to profitability.
- He says that by offering enterprise IT a hybrid file sharing model, where companies can either use Egnyte’s cloud storage or run the software in their own data centers, is exactly what IT management wants. The cloud alone is not enough.
- He says the timing is good because enterprises recognize the value of cloud computing and storage. The company’s software lets the IT managers control file access and security across internal enterprise systems and external cloud storage.
- The company makes its money from software and not by charging for data storage, which has rapidly become a commodity business. It charges per seat.
- Finding engineers is hard but the company has about 32 developers in Poland and it is very pleased with the quality of Polish programmers.
- Google Ventures, the venture capital arm of Google is an investor and the company’s offices are right next to the Google campus in Mountain View.
- Jain has more than 20 years of business experience at KPMG, and Bechtel, and prior to co-founding Egnyte in 2006, he founded Valdero, a supply chain software company.
- He has had several offers to sell Egnyte but says he turned them down because he wants to build a large and independent company. It’s rare to find a CEO with a determination to stay independent and prosper despite extremely well funded competition.
Egnyte provides deployment models to solve any use case including cloud file sharing, private file sharing, cross-office collaboration, and fast local file access. Users can have a single view of all the files they have permission to access, regardless of where files are stored — on the user's computer, in local storage in their office, on storage devices in remote offices or in any cloud.
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