Meeting with Pertino at the Consumerization of IT Conference in San Francisco

How do you name your business? Of course, conducting competitive business is far more important than coming up with a clever name for your company. But a good name can attract positive attention to your business. Pertino is cleverly named. Cisco was named by taking “San Fran” out of “San Francisco” and has become a tremendous success. Craig Elliot, cofounder of Pertino and former CEO of Packeteer, and his team took “Cu” out of “Cupertino” for Pertino, which was started close to where Packeteer used to be in Cupertino, California.

I’m always watching my radar screen for interesting companies and people to interview, but my radar sensitivity must not be set right. I had not heard about Pertino before I found them on the speaker list of the Consumerization of IT Conference in San Francisco. I liked what they had to say.

They have collected $29M in VC funding ($9M for series A and $20M for series B). Japan-based Jafco led the series B investment, which may well prepare Pertino for international expansion later. They now have about 60 employees, and 35 are engineers, typical for a technology startup. During public beta, they had 5,000 customers try out their solutions.

I sat down with Todd Krautkremer, VP Sales & Marketing, at the Consumerization of IT Conference and chatted about their business.

Todd Krautkremer, VP Sales & Marketing

In short, Pertino provides a technology to create a private secure network (encrypted with 256-bit AES) on demand via clouds with selected mobile devices like mobile phones, tablets, and any other computing device. Android devices are supported, and the iPhone version will follow soon.

Additionally, they support the following devices:

  • Windows 7/8 PCs
  • Windows 2008 R2 and 2012 Servers
  • Mac OS X 107 and above PCs and Servers
  • Linux servers
  • Android 4.3 and above smartphones and tablets

I asked Todd to draw a simple diagram to explain how their technology works. A very high level description and diagram exist, but they are too high a level for my taste, as I like to see the details. Todd told me that they were working on such a thing as we talked.

This is how it works.

Their product consists of two utility parts: client and server. The client utility is installed on each mobile device that should be a part of the private network. The server utility is placed on one of their IaaS cloud platforms. Pertino currently uses the following cloud platforms: AWS, Rackspace, Digital Motion, and Linode. They use multiple cloud vendors to be close to the customer (low latency), to be resilient (remember AWS outages?), and to leverage dynamic cost changes.

Their solution is developed on what others have implemented, and they make it available as needed.

It is very simple, like connecting ether cable to a LAN switch.

Their network solution on the server side contains a software-defined networking (SDN) function. With that, you can increase bandwidth and re-route traffic on demand. They are a member of Open Networking Foundation and charge based on the number of end nodes (devices), which can be easily enforced.

Todd elaborated the Software Defined Network (SDN) function as follows:

The Pertino platform is called Cloud Network Engine (CNE) and it consists of three components. The Control Plane, which is the omnipotent controller of people, devices, policy and network topology; the Data Plane, which is the data forwarding element located close to users and where the user’s virtual network actually resides; and the Pertino app, which is client software that resides on devices and is controlled by the Control Plane and forwards packets to the Data Plane that it’s attached to. The Control Plane (CNE Controller) and Data Plane (CNE vSwitch) run on standard virtual machines within major cloud providers, including AWS, Rackspace, Linode, and Digital Ocean.

  • Client = Pertino App
  • Server = Pertino CNE vSwitch Data Planes

At that point, I interrupted Todd (sorry, Todd) and started to explain why their solutions are viable and interesting myself.

Pertino has done what people could not even imagine in the pre-cloud era. They place their server utility widely in the world. In the pre-cloud era, networking technologies like Pertino’s were implemented with both hardware and software. Deploying hardware boxes outside your local locations, much less outside the US, is prohibitively expensive. Some hardware box management may be possible remotely online. But other management must be done in person at the physical location, and that requires remote staff at the site. In Pertino’s case, their solution is totally software, and software solutions can be pushed to a cloud platform online. In other words, everything is virtual.

Besides, depending on the load and traffic requirements, more server utility instances can be spawned to accommodate changing demands. When demands for communication subside, utility support can be lowered, leading to a very economical business model.

Summarizing this from the standpoint of capex vs. opex and expandability:

Pre-cloud era:

You colocate your hardware boxes at each data center. Let’s look at capex and opex for this. You need to configure, update, and maintain each box regularly. Management can be done remotely, but some things need physical attention on location.

  • Capex: You need to select and purchase the right hardware box. It needs to be replaced every few years.
  • Opex: Opex includes fees for colocation (including space and power) and remote staff. In addition, you might need to go to a remote data center for fine-tuning and communications with remote staff.
  • Expandability and coverage: You need hardware boxes colocated at each data center. Due to high capex and opex, you cannot move quickly to cover a wide geographical area. A VC would not like you so much if you prematurely expand your operations.

Post-cloud era:

You do not need any hardware but only software.

  • Capex: You do not need to worry about selecting boxes, because no hardware box is necessary.
  • Opex: Software utility in the form of virtual machines (VM) can be placed on an as-needed basis. No colocation fees or remote staff costs are required.
  • Expandability and coverage: This is a pure software play and you can easily expand. A VC would love you when you expand.

Target Markets

They have been targeting the SMB market but plan to enter the enterprise market. In the SMB version, one server utility is used to form a private network, but the enterprise version requires more reliability and availability and less latency. The enterprise version places the server utility at multiple cloud platforms, as shown in the next figure.

Todd added as below:

SMB for them today is companies with up to 500 employees. They will be targeting larger companies (5 to 1000 employees) and departments within 1000+ employee enterprises in the future. The type of enhancements needed for larger organizations includes:

  • More advanced network segmentation (ability to segment a virtual network into smaller workgroups)
  • Deeper integration with customer authentication systems (Active Directory)
  • Ability to deploy a single virtual network across multiple vSwitches (Data Planes)

The enterprise version will be available in the second half of 2014. The good news is that there would be more revenues, but the bad news is that it would take more time and scrutiny before a sale is made.

Future direction

Currently, you have no direct access to networking gears (routers and switches) in IaaS clouds like AWS. But as AWS and other cloud providers allow access, Pertino can directly access those networking gears to provide more interesting functions. There may be forks of Openflow or Openflow-like directions. But as Pertino provides an SDN controller, they can develop APIs for each different flavor and exploit them. Remember that they already have a SDN controller and provide north, south, east and west APIs. The missing piece is direct support for OpenFlow or other Pertino Controller to other 3rd party equipment (Data Plane) interfaces.

Zen Kishimoto

About Zen Kishimoto

Seasoned research and technology executive with various functional expertise, including roles in analyst, writer, CTO, VP Engineering, general management, sales, and marketing in diverse high-tech and cleantech industry segments, including software, mobile embedded systems, Web technologies, and networking. Current focus and expertise are in the area of the IT application to energy, such as smart grid, green IT, building/data center energy efficiency, and cloud computing.

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