Unicorn in the Making: Ecommerce Cloud Startup Webscale Networks Growing at an Unprecedented Pace

Webscale Networks is an eCommerce cloud startup that is growing rapidly. We recently spoke to CEO Sonal Puri and Shehzad Karkhanawala, Director of Marketing about the company’s rapid growth, the cloud as the natural home for eCommerce and Webscale’s role in helping online merchants migrate their storefronts to public cloud services such as AWS and Google Cloud.

Webscale Background

The company has close to 75 employees and raised more than $18M in funding, according to Crunchbase. Its HQ is in Mountain View, CA and there are two support offices in Boulder, CO and Bangalore, India.

Webscale was founded in 2013 by CTO James (Jay) Smith following a graduate paper on decentralized resource management, and leveraging predictive algorithms to scale out data plane assets in the cloud as opposed to scaling up, to give eCommerce storefronts right-sized infrastructure when they need to deal with peak traffic. The first prototype was successfully built and the initial team began to raise funding and develop a business plan. Sonal Puri came on board as CEO in 2015 to partner with Jay and lead Webscale into its next chapter.

Sonal has been in the CDN space for over 25 years, including her time at Speedera, Akamai and Aryaka. Webscale interested her because they were “similar” to other companies she’s worked with… “When I met with the team at Webscale, I realized they were addressing problems that hadn’t been solved previously. They were helping businesses deliver web-based applications and take them to market in a way that guaranteed the highest level of availability.”

Over the last three years, Sonal said, they have made “phenomenal progress on all fronts. No matter what traffic your site gets, we’ll be able to deliver it as you can scale up to infinity if you need to.” She adds, “We are multi-cloud capable – AWS, Google, Azure, CenturyLink, Alibaba, Cloud Sigma… In delivering traditional services as cloud services, we can offer the kind of caching abilities, 360 degree security and scale you see from a cloud based application. We guarantee 100% availability, high performance, and robust security capabilities plugged into the customers’ applications. We are disrupting legacy CDNs.”

The Cloud as the Natural Home for eCommerce

To Sonal, the cloud is the natural home for eCommerce. Many of the companies that Webscale works with are digital-native, so it makes sense for them to go with the consumption model that the cloud offers versus something rigid that dedicated hosting providers such as Nexcess or Rackspace can provide.

As companies migrate to the cloud, it’s crucial to guarantee that their performance and security measures are operating at full potential.

In terms of performance, it’s important to ensure that your dedicated hosting provider has a CDN-agnostic platform that is able to integrate with any CDN and/or performance optimization on the backend.

It’s also critical for eCommerce companies to be able to cope with demand. Sonal told us about one of their customers, a boutique e-commerce store who experienced a sudden spike in traffic after Michael Phelps posted about their products on a popular social networking site. In minutes, the site began to get a huge number of hits. It’s often unpredictable when something like this strikes so it is essential to be able to scale out your servers in the cloud predictively rather than reactively.

To be able to do all this together, says Sonal, “you need cloud infrastructure experts, which is where Webscale comes in.”

Why Companies Struggle with Migration to the Cloud

While such migration may appear to be simple from the outside, Shehzad says that many companies struggle with the migration to the cloud. This is for two main reasons:
(i) There is a big “cloud skills gap” – there aren’t sufficient numbers of people with expertise in cloud skill sets to make such migrations seamless from an in-house IT department, especially as the eCommerce sector is growing so quickly.
(ii) While moving a company’s infrastructure into the cloud, you also have to ensure uptime, security and performance are taken care of. The surface area of an app increases significantly once you migrate to the cloud, for instance, so you need to make sure you have systems and controls in place to protect the app e.g. bot mitigation, WAF, etc.

What Webscale Offers

Webscale provides a security suite, performance delivery optimization solution, and is able to handle scaling the environment up through its own proprietary predictive auto-scaling, which can aggressively scale out when certain patterns are detected and compute perceives what it determines is a scale out event.

When there is an event, whether it is a marketing promotion, influencer post or perhaps it’s Black Friday or Cyber Monday, Webscale’s servers will aggressively scale out based on patterns it is detecting. Once the event has finished, the company scales them back so that its clients don’t pay for capacity they don’t use elsewhere. Essentially in doing so, Webscale is spinning up servers in the public cloud.

Three Product Suites: Security, Performance and Delivery

Webscale offers product suites for enhancing security, performance and uptime, which are customizable according to customer need. Many sites exclusively need their backend security boosting, which Webscale can take care of. Sonal says, many of the sites have performance or code issues where Webscale’s Cloud Perform product can help.

For those customers with multiple issues, for instance, that may not know the details of their security plan and have experienced performance issues, Webscale provides plans that offer complete management of their site and simplifies the technologies for that customer. Webscale offers 100% guarantee of uptime, which is crucial in particular during the peak season.

Webscale can also onboard customers in record times. “We provision sites on the Webscale platform in 2-3 days”, said Sonal, “We go between auto-provisioning and APIs we run for cloud providers. We define everything, we code from the network to the instances to the software stack and do a push button deployment into the cloud, depending on the client’s preference of cloud provider. 95% of our customers are able to go from signature to revenue in under 30 days.”

Customer Base

Webscale’s initial focus was on the mid-market, predominantly storefronts using Magento. However, their most recent customers have been much larger and use WooCommerce, Magento, and RubyonRails or Java to customize as they don’t want to use off-the-shelf solutions. Webscale is e-commerce platform agnostic.

Webscale has built a strong customer base across small, medium and large digital storefronts. It is running more than 700 sites across many regions from mom-and-pop shops (up to $10K) to medium-sized businesses ($1-5M) to high-end. Big enterprises that are clients include Unilever (Murad), Hanes (Bras N Things), and Ferguson (Signature Hardware). As Webscale evolves, the size of companies it is going after has significantly increased. In the eCommerce market, some of Webscale’s companies are doing billions of dollars of transactions using its platform. Webscale is able to scale to infinity. “As much as a cloud resource is available, we will scale,” says Sonal.

In terms of competitors, Rackspace is probably its closest rival. AWS, by contrast, is a partner as are the other big cloud service providers as Webscale helps storefronts migrate from static hosting like Rackspace to AWS and the others. Shopify is also a competitor as it offers a services bundle to eCommerce, but they typically play in the SMB segment. Shehzad mentioned a recent customer that wanted to move out of Shopify as they had outgrown their Shopify store and needed more customizability, so they decided to build their own Magento site. They began to evaluate their Commerce Cloud platform and felt it was lacking, so moved to Webscale.

Webscale and Machine Learning

When we asked the team about machine learning (ML), Sonal explained that they do deep data analytics and ML on all their sites. “We see their performance not just at the front door. As you get deeper into a site, you can also see their product and category pages. We track a customer’s site not just based on static metrics. We track response time – how quickly every segment of your website responds to a customer. Based on that, our software automatically spins up additional instances of the cloud and provides more infrastructure at the web and application layer.” In case of viral marketing events, when storefronts all of a sudden get a million visitors, they would first fall down, then slowly trickle back up; but with Webscale, they are able to spin up additional instances to right away serve a much higher volume of traffic without ever slowing down. “We have 100% uptime on Black Friday. No one else can guarantee that,” adds Sonal.

Webscale is essentially a SaaS company addressing e-commerce infrastructure needs. They are able to see every session that enters the site, similar to a CDN and every session that goes through the site because they also run the company’s hosting (application backend). That allows the team to see what a good session – that leads to a transaction – looks like, and what a bad sesion looks like. Webscale uses ML to determine what an anomalous setting is, and block bad bots on the back-end, or take other such decisions.

Its WAF is deployed in a similar way to a CDN WAF. The programmable WAF offers all the traditional functionality of blacklisting and whitelisting, but it also has access to web controls, which allow you to take security measures and also perform traffic management across your site.

In Sonal’s words, “If you want to redirect a site to another country or slow down a session, you can do that. If you want to deliver a session, you can do that. You can use web controls to do all of that. You can use our traffic viewer to look at every single session. Webscale offers a single pane of glass that allows you to manage the whole site.”

We’ll look at a demo in a future post.

What’s Next?

When we asked Sonal and Shehzad what’s next and how long it might take to reach $100M, they said, perhaps 3-4 years to reach this kind of revenue.

Their immediate focus is to get as many sites as possible on Webscale and do profitable deals. After that, the company’s next biggest focus is its in-market learning. eCommerce has not been well understood as a vertical, but it is the only vertical that is growing at double digits. “Every company is becoming eCommerce – from e-learning to tech to SaaS to biotech companies”, says Sonal. “We are building what customers need to make this digital transformation successful.”

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