A wave of corporate firms are gaining momentum with clients and investors for solutions to assist in controlling that consumption is emerging as cloud adoption keeps rising towards the $1 trillion barrier in yearly expenditure. Alkira, a firm offering “network infrastructure as a service,” recently received $100 million, enabling customers to manage hybrid cloud assets through virtualization and orchestration.
Leading this Series C is Tiger Global Management, with participation from former backers Dallas Venture Capital, Sequoia Capital, Kleiner Perkins, and KDT (Koch Disruptive Technologies), as well as other new backers NextEquity Partners and Geodesic Capital.
CEO Amir Khan is keeping the value of Alkira a secret, only stating that it is “certainly an upround.” Estimates from PitchBook recently valued Alkira at $234 million; however, this value came from a 2020 fundraising round, and the business has since expanded. Its clients include media (Warner Music), financial services (S&P), and industry (strategic backer Koch), and it has raised $176 million so far.
One of the trickier parts of the cloud revolution is the core of what Alkira is tackling. Customers usually use multiple vendors and, in many cases, run private, public, and on-premises servers all in tandem depending on their needs in order to hedge their bets, get the most competitive pricing by region, and lean into the most flexible arrangements.
But the trouble with that is that it may turn into an indigestible nightmare to purchase, prepare, and finally manage that dish of spaghetti. The surge in popularity of AI-based apps, which may require even more processing power and other resources, undoubtedly exacerbates this problem. Nevertheless, it has existed for years and will continue to, regardless of whether AI is here to stay.
As Khan explained to me, the foundation of Alkira’s distinctive strategy is the notion that, while end users negotiate and manage their own compute agreements, Alkira handles the architecture of those agreements, which essentially integrates them behind the scenes to enable management and viewing of them as a single service—a kind of massive-scale orchestration and virtualization of an organisation’s infrastructure. Khan assured me that Alira can integrate with all of the big cloud providers.
Then, it offers a variety of services related to that integrated, network-as-a-service experience, such as cloud backbone as a service (aimed at hyperscalers and heavy activity), extranet as a service (end-to-end secure connectivity for customers and other third parties, created as and when it’s necessary to interface with an organization’s core network), cloud “insights” (visibility services for ops people to get a complete picture of the availability and usage of cloud network resources), and secure connectivity (aimed at enabling secure remote VPN access
Khan says that a corporation may reduce years of integration and management labour into hours by using Alkira to manage its network assets.
As he remembered, one client had “a mess of day-to-day operation troubleshooting, visibility, and routing controls.” It was all very laborious, and creating that system took them two years. At our first meeting, we were able to duplicate all of that work in four hours while seated in a conference room in Reno, Nevada.
In addition to the business pitch, they emerged from that meeting with an investor: Koch Industries was the end customer.
Khan co-founded Alkira with his brother Atif, the CTO. The two have years of combined expertise in the telecom industry, which has proven to be an excellent training ground for the amazing fragmentation of the cloud computing environment of today. (“Alkira” is an Aboriginal term that means, approximately, “bright, blue sky” and refers to removing the darkness of the “clouds” of today.)
They earlier started another company that was more in line with the legacy networking market: in 2017, Cisco paid $610 million to purchase software-defined wide area networking expert Viptela.
Alkira is up against a whole new wave of potential rivals with this new move into cloud computing, although for now the biggest players—AWS, Azure, and Google—have not made much headway in collaborating, which leaves a huge gap for outside players to handle the virtualization and stitching on their behalf.
It is interesting to see Tiger Global leading this round. The company is still involved in investments, but as this table shows, its activity has really fallen over the previous two years, making this acquisition much more notable.
The combination of a track record of success and clear market potential seems to be what won Tiger this one. “The use of cloud and AI is driving up the complexity, velocity, and scale needs of network infrastructure,” said Tiger Global investor Rohit Iragavarapu in a statement. “We think Alkira’s visionary approach, market traction, and state-of-the-art technology put it in a strong position to seize the expanding potential of this quickly changing space.”
