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Networking Unplugged

Perspectives on cloud networking and software-defined WANs

Posted March 07, 2013
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SpiceHeads: This Bud's For You!

To Mark Kleine (aka mpk) and all of the SpiceHeads who continue to contribute to Pertino's early success, we thank you! Together, you have a powerful voice that is being carried all the way to Silicon Valley and beyond as evidenced by the following article...

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Launched by Spiceworks, Pertino Raises $20M for Cloud Networking
Deborah Gage
March 07, 2013
(c) 2013 Dow Jones & Company, Inc.

Small businesses, with their small, overworked IT staff, need access to good new technology--and since their staff members have little time or money to go to technology conferences, they need to be able to learn it on the job.
 
Technology vendors have been working for years to reach these people, who may live in small towns or work at companies with minimal websites but whose numbers, in the millions, make them part of a big market.
 
Now two venture-backed companies--cloud networking startup Pertino Inc. and the IT social network Spiceworks Inc.--have banded together to solve this problem, in a relationship that the companies say continues to bring benefits to both.
 
Pertino, which emerged from stealth mode last month and on Thursday announced a $20 million Series B funding round led by Jafco Ventures, made Spiceworks an integral part of its strategy, beta-testing its cloud-networking software on 250 members of the Spiceworks community, who are known as Spiceheads, until they were satisfied that it worked. The software is now in limited release.
 
Using Pertino, anybody can create a global network with no specialized network hardware or virtual private networks. Instead, they type in their name and password and a network name and invite others to join by sending them a web link. When they're done with the network, they turn it off. Pertino works now on Windows 7, but support for Macintosh, other Windows clients and mobile devices is coming soon.
 
"The real key question we came up with is how do you build a network where everyone's always mobile and half the mobile resources are in the cloud. It changes the way you think about networks," said Pertino co-founder and Chief Executive Craig Elliott, adding that the software is especially appealing to small businesses.
 
Spiceworks, which Pertino found on its own, was a part of the startup's initial pitch to venture capitalists, Mr. Elliott said, because his team wanted to allay any concerns about Pertino's ability to reach small businesses.
 
As for Spiceworks, it found the relationship so fruitful that it's preparing to launch other startups, according to Vice President of Marketing Jay Hallberg .
 
The Spiceworks network, which has over 2.4 million members and is adding 2,500 new members a day, has helped EMC Corp ., Dell Inc ., and other big technology companies launch products, but it's now starting to get referrals from venture capitalists to launch startups, Mr. Hallberg said. It created a private community for Pertino, which Pertino continues to use, and it's now creating marketing plans for other startups, arguing that it can cut startups' time to market at a lower cost.
 
Spiceworks does not pay Spiceheads to test products, but Mark Kleine, the IT manager at McCoy Tree Surgery in Norman, Okla., said he was happy to be asked. He gets free use of Pertino's software for a year, he said, and "in our industry, people in my shoes can't learn enough or quickly enough."
 
Usually, beta testers don't talk to each other, he said, but the Spiceheads did, and they were a tough but enthusiastic crowd, coming up with new suggestions every time something about Pertino's software didn't work. "I was amazed at how rapid the development was," he said.
 
Both Norwest Venture Partners Managing Director Matt Howard and Lightspeed Venture Partners Partner Barry Eggers, who co-led Pertino's $7.85 million Series A round and participated in the Series B round, said they would have invested in Pertino anyway, even without the Spiceworks relationship, because the technology is so disruptive.
 
Jafco Ventures General Partner Jeb Miller said his firm was fortunate to win the right to lead Pertino's Series B round over more than a dozen other firms. "The world is moving toward cloud-based applications and services," he said.

Pertino has now raised $28.85 million, while Spiceworks has raised over $50 million. Valuations are not disclosed.

Todd Krautkremer

Todd Krautkremer

SVP, Strategy and Strategic Partnerships

Pertino is my 5th start-up since "doing time" at AT&T and Siemens. I thrive on building new market opportunities and speak networking, security, cloud, XaaS, mobile, Big Data, carriers, and чуть-чу́ть Russian.

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