Densify Optimizes Cloud Usage and Helps Your Business Save Money
Densify is a company that has developed cloud optimization technology focused on tackling the skyrocketing costs of public cloud adoption. Recently, Densify launched a first-to-market artificial intelligence (AI) platform named Cloe (Cloud Learning Optimization Engine) -- which analyzes workloads using a machine learning to continuously learn enterprise application usage patterns and demands.
By enabling business applications to become self-aware, it gains insight on resources cloud providers like AWS, Microsoft Azure, and Google Cloud currently offer - as well as their pricing. Densify customers include Bank of America, Citi, Dell, Honda, HP, and IBM.
I spoke with Densify CEO Gerry Smith to learn more about Densify and how the company has evolved. After graduating with an engineering degree from the University of Toronto in 1987, Smith was unsure of his next move. This moment came during a critical time as he was contending with a sizable student loan debt while pining for the milestone shared by university friends that had reached in quickly securing new careers post-graduation. Smith eventually landed a job at a large company and began an MBA program part-time while spending nights programming, an endeavor he found more rewarding than he anticipated.
Growing eager to use his new skill, Smith left the company and had contemplated building his own software firm. Ultimately, he decided against it due to the oversaturation of similar companies in the industry. He then landed a position at Gore & Storrie, a small engineering consulting firm.
A few years later while still working for Gore & Storrie, he met Alan Foster and Paul Edwards. Together, the three implemented a services optimization solution and decided to co-found a new company named Changepoint.
“Talk about adding worry to nervousness,” said Smith. “Our first year was very successful as we were able to win several large accounts. Most of the revenue was generated through large engagements. Soon, I was running the company and wanting to conquer the world.”
Sadly, Foster had died of ALS less than two years after launch and Edwards continued in various roles before eventually exiting the company.
After running the business for four years, Smith transitioned it to a true software company and developed its own intellectual product that continues under the same company name today, Changepoint.com. Smith recalled developing Changepoint as a software company being an eight-year exertion that included raising $40 million.
The obvious next step? IPO.
In August of 2000, Smith was managing an investor roadshow as part of the typical process for seeking a public offering. Despite witnessing the Nasdaq seeing historic new lows, Smith had closed the roadshow in San Francisco somehow beating the odds by garnering the necessary commitment to list on the exchange.
"All I needed to do was sign on the dotted line and we would become a public company," elicited Smith. "I started a conference call to discuss the next steps with my board. It became a heated discussion as there were mixed opinions on what to do next.”
Smith had raised significant capital three months prior so the company had the flexibility to step away if needed. As the impassioned call carried on, he remembers an urgent interruption from his assistant where he had learned that his home was on fire. Thankfully, his family was safe but he reflected on the challenges of that particular afternoon.
Ultimately, they remained a private company and later sold to Compuware for $100 million. Smith pointed out that had they become public during that historic and infamous moment in tech history, the outcome likely ends much differently.
After one year working for Compuware and 8 months of what he christened "blissful, then boring nothingness," Smith became an investor and eventual CEO of Cirba, a 10-employee services company that was transitioning to software.
As CEO, Smith then decided to build software that added a specific type of intelligence to data Centers. The company was hoping to inject analytics to help improve the overall data center operations and in this case, it was to optimize the efficiency of physical infrastructure.
Ten years later, over 200 employees and $40 million raised since taking over Cirbam, Smith began moving the intellectual property to the cloud, focusing its IP on public cloud usage and rebranded as Densify.
“Interestingly, one of the best transitions I have ever made was moving to a software-led services company. Businesses want outcomes and in our case, that meant highly efficient public cloud usage,” Smith added. “We not only host and manage our analytics but we use it on our customer's behalf. No software, no manuals and no additional people – just outcomes.”
As a cloud optimization company, Densify helps the thousands of companies that use public clouds like Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform. While the public cloud is supposed to be cheaper, the costs will skyrocket if you aren’t an infrastructure expert. And even then, most will not keep up with the rapid pace of change in public cloud technologies.
“We offer a continuous optimization service leveraging both machine-learning analytics and assigned experts to automatically model cloud usage and proactively make changes that dramatically lower cloud costs,” Smith explained. “On average, customers experience 42% immediate savings in next month’s bill and for some, the saving is as high as 80%. In many cases, these savings are in the millions of dollars annually.”
Recently a customer connected their Amazon Web Services cloud to Densify and realized two valuable outcomes. Densify could reduce their cloud bill by over 55%, translating to savings of over $400,000 annually. Secondly, the customer discovered that they were making AWS purchase commitments (called Reserved Instances) for the wrong things.
What sets Densify apart from the competition is by delivering outcomes rather than software. Smith said businesses don’t want the associated maintenance, training and upgrades but rather the value that software delivers. “To that end, Densify not only hosts, manages, maintains and upgrades our software, we use it to deliver outcomes. For our customers, that means very significant savings on their cloud costs,” he concluded.