Businesses moving their operations to cloud computing infrastructure are missing out on many of the supposed benefits of this shift because they don’t know how to manage their new arrangements. So says technology start-up Lucidity, which is today announcing a $5.3 million seed funding round as it seeks to scale up its business offering cloud management solutions to tackle this issue.
“Cloud is not a magic bullet that will automatically solve all your technology problems,” warns Nitin Bhadauria, one of Lucidity’s co-founders. “In many cases, companies are just lifting their existing processes and systems, and shifting them to the cloud; they end up with many of the same problems and challenges.”
The result is disappointment, Bhadauria warns. “CIOs are promising their CFOs significant returns on investment from cloud, but many of them are failing to deliver.”
Moreover, this is a growing problem. The move to cloud has hugely accelerated over the past three years, with three clear drivers prompting organisations to shift away from on-premise solutions.
First, the huge explosion in data volumes, particularly during the Covid-19 pandemic and its aftermath, has hugely increased the demands on organisation’s data centres and systems. Second, it has become more difficult to respond to that demand amid a global shortage of semiconductors, which has limited the availability of hardware. And third, many companies are in any case reluctant to make the large capital investments that the data explosion requires; shifting to cloud arrangements effectively enables them to switch to managing this technology through operating expenditure.
Making the leap to cloud – mimicking the cloud-native businesses that have sprung up over the past 15 years and avoided on-premises solutions altogether – does indeed offer a potential route through these issues. But that journey must be planned and managed carefully, warns Lucidity co-founder Vatsal Rastogi.
“Eight in 10 organisations simply lift and shift,” he warns. “But to deliver the returns organisations are chasing, you need cloud storage that is managed smartly.” The analogy, he suggests, is to someone who moves house to reduce their rent, only to discover they are worse off because their furniture has to be replaced or they have a longer commute. The move has to be planned in the round.
The biggest problem, Lucidity believes, is that many organisations are paying for far too much cloud storage because they fear the possibility of an outage if their data spikes suddenly or unexpectedly. Over-provisioning of this type averages 70%, Lucidity argues, and even then, outages are still occurring. And with an acute shortage of cloud specialists worldwide in the technology sector, most organisations cannot confront these issues for themselves.
That’s where Lucidity believes its product can help. It’s a software solution that sits on top of the customers’ cloud arrangements, managing storage so that it automatically scales in size as demands on it require – and does so in real time. At a stroke, customers can dump their over-provisioning, Lucidity argues, while ensuring there will be no outages at all.
“Manual cloud management is leading to the wastage of 70% of storage costs,” Rastogi says of the savings he believes Lucidity can deliver. The company is also proud of its low-maintenance model – it says installations take around 15 minutes, with an additional hour of configurations, after which the software runs automatically with no need for further intervention. Lucidity describes its approach as “NoOps”.
Launched in 2021, Lucidity took around nine months to build its solution, and has been working with a small number of enterprises since earlier this year, with nine customers now at different stakes of product deployment. The solution is sector and geography agnostic, though Lucidity is focused particularly on the North American market and appears to be attracting most interest from businesses in financial services, retail, technology, media and entertainment.
The next stage for the business is further product development and building awareness and understanding among potential customers. “Nine in 10 businesses don’t realise how much money they’re wasting,” Bhadauria says.
Today’s fund-raising will help in this regard, providing Lucidity with funding to invest in expanding its engineering and development capacity through recruitment, as well as in its go-to-market strategies.
The company’s seed round is led by AlphaWave Investments, with participation from Beenext, Blume Ventures, BoldCapital, NuVentures and Sparrow Capital. It follows a $500,000 pre-seed round led by Beenext in 2021.
”Lucidity makes cloud storage management more streamlined and reliable, and also increases cloud storage performance while saving a significant amount of money,” says AlphaWave’s Andrew Martinez. “This isn’t just a theoretical concept, but something on full display as proof of concepts with customers now onboarding on the Lucidity platform.”