The emergence of the first hyper-scale public cloud by AWS in 2006 has been a boon to companies looking to offset their datacenter costs, leading to explosive growth in cloud services.
Worldwide end-user spending on public cloud services is forecast to grow 20.7% to total $591.8 billion in 2023, up from $490.3 billion in 2022, according to the latest forecast from Gartner, Inc. The increase spending brought the challenge of managing that expense. According to Asim Razzaq, this lack of visibility into cloud spending was a problem for most enterprise companies.
Yotascle Founder and CEO Asim Razzaq.
Razzaq is the former head of platform engineering at Paypal and had personal experience with the challenge. So he decided to leave his safe engineering career to build a cloud management platform called Yotascale to solve the problem. This founder’s journey is based on my interview with Razzaq.
The Palo Alto, California-based Yotascale was formally founded in 2015. Before formally launching he wanted to make to make that his own experience wasn’t a market of one and conducted customer discovery with data engineers at many large companies.
“I'd seen enough startups to know that you can't just blindly do this stuff. And company after company told me this is a big problem. They like the idea of the cloud, but had no idea where their money was going.That was the genesis for my conviction that now's the time. So I took the plunge. If you have that in you to go change the world, then you should go give it a shot and not be afraid of failure. Because failure is always a possibility. So it's a real calculated risk,” says Razzaq.
After initially bootstrapping the company, Yotascale developed acceptance and market adoption by many of those enterprise companies Razzaq originally spoke to in deciding to launch the business. Today, Yotascale is deployed by world-class engineering teams at companies like Zoom, Hulu, Okta, Compass and Klarna. Still a relatively small team at 50 or so employees, the company doubled its annual run rate last year and net dollar retention was 184%, meaning they were able to both retain every customer, but also upsell them, according to Razzaq.
As a result, the company has raised a total of $24. 6 million in funding over four rounds. Their latest funding was raised in October of 2020 from a Series B round led by Felicis Ventures. Additional investors include Crosslink Capital, Pelion Venture Partners and Engineering Capital and others
According to Razzaq, the company name stems from the term “yottabyte”, which is the largest unit approved as a standard size by the International System of Units and represents a storage volume equivalent to a quadrillion gigabytes (GB) or a million trillion megabytes. He couldn’t afford the yottabyte domain name, so he dropped a “T” to become Yotascale.
“Our ethos has been empowering engineering teams, because cloud computing can be expensive. Once thought of as a finance problem, the complexity of infrastructure and software that we're seeing, it’s ultimately, engineers and engineering leaders that are in the driving seat of making day-to-day decisions on how to manage spending. And so our goal is to empower them at the edges, give them the right information at the right time, so they can make the right decision on how to make a performance-availability cost trade off,” says Razzaq.
For someone who has spent most of his career as an engineer working for others, Razzaq has thought a lot about entrepreneurship. He believes there’s a dearth of entrepreneurs and that the practice should be taught in elementary school. He also refers to the book, The Founder’s Dilemma, as a source of inspiration and perspective. The book concludes that there must be an overlap between human capital, financial capital and social capital in order to be successful and asks would-be entrepreneurs to be honest with themselves about the personal sacrifice required. “Do you really have the ingredients to be an entrepreneur founder or not? You have to be honest and truthful with yourself when you are reading it alone. You're in the trenches. And it is competitive. And you really have to roll up your sleeves and really push yourself beyond anything you've imagined,” says Razzaq.
Razzaq grew up in Lahore, Pakistan where he had shown an aptitude for math. “My father is a chartered accountant, so math was part and parcel of our family life. My second love was physics. I initially started pursuing a degree in physics and maths. And then in college, I took a computer science class and I just fell in love with it,” says Razzaq.
In Pakistan, Razzaq was educated at a competitive high school with alumni that took paths to the U.S. or the UK for university. He chose to attend the University of Texas in Austin, Texas because he already had family in the U.S. He graduated with a bachelor’s degree in computer science and landed a job as a lead architect at a start-up where he began to see the challenges of managing data center costs. He had his first stint at Paypal in 2007 leaving in 2011 to join eBay, followed by a time at Axcient before returning to PayPal as Senior Director of Platform Services Engineering in 2013. He then left to found Yotascale in 2015.
As for the future? “Another key thing on our radar, which is actually pretty close to my heart, is the environmental aspect. Digital infrastructure is the modern day smokestack. We believe we are positioned well to help affect change there,” concludes Razzaq.
