BetterCloud Raises $25 Million From Accel To Create Universal Tools For Monitoring The Office Cloud

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The cloud revolution continues to gobble up old players, and none more so than in office productivity. Microsoft, once the Borg of office software with its Office and Exchange products, has faced immense competition to its Office 365 online subscription service from Google and now even from Apple, which brought its own online versions of Pages and Numbers out of beta last month.

That competition has been great for corporate IT departments in providing choice, but the diversity of options has also dramatically increased the complexity of managing these clouds within a corporate environment. Identities need to synchronize across platforms, and monitoring the performance and security of these services is challenging, particularly in a time of austerity in many IT budgets.

In short, managing multiple clouds – or even just one – requires a whole new set of tools.

BetterCloud, armed with a new $25 million round of funding from Accel’s growth fund, hopes to be that one-stop shop for management tools of cloud productivity software.

Founded three years ago, the startup was once exclusively focused on Google Apps, providing the sort of management and monitoring infrastructure that had made Office and Exchange such a success in the enterprise.

Organizations are not limiting themselves to one cloud, though, and are instead signing up for multiple services as they attempt to meet the needs of their users. Last month, the company launched a private beta of its product on top of Office 365, allowing an IT department to use just one set of monitoring tools to operate their entire office productivity infrastructure.

Not surprisingly given its venture funding, adoption of its service has continued to grow rapidly. The startup has grown to 50,000 companies on the platform, up from 15,000 in early 2013, and more than 1,000 companies have already signed up for its Office 365 beta. The company, which splits its workforce roughly equally between New York and Atlanta, tripled its headcount in 2014, and the hiring spree looks set to continue.

David Politis, the CEO and founder of the startup, argues that there is a unique opportunity for new players to build on top of the transition to the cloud. “If you think about it, the last major shift in office productivity was Exchange coming into email as the de facto platform,” he explained to me. The cloud will change the way that every office worker operates, and “these [cloud applications like Office 365 and Google Apps] are going to be the hub, and the rest of the applications will be the spoke.”

That’s what attracted Accel to the deal. Arun Mathew, a principal at the firm, said that, “There is a white space in the market for an independent third party that focuses on this problem, and it is becoming increasingly more strategic.” Authentication is increasingly held by one of these two core services, and that means that monitoring them for security and compliance is crucial, particularly as the risk of cyber attacks increases.

Where BetterCloud really shines though is the way it is thinking about using its customer data to increase the ease of detecting problems. Unlike software-based monitoring software, BetterCloud is able to identify anomalies in an organization’s own data usage patterns to alert IT about potential problems through its “Domain Health and Insights” dashboard. For instance, it can compare the percentage of public versus private files in a company’s intranet to the averages across its other customers, indicating that there might be a problem with its access policies.

With its new round of funding, the company looks to continue expanding these insights for its consumers. “We can be proactive and proscriptive, and a lot of that just requires development,” Politis said. He noted that BetterCloud already manages more than 2 billion documents, and so the challenge isn’t collecting data on usage, but turning that data into something more meaningful. In addition, the company hopes to continue to expand its feature set and bring its Office 365 product out of beta.

One concern I asked about, and one that Accel certainly thought about when looking at the startup for investment, was whether these sorts of management tools would eventually be provided by Microsoft or Google themselves.

Politis noted that these software services have traditionally been very profitable on top of Office. “There are economies around these major platforms, and I don’t think that is going to change,” he told me. More importantly, the companies are almost certainly never going to work well with each other’s cloud products, necessitating an independent third-party provider.

The company’s total funding now sits at $47 million. In addition to Accel, this latest round also had participation from existing investors Flybridge, Greycroft, Tribeca Venture Partners, New Amsterdam Growth Capital, and Millennium Technology Value Partners.

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