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Locking Down the Enterprise Cloud while Keeping It Simple and Easy to Use; Interview with GroupLogic, Part II

Earlier this year, DCIG interviewed the executive team at GroupLogic, which provides products designed to facilitate communication and collaboration in private cloud file-sync-and-share. Part 1 of this interview series focused on the history of the company and its flagship product, activEcho.

In part 2, we continue our discussion with GroupLogic’s Anders Lofgren, Vice President of Marketing and Product Management, by exploring licensing options and how the enterprise mobility space has opened up a new market for the company. As well, we dig deeper into activEcho and learn how it is designed to provide flexible and secure file-sync-and-sharing in the enterprise IT organization while being as simple and easy to use as one of the most popular–but unsecure–consumer grade file-sync-and-share cloud services today.

Joshua: Can you explain licensing model, e.g. enterprise licensing, direct sales, channel?

Anders: So, the best way to describe this business is, it’s a volume business. So we sell licenses all day long. Some of those licenses are sold directly through our website. Some of them are sold via our telesales force. And some of them are sold through distribution, particularly international.

So our licensing model is really twofold. We have a simple per-server perpetual license model that’s sold based on a single server, based on client connections. We also sell enterprise licenses that are a subscription-based license model that’s based on user counts.

So, for organizations that have lots and lots of servers and the predictability associated with their user count, it’s going to be more stable in the future. They will typically opt for what we call an enterprise license or a subscription license. Or, for smaller organizations that only have a single server or a small number of constituents that are going to use the software, they would opt for the perpetual licensing model.

Joshua: Would you characterize the bulk of your customer base as being those enterprises that are supporting the Apple Mac, and you’re growing the business around this mobility platform?

Anders: What the mobility platform has really done for us is expanded our addressable market. When we went through this process and we introduced mobileEcho, we actually assumed that the pejorative amount of license sales that we would have done would have come from our existing customer base, which are strongly represented by the heavy Mac users for business purposes.

What we found is that we’ve had the opportunity do business with organizations that we’d never done business with in the past. Because mobility really operates independently of use of Macs in the enterprise, that for us is actually very pleasant news because it gets away from a dependence on organizations that are using Macs in an important way and puts us in a space that we believe is much larger, growing much faster, and representing a larger potential customer pool for us to operate in.

Joshua: That is a natural product progression, can you characterize the solutions currently available.

Anders: So, the two solutions right now … are, first, mobileEcho 3.5, which is the new version of our mobileEcho product, which is basically mobile file management. It provides secure file server access for enterprise mobility users.

There are a number of new features we’re introducing. I’m not going go through it because I’m going to focus on another product. But suffice it to say, the new features are around security, we’re introducing two-way syncing, we’re introducing integration partnership with Quickoffice, the product we introduced last May.

But what I really want to focus on today is the product that’s new for us, activEcho. activEcho is basically enterprise file sharing that’s designed to address the security management infrastructure flexibility needs required by the enterprise IT [information technology] organization.

So, the problem as we see it today is that all these people … want to share. And it’s not just employees that want to share data with employees; it’s corporations who want to share data with their employees, with their partners, and with their customers. And employees want to share with their customers and with other partners, and so on and so forth.

It’s complicated by the fact that we live in this three-device world today. We have smart phones, we have tablets, and we have laptops. One could argue maybe it’s even four devices because you’ve got a home PC and you’re working on that, as well.

So that all becomes very complicated, then, when you want to basically access, share and collaborate on files. And the problem is that the current solutions, many are designed for consumers such as Dropbox–that’s the one we would pinpoint as being the target here–really do not meet all the critical enterprise requirements.

The business users just want a very simple way to access, share and collaborate. I would argue that Dropbox is probably as simple as you can get from that point of view. I believe our solution is just as simple.

Plus, we add the three critical things that I believe Dropbox does not add. These are things that enterprises really require. They need the security, they need the management, and they need the flexibility. And that’s what activEcho is all about.

So, a little bit more about the Dropbox problem. [There are] problems with Dropbox with exposure of passwords or passwords being optional. We have customers that we talk to; they’re blocking Dropbox or in some cases the IT guys are just turning a blind eye because they just don’t have an alternative solution up until now to offer their end users.

It’s a real problem, because you’ve got data leakage issues, you’ve got files going in and out of the organization and you have no control, you don’t have any insight into what’s going in or out or who it’s being shared with. This is not something that a large corporation–especially if you want to talk about regulated industries, anything like financial, healthcare, anything like that–they do not want people using Dropbox.

Joshua: The most basic option today is wiping a device after it connects to an email system, but what about the silent hacking. For example, someone loses their password to a Dropbox account. Dropbox doesn’t tell them about it. And you’ve got people just reading the data that they add daily without doing any compromising of the data.

Anders: Exactly. And this is just not a problem about mobile devices. The mobile device use case is actually one fixed-use case we see for this product today.

So again, the solution for us is activEcho, the industry’s only enterprise file sharing solution that truly addresses the needs of enterprise IT. Those needs being security, management and infrastructure flexibility. That’s going to be our mantra with this product.

We have a Windows and Mac client for people to use this on desktops or laptops. There’s an iPad client interface for people who are using this on the iPad or on the iPhone. We have a web client interface. And then there’s a management interface for people from the IT administrator’s viewpoint, people actually managing this stuff, because that’s really what the secret sauce is to the people who are looking at acquiring this particular solution.

I also want to note that this product’s already been in beta for quite some time. We have over 40 organizations in the beta today. I wouldn’t say we have any small companies in there, but we have some school systems, we have one extremely large bank–it’s probably one of the top 10 financial institutions in the world today.

We have a very large pharmaceutical company. There’s industrial. It kind of runs the gamut.

We haven’t really been focused on any one particular vertical. I would say we do expect regulated industries
to dominate it only because of the security capabilities that we bring forth the other players just can’t touch.

Joshua: Did you design an iPad client, or did you design an iPhone client and it just works on the iPad?

Anders: We have another product called mobileEcho. activEcho uses the same iPad client as mobileEcho. So we have one client for a company to download, and they can use either mobileEcho, activEcho, or both.

The reason we did that was simplicity. We didn’t want to basically convolute every end user with a multiple client, and in fact the large financial institution I was referring to is actually already a client on mobileEcho and they’re going to buy this product. It makes it all simpler for them when they’re rolling it out to 3,000 people.

Joshua: So you are saying the client was designed for an iPAD?

Anders: The client for the iPad was custom designed for the iPad. The client for the iPhone was custom designed for the iPhone. And soon there’ll be a client for the Android that is designed for that platform, as well. They’re specific to the device so that … you don’t get into the issue that you’re bringing up.

Joshua: how are you addressing integration with LDAP (Lightweight Directory Access Protocol) and are you dealing with encryption, how are you dealing with things like multitenancy and the hosted solution?

Anders: Right. … So we integrate right into Active Directory [AD] just like mobileEcho does. We do use encryption, especially on the iPad and the iPhone or any mobile device. Those are the ones we support today.

And we are a software solution. We sell software to the enterprise and then they will decide where they want to run it. They can actually run this on on-premise servers, or they can make the data repository on a NAS [network-attached storage] device, or they could actually put it up on Amazon S3 if they want to. In fact, we run some of our internal implementations that way here.

And so we give the customer the choice–again, the flexibility notion I mentioned earlier–to choose which model is best for them. They run it, they purchase the software from us and then they decide what the best implementation is.

Joshua: Is activeEcho a hybrid cloud implementation, e.g. can an enterprise have some data stored in the data center and some data stored in the cloud?

Anders: The way to do it today would have to be with two instances, unfortunately. But we have actually not seen that request yet. That would imply that they have different groups of people with different needs because they have different security and availability requirements.

So today and when we go general availability (GA) in a few weeks, you’d actually have two separate instances. But again, we haven’t heard that requirement yet.

But in the future, we will be able to have a thing where we have multiple servers with a centralized management capability. So if you want to put some people in the cloud and you want to put some people on premise, based on role–for example, finance people go there, every other Joe Schmoe goes up in the cloud–that’s something that we’ll be able to do for that one single point of management.

Joshua: I think that’s a fair response. I just wanted to check on it because when I look at things like VMware [Project] Octopus and Citrix ShareFile, one of the things that people talk about in the space when they’re looking at these is they like the option that some of the data can be hosted.

Then there’s some sort of information governance or information management model inside of the enterprise that will set up a portion of it so that it’s accessible from a specific data center in Dallas or New York or San Francisco or whatever makes sense?

Anders: Correct. So again, the design point for everything we do is that we don’t presuppose that we understand the specific policies of any one customer.

Our design point is to give the customers the choice to make sure that what we provide fits what they’re doing. So then they can choose to turn some functions on and some functions off, some stuff goes in the cloud, some stuff doesn’t. That’s where we come from.

That’s the flexibility notion that I think is very different from the cloud providers who basically tell you it’s one way or the highway. It’s in the cloud–and you don’t even know what’s going on up there–or you’re not using our service at all. For enterprise, that just doesn’t work.

Joshua: Regarding LDAP integration, if someone types in the password to access activEcho incorrectly three or four times. Is that going to trigger the enterprise lockdown policy and prevent that account from logging in further?

Anders: Correct. Basically what we do is we talk to Active Directory and whatever AD says or enforces, we inherit. You move a user from one Active Directory group to another one, you hire somebody, you fire somebody. You don’t need to worry about doing anything special in activEcho to manage user accounts and life cycle for that.

In part III of this interview series with GroupLogic, we will cover what the company discovered during a recent analyst tour and how it disregards product development in favor of “customer development” to drive innovation that is more useful to its customers.

Joshua L. Konkle

About Joshua L. Konkle

Vice President DCIG, LLC Joshua Konkle is Vice President at DCIG LLC, an independent storage analyst and consulting firm. Mr. Konkle has been a business advisor with them since September 2006.

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