Security Startup Soha Raises $9.7M To Launch CSP Program

Cloud security startup Soha Systems emerged from stealth mode Tuesday with nearly $10 million in venture funding, and plans to build a cloud service provider (CSP) program.

The Sunnyvale, Calif.-based company said its security service -- which keeps bad guys out of customer applications deployed in any cloud computing environment -- doesn't expose the cloud network, can be set up in just 15 minutes and costs just a tenth as much as competing products.

"This product seems to have a massive 'wow' factor," Haseeb Budhani, co-founder and CEO of Soha, told CRN. "Once they see it in action, it's pretty awesome."

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Soha's product is particularly useful in restricting access that contractors have to computing environments that are also used by customers and employees. Soha can ensure that the contractor sees only the application he or she is working on and absolutely nothing else, Budhani said.

Enthusiasm around its product allowed Soha, a 30-person company, to complete a $9.7 million round of Series A funding led by investors Andreesen-Horowitz, Cervin Ventures, Menlo Ventures and Moment Ventures. The money was intended to be used for identifying Soha's market and building the vendor's services, objectives Budhani believes Soha has already accomplished.

Most products competing against Soha evolved from traditional data center offerings and are, therefore, box-oriented, requiring the customer to build the virtual appliance themselves in the cloud. Unlike these offerings, which can sometimes take a team of engineers months to get up and running, Budhani said Soha can be quickly installed without any technical background.

Although Budhani expects direct sales to be the thrust of Soha's go-to-market strategy for the next six months, he said he would eventually like to see 80 percent of product sales coming through the channel. For this reason, Budhani said Soha's sales organization has very few account executives.

"We want this to be a channel-focused business because we see the value in what they've done," Budhani said.

CSPs can expect margins of 30 percent because they are responsible for bringing customers to the table, Budhani said. Soha sells its offering as a recurring annuity service, Budhani said, with most end users finding a one-year deal ideal from a cost and predictability perspective.

Soha has shown its services to CSPs, he said, but doesn't expect to establish a relationship with any for another few months.

Soha already has more than 30 different enterprises testing its product, more than 10 of which are paying customers, Budhani said. Prospective customers are allowed to have five users test a single Soha application for as long as they would like, he said.

Soha struggled to find customers while in stealth mode because the vendor lacked any sort of web presence, Budhani said. Now that Soha has a website, Budhani said it should be far easier to customers to get additional information about the vendor.

Soha customers are typically enterprise rather than small or midsize businesses (SMB) and have existing deployments in Microsoft Azure or Amazon Web Services (AWS). Budhani said most enterprises like to use multiple cloud providers.

CSPs can tailor Soha to meet specific end-user needs, Budhani said. Channel partners, for instance, could integrate Soha with Ping or Octa to make it so that only certain portions of applications are exposed to outside users, Budhani said.

Budhani sees Soha as an essential tool in the workbench that CSPs bring to customers, enabling them to react to customer needs significantly faster. CSPs will find particular value in the Soha offering when their clients are migrating workloads to the cloud.

"Today, they [CSPs] provide solutions that take forever to deploy," Budhani said.

Soha's next steps include building a much larger sales and marketing presence, Budhani said. While no concrete plans are in the works for Series B funding, Budhani said another round could begin within the next four to six months.

"We're not banking on the next round anytime soon, because we're doing fine right now."