Organizations that move their operations to cloud computing infrastructure miss out on many of the perceived benefits of this move because they don’t know how to manage their new arrangements. So says tech start-up Lucidity, which today announced a $5.3 million seed funding round to expand its business of cloud management solutions to address this problem.
“The cloud is not a magic bullet that automatically solves all your technology problems,” warns Nitin Bhadauria, co-founder of Lucidity. “In many cases, companies are simply scaling up their existing processes and systems and moving them to the cloud; they end up with many of the same problems and challenges.”
The result is disappointment, Bhadauria warns. “CIOs promise their CFOs significant returns from the cloud, but many of them fail.”
In addition, this is a growing problem. The move to the cloud has accelerated tremendously over the past three years, with three clear drivers prompting organizations to move away from on-premises solutions.
Firstly, the huge explosion in data volumes, especially during the Covid-19 pandemic and its aftermath, has enormously increased the demands on companies’ data centers and systems. Second, it has become more difficult to respond to this demand given a global semiconductor shortage that has limited hardware availability. And thirdly, many companies shy away from the high capital investments that the data explosion requires; Shifting to cloud agreements effectively allows them to transition to managing this technology through operational expenses.
Indeed, the leap to the cloud — mimicking the cloud-native businesses that have emerged over the past 15 years and have avoided on-premises solutions entirely — offers a potential path to addressing these issues. But that journey needs careful planning and management, warns Vatsal Rastogi, co-founder of Lucidity.
“Eight out of ten companies just lift and move,” he warns. “But to deliver the returns that businesses are chasing, you need cloud storage that’s intelligently managed.” The analogy, he suggests, is someone moving to lower their rent, only to find it’s him Worse because his furniture needs replacing or because he has a longer commute to work. The move must be planned in the round.
The biggest problem, according to Lucidity, is that many companies pay way too much for cloud storage, fearing the possibility of an outage if their data suddenly or unexpectedly increases. Oversupply of this kind averages 70%, Lucidity argues, and even then, outages still happen. And with an acute shortage of cloud specialists worldwide in the technology sector, most organizations cannot address these issues themselves.
This is where Lucidity believes its product can help. It’s a software solution that sits on top of customers’ cloud arrangements and manages storage to automatically scale in size as needs demand, in real time. In one fell swoop, customers can get rid of their oversupply, Lucidity argues, while ensuring there are no outages at all.
“Manual cloud management wastes 70% of storage costs,” says Rastogi of the savings he believes Lucidity can deliver. The company also prides itself on its low-maintenance model — it says installation takes around 15 minutes, with an extra hour for configuration, after which the software runs automatically with no further intervention required. Lucidity describes its approach as “NoOps”.
Launched in 2021, Lucidity took around nine months to develop its solution and has been working with a small number of companies since earlier this year, with nine customers now working in different areas of product delivery. The solution is industry and geographic agnostic, although Lucidity is particularly focused on the North American market and seems to attract the most interest from companies in the financial services, retail, technology, media and entertainment sectors.
The next phase for the company is further product development and building awareness and understanding with potential customers. “Nine out of ten companies don’t realize how much money they’re wasting,” says Bhadauria.
Today’s fundraising will help in this regard by providing funds for Lucidity to invest in expanding its engineering and development capabilities 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. A $500,000 pre-seed round follows, 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,” said Andrew Martinez of AlphaWave. “This is not just a theoretical concept, but something that will be fully demonstrated as proof of concepts with customers now embarking on the Lucidity platform.”