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How to win consulting, board and deal roles with PE and VC funds

Published June 2, 2021

David Teten
Contributor

David Teten is founder of Versatile VC and writes periodically at teten.com and @dteten.

Expert networks

Expert network firms source subject matter experts from various domains and pair them with clients seeking topical or industry insights. They typically charge clients up to $1,200 per hour, and pay the expert $100 to $500 an hour. I founded Circle of Experts, an expert network that I sold to Evalueserve.

The expert network industry has grown an average 4.5% annually between 2015 and 2020, its market size topping $1.3 billion in 2020. While the major clients were initially hedge funds and private equity firms, consulting firms now comprise 32% of total demand for expert network services.

Inex One, an expert network marketplace, has compiled a list of 80 expert networks, summarized in the graphic below:

Image Credits: Inex One and Integrity Research

The largest expert networks include: GLG, which accounts for approximately 50% of the industry’s revenue; AlphaSights is the second biggest generalist expert network; Guidepoint services six major categories of clients globally across several industries; and Third Bridge hires and retains talent to “democratize the world’s human insights and upend the traditional research model.”

Other notable expert networks include Atheneum Partners, Coleman Research Group, Dialectica, ENG, Lynk Global, Mosaic, PreScouter, ProSapient and Tegus. There are also expert networks with sector or geography specialization. For example, SERMO is a global social media network for physicians to exchange knowledge and share challenging patient cases, and Clarity.fm connects startups to experts in building new businesses.

With buyout, Cloudera hunts for relevance in a changing market

Published June 2, 2021

When Cloudera announced its sale to a pair of private equity firms yesterday for $5.3 billion, along with a couple of acquisitions of its own, the company detailed a new path that could help it drive back toward relevance in the big data market.

When the company launched in 2008, Hadoop was in its early days. The open-source project developed at Yahoo three years earlier was built to deal with the large amounts of data that the internet pioneer generated. It became increasingly clear over time that every company would have to deal with growing data stores, and it seemed that Cloudera was in the right market at the right time.

And for a while things went well. Cloudera rode the Hadoop startup wave, garnering a cool billion in funding along the way, including a stunning $740 million check from Intel Capital in 2014. It then went public in 2018 to much fanfare.

But the markets had already started to shift by the time of its public debut. Hadoop, a highly labor-intensive way to manage data, was being supplanted by cheaper and less complex cloud-based solutions.

“The excitement around the original promise of the Hadoop market has contracted significantly. It’s incredibly expensive and complex to get it working effectively in an enterprise context,” Casey Aylward, an investor at Costanoa Ventures told TechCrunch.

The company likely saw that writing on the wall when it merged with another Hadoop-based company, Hortonworks, in 2019. That transaction valued the combined entity at $5.2 billion, almost the same amount it sold for yesterday, two years down the road. The decision to sell and go private may also have been spurred by Carl Icahn buying an 18% stake in the company that same year.

Looking to the future, Cloudera’s sale could provide the enterprise unicorn room as it regroups.

Patrick Moorhead, founder and principal analyst at Moor Insight & Strategies, sees the deal as a positive step for the company. “I think this is good news for Cloudera because it now has the capital and flexibility to dive head first into SaaS. The company invented the entire concept of a data life cycle, implemented initially on premises, then extended to private and public clouds,” Moorhead said.

How to ensure data quality in the era of Big Data

Adam Ronthal, Gartner Research VP, agrees that it at least gives Cloudera more room to make necessary adjustments to its market strategy as long as it doesn’t get stifled by its private equity overlords. “It should give Cloudera an opportunity to focus on their future direction with increased flexibility — provided they are able to invest in that future and that this does not just focus on cost cutting and maximizing profits. Maintaining a culture of innovation will be key,” Ronthal said.

Which brings us to the two purchases Cloudera also announced as part of its news package.

If you want to change direction in a hurry, there are worse ways than via acquisitions. And grabbing Datacoral and Cazena should help Cloudera alter its course more quickly than it could have managed on its own.

“[The] two acquisitions will help Cloudera capture some of the value on top of the lake storage layer — perhaps moving into different data management features and/or expanding into the compute layer for analytics and AI/ML use cases, where there has been a lot of growth and excitement in recent years,” Aylward said.

Chandana Gopal, research director for the future of intelligence at IDC, agrees that the transactions give Cloudera some more modern options that could help speed up the data-wrangling process. “Both the acquisitions are geared towards making the management of cloud infrastructure easier for end-users. Our research shows that data prep and integration takes 70%-80% of an analyst’s time versus the time spent in actual analysis. It seems like both these companies’ products will provide technology to improve the data integration/preparation experience,” she said.

The company couldn’t stay on the path it was on forever, certainly not with an activist investor breathing down its neck. Its recent efforts could give it the time away from public markets it needs to regroup. How successful Cloudera’s turnaround proves to be will depend on whether the private equity companies buying it can both agree on the direction and strategy for the company, while providing the necessary resources to push the company in a new direction. All of that and more will determine if these moves pay off in the end.

Cloudera to go private as KKR & CD&R grab it for $5.3B

OroraTech’s space-based early wildfire warnings spark $7M investment

Published June 2, 2021

With wildfires becoming an ever more devastating annual phenomenon, it is in the whole planet’s interest to spot them and respond as early as possible — and the best vantage point for that is space. OroraTech is a German startup building a constellation of small satellites to power a global wildfire warning system, and will be using a freshly raised €5.8 million (~$7 million) A round to kick things off.

Wildfires destroy tens of millions of acres of forest every year, causing immense harm to people and the planet in countless ways. Once they’ve grown to a certain size, they’re near impossible to stop, so the earlier they can be located and worked against, the better.

But these fires can start just about anywhere in a dried out forest hundreds of miles wide, and literally every minute and hour counts — watch towers, helicopter flights and other frequently used methods may not be fast or exact enough to effectively counteract this increasingly serious threat. Not to mention they’re expensive and often dangerous jobs for those who perform them.

OroraTech’s plan is to use a constellation of about 100 satellites equipped with custom infrared cameras to watch the entire globe (or at least the parts most likely to burst into flame) at once, reporting any fire bigger than 10 meters across within half an hour.

Screenshot of OroraTech wildfire monitoring software showing heat detection in a forest.

Image Credits: OroraTech

To start out with, the Bavarian company has used data from over a dozen satellites already in space, in order to prove out the service on the ground. But with this funding round they are set to put their own bird in the air, a shoebox-sized satellite with a custom infrared sensor that will be launched by Spire later this year. Onboard machine learning processing of this imagery simplifies the downstream process.

Fourteen more satellites are planned for launch by 2023, presumably once they’ve kicked the proverbial tires on the first one and come up with the inevitable improvements.

“In order to cover even more regions in the future and to be able to give warning earlier, we aim to launch our own specialized satellite constellation into orbit,” said CEO and co-founder Thomas Grübler in a press release. “We are therefore delighted to have renowned investors on board to support us with capital and technological know-how in implementing our plans.”

Mockup of an OroraTech Earth imaging satellite in space.

Image Credits: OroraTech

Those renowned investors consist of Findus Venture and Ananda Impact Ventures, which led the round, followed by APEX Ventures, BayernKapital, Clemens Kaiser, SpaceTec Capital and Ingo Baumann. The company was spun out of research done by the founders at TUM, which maintains an interest.

“It is absolutely remarkable what they have built up and achieved so far despite limited financial resources and we feel very proud that we are allowed to be part of this inspiring and ambitious NewSpace project,” APEX’s Wolfgang Neubert said, and indeed it’s impressive to have a leading space-based data service with little cash (it raised an undisclosed seed about a year ago) and no satellites.

It’s not the only company doing infrared imagery of the Earth’s surface; SatelliteVu recently raised money to launch its own, much smaller constellation, though it’s focused on monitoring cities and other high-interest areas, not the vast expanse of forests. And ConstellR is aimed (literally) at the farming world, monitoring fields for precision crop management.

With money in its pocket Orora can expand and start providing its improved detection services, though sadly, it likely won’t be upgrading before wildfire season hits the northern hemisphere this year.

Satellite Vu’s $5M seed round will fuel the launch of its thermal imaging satellites

Deep Science: Introspective, detail-oriented and disaster-chasing AIs

Confluent’s IPO brings a high-growth, high-burn SaaS model to the public markets

Published June 2, 2021

Confluent became the latest company to announce its intent to take the IPO route, officially filing its S-1 paperwork with the U.S. Securities and Exchange Commission this week. The company, which has raised over $455 million since it launched in 2014, was most recently valued at just over $4.5 billion when it raised $250 million last April.

What we can see in Confluent is nearly an old-school, high-burn SaaS business. It has taken on oodles of capital and used it in an increasingly expensive sales model.

What does Confluent do? It built a streaming data platform on top of the open-source Apache Kafka project. In addition to its open-source roots, Confluent has a free tier of its commercial cloud offering to complement its paid products, helping generate top-of-funnel inflows that it converts to sales.

Kafka itself emerged from a LinkedIn internal project in 2011. As we wrote at the time of Confluent’s $50 million Series C in 2017, the open-source project was designed to move massive amounts of data at the professional social network:

At its core, Kafka is simply a messaging system, created originally at LinkedIn, that’s been designed from the ground up to move massive amounts of data smoothly around the enterprise from application to application, system to system or on-prem to cloud — and deal with extremely high message volume.

Confluent CEO and co-founder Jay Kreps wrote at the time of the funding that events streaming is at the core of every business, reaching sales and other core business activities that occur in real time that go beyond storing data in a database after the fact.

“[D]atabases have long helped to store the current state of the world, but we think this is only half of the story. What is missing are the continually flowing stream of events that represents everything happening in a company, and that can act as the lifeblood of its operation,” he wrote.

That’s where Confluent comes in.

But enough about the technology. Is Confluent’s work with Kafka a good business? Let’s find out.

Apple’s App Store facilitated $643 billion in commerce, up 24% from last year

Published June 2, 2021

In its antitrust trial with Epic Games, which has just adjourned, Apple argued it doesn’t evaluate its App Store profit and loss as a standalone business. But today, the company put out new figures that indicate it does have a good understanding of the money that flows through its app marketplace, at the very least. The company has now released an updated version of a study performed by the economists at the Analysis Group, which claims the App Store ecosystem facilitated $643 billion in billings and sales in 2020, up 24% from the $519 billion seen the year prior. The new report focuses on the pandemic impacts to apps and the small business developers the App Store serves, among other things.

It also noted that about 90% of the billings and sales facilitated by the App Store actually took place outside its walls, meaning Apple took no commission on those purchases. This is up from the 85% figure reported last year, and is a figure Apple has been using in antitrust battles to paint a picture of an App Store that facilitates a lot commerce where it doesn’t take a commission.

The study then broke down how the different categories of App Store billings and sales were distributed.

Apple takes a commission on the sales of digital goods and services, which were $86 billion in 2020, or 13% of the total. But another $511 billion came from the sale of physical goods and services through apps — think online shopping, food delivery, ride hailing, etc. — or 80% of the total. These aren’t commissioned. And $46 billion came from in-app advertising, or 7% of the total.

Tim Cook plays innocent in Epic v Apple’s culminating testimony

The larger point being made with some of these figures is that, while the dollar amount flowing through apps being commissioned is large, it’s much smaller than most of the business being conducted on the App Store.

The report also noted how much of that business originates from China, which accounted for 47% of total global billings and sales ($300 billion) versus the U.S.’s 27% ($175+ billion).

Image Credits: TechCrunch

The study additionally dove into how some App Store categories had been heavily impacted by the pandemic — particularly those apps that helped businesses and schools move online, those that offered ways to shop from your phone, or helped consumers stay entertained and healthy, among other things.

This led to a more than 40% increase in billings and sales from apps offering digital goods and services, while sales in the travel and ride-hailing sectors decreased by 30%. While the latter may gradually return to pre-pandemic levels, some of the acceleration driven by the pandemic in other categories — like online shopping and grocery delivery — could be here to stay.

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To break it down further, general retail grew to $383 billion in 2020, up from $268 billion last year. Food delivery and pickup grew from $31 billion in 2019 to $36 billion in 2021. Grocery shopping jumped from $14 billion to $22 billion. But travel fell from $57 billion in 2019 to $38 billion in 2020, and ride hailing dropped from $40 billion to $26 billion. (None of these categories are commissioned.)

The study then continued with a deep dive into how the App Store aided small businesses.

Highlighting how smaller businesses benefit from a tech giant’s ecosystem is a tactic others have taken to, as well, in order to shore up support for their own operations, which have similarly been accused of being monopolies in recent months.

Amazon, for example, raves about the small businesses benefitting from its marketplace and its sales event Prime Day, even as it stands accused of leveraging nonpublic data to compete with those same small business sellers. Facebook, meanwhile, pushed the small business impact angle when Apple’s new privacy protections in iOS 14 allowed customers to opt out of being tracked — and therefore out of Facebook’s personalized ads empire.

In Apple’s case, it’s pointing to the fact that the number of small developers worldwide has grown by 40% since 2015. This group now makes up more than 90% of App Store developers. The study defines this group of “small” developers as those with fewer than 1 million downloads and less than $1 million in earnings across all their apps. It also excludes any developers that never saw more than 1,000 downloads in a year between 2015 and 2020, to ensure the data focuses on businesses, not hobbyists. (This is a slightly different definition than Apple uses for its Small Business Program, we should note.)

Apple dropping App Store fees to 15% for small businesses with under $1 million in revenues

Among this group, more than 1 in 5 saw at least an increase in downloads of at least 25% annually since their first full year on the App Store. And 1 in 4 who sold digital goods and services saw an earnings increase of at least 25% annually.

The study also connected being on the App Store with growing a business’s revenue, noting that only 23% of large developers (those with more than $1 million in earnings in 2020) had already earned more than $1 million back in 2015. Indeed, 42% were active on the App Store in 2015 but hadn’t crossed the $1 million threshold, and another 35% were not even on the App Store — an indication their success has been far more recent.

The research additionally identified more than 75 businesses in the U.S. and Europe, where iOS was essential to their business, that went public or were acquired since 2011. Their valuation totaled nearly $500 billion.

Finally, the study examined how apps transact outside their home market, as around 40% of all downloads of apps from small developers came from outside their home countries and nearly 80% were operating in multiple storefronts.

Image Credits: Apple WWDC 2021 imagery

While the antitrust scrutiny may have pushed Apple into commissioning this type of App Store research last year, it’s interesting to see the company is now updating the data on an annual basis to give the industry a deeper view into the App Store compared with the general developer revenue figure it used to trot out at various events and occasions.

Like last year’s study, the updated research has been released in the days leading up to Apple’s Worldwide Developer Conference. It’s a time of the year when Apple aims to renew its bond with the developer community as it rolls out new software development kits (SDKs), application programming interfaces (API)s, software and other tools — enhancements it wants to remind developers are made possible, in part, because of its App Store fees.

Today, Apple notes it has more than 250,000 APIs included in 40 SDKs. At WWDC 2021, it will host hundreds of virtual sessions, 1-on-1 developer labs and highlight App Store favorites.

“Developers on the App Store prove every day that there is no more innovative, resilient or dynamic marketplace on earth than the app economy,” said Apple CEO Tim Cook, in a statement about the research. “The apps we’ve relied on through the pandemic have been life-changing in so many ways — from groceries delivered to our homes, to teaching tools for parents and educators, to an imaginative and ever-expanding universe of games and entertainment. The result isn’t just incredible apps for users: it’s jobs, it’s opportunity, and it’s untold innovation that will power global economies for many years to come,” he added.

Apple’s App Tracking Transparency feature has arrived — here’s what you need to know

Iterative raises $20M for its MLOps platform

Published June 2, 2021

Iterative, an open-source startup that is building an enterprise AI platform to help companies operationalize their models, today announced that it has raised a $20 million Series A round led by 468 Capital and Mesosphere co-founder Florian Leibert. Previous investors True Ventures and Afore Capital also participated in this round, which brings the company’s total funding to $25 million.

The core idea behind Iterative is to provide data scientists and data engineers with a platform that closely resembles a modern GitOps-driven development stack.

After spending time in academia, Iterative co-founder and CEO Dmitry Petrov joined Microsoft as a data scientist on the Bing team in 2013. He noted that the industry has changed quite a bit since then. While early on, the questions were about how to build machine learning models, today the problem is how to build predictable processes around machine learning, especially in large organizations with sizable teams. “How can we make the team productive, not the person? This is a new challenge for the entire industry,” he said.

Big companies (like Microsoft) were able to build their own proprietary tooling and processes to build their AI operations, Petrov noted, but that’s not an option for smaller companies.

Currently, Iterative’s stack consists of a couple of different components that sit on top of tools like GitLab and GitHub. These include DVC for running experiments and data and model versioning, CML, the company’s CI/CD platform for machine learning, and the company’s newest product, Studio, its SaaS platform for enabling collaboration between teams. Instead of reinventing the wheel, Iterative essentially provides data scientists who already use GitHub or GitLab to collaborate on their source code with a tool like DVC Studio that extends this to help them collaborate on data and metrics, too.

Image Credits: Iterative

“DVC Studio enables machine learning developers to run hundreds of experiments with full transparency, giving other developers in the organization the ability to collaborate fully in the process,” said Petrov. “The funding today will help us bring more innovative products and services into our ecosystem.”

Petrov stressed that he wants to build an ecosystem of tools, not a monolithic platform. When the company closed this current funding round about three months ago, Iterative had about 30 employees, many of whom were previously active in the open-source community around its projects. Today, that number is already closer to 60.

“Data, ML and AI are becoming an essential part of the industry and IT infrastructure,” said Leibert, general partner at 468 Capital. “Companies with great open-source adoption and bottom-up market strategy, like Iterative, are going to define the standards for AI tools and processes around building ML models.”

Facebook opens its Messenger API for Instagram to all

Published June 2, 2021

F8 Refresh, Facebook’s annual developer conference with a new twist — it’s more pared down than in years past, and virtual — is going to be kicking off later today, and ahead of that Facebook is unveiling some news: all businesses can now use the Messenger API to interact with users on Instagram. The feature is opening first to all developers globally, with a phased approach for businesses:

Phase 1 will see Instagram accounts with follower counts of over 10,000 and under 100,000 connect to the API. It plans to expand that to accounts with followers numbering between 1,000 and 100,000 in July (phase 2), with remaining accounts coming online by Q3.

The feature was first announced as a closed beta in October with select businesses — 30 developers and 700 brands in all. Now, any brand or organization using Instagram to interact with customers can use it.

The key point with this tool is that this integration represents a significant step forward in how companies can leverage the wider Facebook platform.

In the past, a brand that wanted to interact with customers either needed to do so directly through Instagram, or via Facebook’s unified business inbox, which are limited how they can be used, especially by companies that might be handling large volumes of traffic, or keen to be able to link up those customer interactions with wider customer service databases.

The Messenger API, by contrast, can be integrated into any third-party application that a company or brand might be using to manage communication, whether it’s a social media management platform like Hootsuite or Sprinklr, or a CRM application that can bring in other kinds of customer data, for example warranty information or loyalty card numbers.

Facebook noted that one of the key takeaways from the closed beta was that brands and companies wanted better ways of managing communications from one place; and another was that many of them are making more investments in software to better manage their communications and workflows. So extending the Messenger API to Instagram was a feature that was long needed in that regard.

The move to expand the Messenger API to Instagram makes sense in a couple of different ways. For starters, Facebook has been turning up the volume for some time on how it leverages Instagram’s commercial potential, starting with advertising but expanding into areas like conversation between brands or businesses and users, and most recently, enhanced shopping features. Facebook also notes that 90% of Instagram users today follow at least one business, so creating a better route for managing those conversations is a logical move.

At the same time, Facebook has been working on ways of better linking up its various apps and platforms — which include Facebook itself, Messenger, WhatsApp, Instagram and Oculus, not just for users to interact across them but to help businesses leverage them in a more unified social strategy. Rolling out the Messenger API — created originally to help brands interact with bots and manage conversations on Messenger — to include support for Instagram fits into both of those bigger strategies.

And for those wondering why it’s being announced ahead of F8 Refresh? Perhaps it’s a hint of what is the social network’s bigger priorities for this year’s event: partnerships to enable more business to take place on the social networking giant’s platforms.

How Expensify hacked its way to a robust, scalable tech stack

Published June 2, 2021

Take a close look at any ambitious startup and you’ll find pugnacity nestled in its core. Stubbornness and a bullheaded belief in the worth of what a company wants to bring to fruition is often the biggest driver of its success, and the people at such companies also tend to share this quality.

So it wouldn’t be too far off the mark to say the people at Expensify are a stubborn lot — to the company’s ultimate benefit. This group of P2P pirates/hackers that set out to build an expense management app stuck to their gut, made their own rules. They asked questions few thought of, like: Why have lots of employees when you can find a way to get work done and reach impressive profitability with a few? Why work from an office in San Francisco when the internet lets you work from anywhere, even a sailboat in the Caribbean?

It makes sense in a way: If you’re a pirate, to hell with the rules, right? And even more so when nobody can explain the rules in the first place.

With that in mind, one could assume Expensify decided to ask itself: Why not build our own totally custom tech stack? Indeed, Expensify has made several tech decisions that were met with disbelief — from having an open-source frontend and cross-platform mobile development to hiring contractors to train its AI and recruiting open-source contributors — but its belief in its own choices has paid off over the years, and the company is ready to IPO any day now.

How much of a tech advantage Expensify enjoys owing to such choices is an open question, but one thing is clear: These choices are key to understanding Expensify and its roadmap. Let’s take a look.

Built on Bedrock

I think another question Expensify also decided to ask in its early days was something like: Why not have our database on top of a technology that’s built for small-scale application software?

It may sound incredible, but Expensify actually runs on a custom database built on top of SQLite. This is surprising, because despite being one of the most widely deployed database engines, SQLite is known for running on small, embedded systems like smartphones and web browsers, not powering enterprise-scale databases.

It may sound incredible, but Expensify actually runs on a custom database built on top of SQLite.

This custom database is called Bedrock, and its architecture is as unique as they come. Expensify explains it as an “RDBMS optimized for self-healing replication across relatively slow, relatively unreliable WAN (internet) connections, enabling extremely high availability/high performance multi-datacenter deployments without any single point of failure.” RDBMS means relational database management system, describing SQLite and other row-based databases where entries are interconnected with each other.

But why would Expensify build this instead of going for any number of widely available enterprise database solutions?

To answer that question, we need to go back to the early days of the company, which was originally a side project for its founder and CEO, David Barrett. His initial idea was to develop a prepaid card for the homeless, but this required putting a server on the Visa network, which brought several strict requirements and challenges. “I would say one of the most difficult [parts] was that I needed the ability to automatically replicate and failover,” Barrett told TechCrunch when we interviewed him a couple of months ago.

This was no easy feat in 2007, but Barrett was up for the challenge. “I just hit a moment where the technology available off the shelf just wasn’t that good. And I happened to be a peer-to-peer software developer who had tons of spare time and really wanted to build this thing to put on the Visa backend,” he said. The P2P aspect was important, as Barrett had the skills to make it work. His first hires for Expensify, P2P engineers he had worked with at Red Swoosh and Akamai, were also unusually suited for the job.

Stemma launches with $4.8M seed to build managed data catalogue

Published June 2, 2021

As companies increasingly rely on data to run their businesses, having accurate sources of data becomes paramount. Stemma, a new early-stage startup, has come up with a solution, a managed data catalogue that acts as an organization’s source of truth.

Today the company announced a $4.8 million seed investment led by Sequoia with assorted individual tech luminaries also participating. The product is also available for the first time today.

Company co-founder and CEO Mark Grover says the product is actually built on top of the open-source Amundsen data catalogue project that he helped launch at Lyft to manage its massive data requirements. The problem was that with so much data, employees had to kludge together systems to confirm the data validity. Ultimately manual processes like asking someone in Slack or even creating a Wiki failed under the weight of trying to keep up with the volume and velocity.

“I saw this problem firsthand at Lyft, which led me to create the open-source Amundsen project with a team of talented engineers,” Grover said. That project has 750 users at Lyft using it every week. Since it was open-sourced, 35 companies like Brex, Snap and Asana have been using it.

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What Stemma offers is a managed version of Amundsen that adds functionality like using intelligence to show data that’s meaningful to the person who is searching in the catalogue. It also can add metadata automatically to data as it’s added to the catalogue, creating documentation about the data on the fly, among other features.

The company launched last fall when Grover and co-founder and CTO Dorian Johnson decided to join forces and create a commercial product on top of Amundsen. Grover points out that Lyft was supportive of the move.

Today the company has five employees, in addition to the founders, and has plans to add several more this year. As he does that, he is cognizant of diversity and inclusion in the hiring process. “I think it’s super important that we continue to invest in diversity, and the two ways that I think are the most meaningful for us right now is to have early employees that are from diverse groups, and that is the case within the first five,” he said. Beyond that, he says that as the company grows he wants to improve the ratio, while also looking at diversity in investors, board members and executives.

The company, which launched during COVID, is entirely remote right now and plans to remain that way for at least the short term. As the company grows, they will look at ways to build camaraderie, like organizing a regular cadence of employee offsite events.

How to ensure data quality in the era of Big Data

Huawei officially launches Android alternative HarmonyOS for smartphones

Published June 2, 2021

Think you’re living in a hyper-connected world? Huawei’s proprietary HarmonyOS wants to eliminate delays and gaps in user experience when you move from one device onto another by adding interoperability to all devices, regardless of the system that powers them.

Two years after Huawei was added to the U.S. entity list that banned the Chinese telecom giant from accessing U.S. technologies, including core chipsets and Android developer services from Google, Huawei’s alternative smartphone operating system was unveiled.

On Wednesday, Huawei officially launched its proprietary operating system HarmonyOS for mobile phones. The firm began building the operating system in 2016 and made it open-source for tablets, electric vehicles and smartwatches last September. Its flagship devices such as Mate 40 could upgrade to HarmonyOS starting Wednesday, with the operating system gradually rolling out on lower-end models in the coming quarters.

HarmonyOS is not meant to replace Android or iOS, Huawei said. Rather, its application is more far-reaching, powering not just phones and tablets but an increasing number of smart devices. To that end, Huawei has been trying to attract hardware and home appliance manufacturers to join its ecosystem.

To date, more than 500,000 developers are building applications based on HarmonyOS. It’s unclear whether Google, Facebook and other mainstream apps in the West are working on HarmonyOS versions.

Some Chinese tech firms have answered Huawei’s call. Smartphone maker Meizu hinted on its Weibo account that its smart devices might adopt HarmonyOS. Oppo, Vivo and Xiaomi, which are much larger players than Meizu, are probably more reluctant to embrace a rival’s operating system.

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Huawei’s goal is to collapse all HarmonyOS-powered devices into one single control panel, which can, say, remotely pair the Bluetooth connections of headphones and a TV. A game that is played on a phone can be continued seamlessly on a tablet. A smart soymilk blender can customize a drink based on the health data gleaned from a user’s smartwatch.

Devices that aren’t already on HarmonyOS can also communicate with Huawei devices with a simple plug-in. Photos from a Windows-powered laptop can be saved directly onto a Huawei phone if the computer has the HarmonyOS plug-in installed. That raises the question of whether Android, or even iOS, could, one day, talk to HarmonyOS through a common language.

The HarmonyOS launch arrived days before Apple’s annual developer event scheduled for next week. A recent job posting from Apple mentioned a seemingly new concept, homeOS, which may have to do with Apple’s smart home strategy, as noted by MacRumors.

Huawei denied speculations that HarmonyOS is a derivative of Android and said no single line of code is identical to that of Android. A spokesperson for Huawei declined to say whether the operating system is based on Linux, the kernel that powers Android.

Several tech giants have tried to introduce their own mobile operating systems, to no avail. Alibaba built AliOS based on Linux but has long stopped updating it. Samsung flirted with its own Tizen but the operating system is limited to powering a few Internet of Things, like smart TVs.

Huawei may have a better shot at drumming up developer interest compared to its predecessors. It’s still one of China’s largest smartphone brands despite losing a chunk of its market after the U.S. government cut it off from critical chip suppliers, which could hamper its ability to make cutting-edge phones. HarmonyOS also has a chance to create an alternative for developers who are disgruntled with Android, if Huawei is able to capture their needs.

The U.S. sanctions do not block Huawei from using Android’s open-source software, which major Chinese smartphone makers use to build their third-party Android operating system. But the ban was like a death knell for Huawei’s consumer markets overseas as its phones abroad lost access to Google Play services.

Huawei’s new OS isn’t an Android replacement… yet