February 22, 2021

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In this issue:

  • New Portfolio Company: Flywheel

  • Portfolio Company Exit: StackRox

  • Pathfinder Market Outlook 2021

  • Solutions — A Virtual-OEM Program

  • Portfolio Company News

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This month we would like to highlight some top-of-mind industry trends for the coming year. The external innovation market is strong, and we expect a lot of exciting developments as customers seek out new solutions to accelerate their digital transformation journeys.

Pathfinder has already had two updates to its portfolio in 2021. We welcome and invite you to learn about our newest Pathfinder portfolio company, Flywheel. Also, we would like to congratulate and say goodbye to StackRox after its recent acquisition by Red Hat.

Finally, we highlight an exciting HPE go-to-market program that helps develop long-term strategic partners: Virtual OEM.

Pathfinder has already had two updates to its portfolio in 2021.

New Portfolio Company: Flywheel

Pathfinder recently announced its investment in Flywheel, the leading data management platform for medical research and collaboration. Flywheel helps medical researchers and clinicians capture, curate, compute, and collaborate on healthcare imaging datasets. The platform is intuitive for the general user and runs in on-premise, hybrid, and cloud environments. The solution organizes and analyzes large volumes of data with minimal friction, provides data privacy controls, and automates workflow processes uniquely positioning Flywheel in a large and growing market.

Flywheel is in the process of joining our Technology Partner Program. The GreenLake and AI teams continue to explore areas of potential integration as well as joint customer use cases. Read more

Portfolio Company Exit: StackRox

In January, Red Hat announced its intent to acquire StackRox,

By bringing StackRox’s powerful Kubernetes-native security capabilities to Red Hat OpenShift, the industry’s leading enterprise Kubernetes platform, Red Hat will further its vision to deliver a single, holistic platform that enables users to build, deploy and securely run nearly any application across the entirety of the hybrid cloud. Read more

Investment Trends

Pathfinder Market Outlook 2021

The year 2020 was unlike any previous. With the COVID-19 pandemic upending the world, companies were compelled to consider new business models and focus on modernizing for their future. The acceleration of digital transformation led to strong enthusiasm in the venture capital market for enterprise technology companies. This enthusiasm was buoyed by multiple IPOs, freshly anointed unicorns, and big fundraisings for enterprise companies across all stages.

We predict that momentum will continue in 2021 and want to outline several areas of opportunity we see in enterprise technology.

1) DevOps and the new stack adjust to working remote: The pandemic necessitated developers and IT operators to remotely develop applications and scale up/down the deployment infrastructure. This trend will continue and requires more automation tools (RPA and process discovery) and increased collaboration across the CI/CD pipeline (infrastructure as code and collaboration tools).

2) Zero trust security: The meteoric growth in the remote worker led to an exponential increase in the attack surface for bad actors. Combined with the SolarWinds breach, employers and employees no longer trust applications, incoming connections, or infrastructure whether on-premise or in the cloud. This will result in an accelerated shift away from centralized cybersecurity to a world where every environment is assumed to be breached and the onus of security lies with the application and the data/infrastructure it accesses.

3) MLOps goes mainstream: Much has been written about MLOps and the inspiration it draws from the DevOps world. The plumbing process to build a sophisticated ML model is still very murky. We expect the momentum to continue for companies that pursue data streaming/ingestion, hardware abstraction, model management, and even GitOps-like model versioning or reuse capabilities.

4) OT visibility and security becomes mainstream: Covid19 caused manufacturing and supply chains to be disrupted worldwide, dramatically accelerating the need for enterprises to have visibility across their supply chains. This visibility requires more connected devices providing more relevant data to be consumed by compute devices at the edge. Not only will enterprises become more efficient, but they will also obtain visibility and security across their OT networks.

2021 should be another exciting year for enterprise technology and Pathfinder will continue to look for opportunities to align founders and their startups with HPE priorities to accelerate go-to-market and solve our customers’ most pressing challenges!

Solutions

A Virtual-OEM Program

A common problem facing startups that partner with large established companies is a mismatch of capabilities and expectations. Large companies often have expectations for revenue that exceed the capability of an average startup. These inflated expectations influence program design and other related processes (legal, sales, and support), all of which inhibit engagement with startups.

The HPE OEM team alleviates this issue by acknowledging the risks and requirements related to working with smaller companies and designs their processes accordingly. For startups that want to pursue a traditional OEM route (develop a solution that combines their software with HPE hardware and offer support and distribution), consideration is given for their status and expectations set appropriately for revenue and growth forecasts. The OEM team nurtures companies and helps them mature into full-scale HPE partners.

An innovative approach from the team is the Virtual OEM (V-OEM). V-OEM allows the creation of an OEM solution by shifting hardware integration and/or license billing and support to an authorized OEM channel partner. This approach allows a startup to focus their resources and expertise on their core IP without the need to develop significant hardware integration expertise or support resources. As a sponsored HPE partner, the startup gains access to a known, qualified, and reliable channel partner that is experienced with enabling HPE partners. This provides a streamlined go-to-market process allowing the startup to quickly bring a turnkey solution to market with reduced support and distribution costs and enhanced profit margins.

Incubating startups at a large company can be a difficult process. The HPE OEM team makes it easier and provides an opportunity for HPE to develop long-term strategic relationships and partners.

Portfolio Company News