Lexion raises $4.2M to bring AI to contract management

Contract management isn’t exactly an exciting subject, but it’s a real pain point for many companies. It also lends itself to automation, thanks to recent advances in machine learning and natural language processing. It’s no surprise then, that we see renewed interest in this space and that investors are putting more money into it. Earlier this week, Icertis raised a $115 million Series E round, for example, at a valuation of more than $1 billion. Icertis has been in this business for ten years, though. On the other end of the spectrum, contract management startup Lexion today announced that it has raised a $4.2 million seed round led by Madrona Venture Group and law firm Wilson Sonsini Goodrich & Rosati, which was also one of the first users of the product.

Lexion was incubated at the Allen Institute for Artificial Intelligence (AI2), one of the late Microsoft co-founders’ four scientific research institutes. The company’s co-founder and CEO, Gaurav Oberoi, is a bit of a serial entrepreneur, whose first startup, BillMonk, was first featured on TechCrunch back in 2006. His second go-around was Precision Polling, which SurveyMonkey then acquired shortly after it launched. Oberoi founded the company together with former Microsoft research software development engineering lead Emad Elwany, and engineering veteran James Baird.

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“Gaurav, Emad, and James are just the kind of entrepreneurs we love to back: smart, customer obsessed and attacking a big market with cutting edge technology,” said Madrona Venture Group managing director Tim Porter. “AI2 is turning out some of the best applied machine learning solutions, and contract management is a perfect example – it’s a huge issue for companies at every size and the demand for visibility into contracts is only increasing as companies face growing regulatory and compliance pressures.”

Contract management is becoming a bit of a crowded space, though, something Oberoi acknowledge. But he argues that Lexion is tackling a different market from many of its competitors.

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“We think there’s growing demand and a big opportunity in the mid-market,” he said. “I think similar to how back in the 2000s, Siebel or other companies offered very expensive CRM software and now you have Salesforce — and now Salesforce is the expensive version — and you have this long tail of products in the mid-market. I think the same is happening to contracts. […] We’re working with companies that are as small as post-seed or post-Series A to a publicly-traded company.”

Given that it handles plenty of highly confidential information, it’s no surprise that Lexion says that it takes security very seriously. “I think, something that all young startups that are selling into business or enterprise in 2019 need to address upfront,” Oberoi said. “We realized, even before we raised funding and got very serious about growing this business, that security has to be part of our DNA and culture from the get-go.” He also noted that every new feature and product iteration at Lexion goes through a security review.

Like most startups at this stage, Lexion plans to invest the new funding into building out its product — and especially its AI engine — and go-to-market and sales strategy.

Microsoft closes fiscal 2019 with revenue spikes driven by cloud services

Satya Nadella, CEO of Microsoft, speaks at the Microsoft Annual Shareholders Meeting in Bellevue, Washington, on November 30, 2016.

Microsoft has reported its financial results for the final quarter of the 2019 fiscal year. The tech giant saw notable gains in sales for Azure in its Intelligent Cloud division and for Surface in the More Personal Computing unit.

Revenue for the the company reached $33.7 billion, an increase of 12% from the last quarter of 2018. Microsoft’s operating income rose 20% to $12.4 billion while net income jumped 49% to $13.2 billion, with earnings of $1.71 per share.

Each of Microsoft’s three reporting segments saw its revenue grow compared with the fourth quarter of the previous year. The Intelligent Cloud group saw the biggest jump, rising 19% to $11.4 billion.

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Azure revenue continues to slow down for Microsoft

Microsoft reported in its FY19, Q4 earnings report today that Azure, the company’s infrastructure as a service (IaaS) offering, grew at 64%. It may feel like a large number, but was part of a downward trend Microsoft has been experiencing throughout the entire fiscal 2019 earnings cycle.

The growth rates for FY19 were, Q1: 76%, Q2: 76%, Q3: 73% and all the way down to 64% this quarter. They’re probably not panicking in the hallways in Redmond today over these numbers, as that is still a healthy growth rate, and the law of large numbers suggests that the bigger you get, the slower your growth is going to be. Gaudy numbers tend to be for upstarts.

Microsoft is clearly not in that category, sitting strongly in the No. 2 position in cloud infrastructure market, and as Synergy Research’s John Dinsdale pointed out, while that growth rate may be slowing down, the more important market share percentage has continued to grow steadily upward.

“Microsoft is a clear number two in cloud infrastructure services (IaaS, PaaS, hosted private cloud), still a long way behind AWS but well ahead of the rest of the pack. Its revenue growth rate is way above the overall market growth rate, so it is gradually gaining marketshare – 9% in 2016, 11% in 2017, 14% in 2018 and 16% in the first quarter of 2019,” he said in a statement today.

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And even as the revenue growth slows, Microsoft announced a big win this week when AT&T announced it would be signing a contract worth $2 billion in Azure and Office 365 services. While Office 365 is not part of the IaaS market, it was still a significant customer acquisition for the company.

The cloud market is still growing at a rapid rate as companies are still in the relatively early stages of moving their workloads to public cloud vendors like Microsoft, Amazon and Google. There is a tremendous opportunity ahead for Microsoft and all of its rivals, and while Microsoft’s Azure earnings growth may be slowing down, there is still plenty of room for significant revenue for the foreseeable future.

How US national security agencies hold the internet hostage

Team Telecom, a shadowy US national security unit tasked with protecting America’s telecommunications systems, is delaying plans by Google, Facebook and other tech companies for the next generation of international fiber optic cables.

Team Telecom is comprised of representatives from the departments of Defense, Homeland Security, and Justice (including the FBI), who assess foreign investments in American telecom infrastructure, with a focus on cybersecurity and surveillance vulnerabilities.

Team Telecom works at a notoriously sluggish pace, taking over seven years to decide that letting China Mobile operate in the US would “raise substantial and serious national security and law enforcement risks,” for instance. And while Team Telecom is working, applications are stalled at the FCC.

The on-going delays to submarine cable projects, which can cost nearly half a billion dollars each, come with significant financial impacts. They also cede advantage to connectivity projects that have not attracted Team Telecom’s attention – such as the nascent internet satellite mega-constellations from SpaceX, OneWeb and Amazon .

Team Telecom’s investigations have long been a source of tension within Silicon Valley. Google’s subsidiary GU Holdings Inc has been building a network of international submarine fiber-optic cables for over a decade. Every cable that lands on US soil is subject to Team Telecom review, and each one has faced delays and restrictions.

Microsoft warns 10,000 customers they’re targeted by nation-sponsored hackers

Glass and steel skyscraper with flags of multiple nations in front of it.

Microsoft said on Wednesday that it has notified almost 10,000 customers in the past year that they’re being targeted by nation-sponsored hackers.

According to a post from Microsoft Corporate Vice President of Customer Security & Trust Tom Burt, about 84% of the attacks targeted customers that were large, “enterprise” organizations such as corporations. The remaining 16% of attacks targeted consumer email accounts. Burt said some of the 10,000 customers were successfully compromised while others were only targeted, but he didn’t provide figures.

“This data demonstrates the significant extent to which nation-states continue to rely on cyberattacks as a tool to gain intelligence, influence geopolitics, or achieve other objectives,” Burt wrote. Microsoft presented the figures Wednesday at the Aspen Security Forum.

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AT&T signs $2 billion cloud deal with Microsoft

While AWS leads the cloud infrastructure market by wide margin, Microsoft isn’t doing too badly, ensconced firmly in second place, the only other company with double-digit share. Today, it announced a big deal with AT&T that encompasses both Azure cloud infrastructure services and Office 365.

A person with knowledge of the contract pegged the combined deal at a tidy $2 billion, a nice feather in Microsoft’s cloud cap. According to a Microsoft blog post announcing the deal, AT&T has a goal to move most of its non-networking workloads to the public cloud by 2024, and Microsoft just got itself a big slice of that pie, surely one that rivals AWS, Google and IBM (which closed the $34 billion Red Hat deal last week) would dearly have loved to get.

As you would expect, Microsoft CEO Satya Nadella spoke of the deal in lofty terms around transformation and innovation. “Together, we will apply the power of Azure and Microsoft 365 to transform the way AT&T’s workforce collaborates and to shape the future of media and communications for people everywhere,” he said in a statement in the blog post announcement.

To that end, they are looking to collaborate on emerging technologies like 5G and believe that by combining Azure with AT&T’s 5G network, the two companies can help customers create new kinds of applications and solutions. As an example cited in the blog post, they could see using the speed of the 5G network combined with Azure AI-powered live voice translation to help first responders communicate with someone who speaks a different language instantaneously.

It’s worth noting that while this deal to bring Office 365 to AT&T’s 250,000 employees is a nice win, that part of the deal falls on the under the SaaS umbrella, so it won’t help with Microsoft’s cloud infrastructure marketshare. Still, any way you slice it, this is a big deal.

Contract management startup Icertis becomes unicorn with $115M new round

Icertis, a Washington-headquartered startup that develops cloud-based software to help large companies manage contracts, has raised $115 million at more than a billion dollar valuation to become the latest SaaS unicorn as it looks to further expand its footprints across the globe.

The Series E round for the 10-year-old firm was led by Greycroft and PremjiInvest, and saw participation from existing investors B Capital Group, Cross Creek Advisors, Eight Roads, Ignition Partners, Meritech Capital Partners, and PSP Growth. The startup, which also has offices in Seattle, Pune, Singapore, London, Paris, Sydney, has raised $211 million to date.

Icertis said it would use the fresh capital to expand its technology platform to address wider use cases. It said it would also expand its blockchain framework that integrates with enterprise contract management platforms to solve challenges such as transparency in supply chain and certification compliance. Its revenue are at about $100 million currently — another key area it intends to scale.

The firm, which claims that five of the world’s most valuable companies are its clients (one of which is Microsoft), said it would also scale its sales and marketing efforts to reach “every leading company in the world” and expand its partner ecosystem. It is also looking to acquire startups that are a good fit to its contracting business.

Icertis lets users manage almost all kinds of contracts. Companies use Icertis’ products to handle procurement, sales, and corporate contracts, including non-disclosure agreements. In addition to helping users create contracts, Icertis’ software also tracks when terms are met, ensures regulatory compliance, and automates administrative tasks like sending renewal reminders.

Icertis, which was founded originally in India, says it has more than 2,000 high profile customers and it helps them manage more than 5.7 million contracts with an aggregate value of more than $1 trillion. In a statement, Mark Terbeek, a partner at Greycroft, said Icertis’ ability to win “a huge stable of blue-chip customers” was among the factors that attracted them to invest in the company.

“Nothing is more foundational than contract management as every dollar in and every dollar out of a company is governed by a contract. As the CLM market takes off, we are thrilled to have Premji Invest join the Icertis family, Greycroft double down by co-leading this round, and all investors re-up their commitment as we execute on our mission to become the contract management platform of the world,” said Icertis’ cofounder and CEO Samir Bodas, in a statement.

Icertis competes with a number of firms including Apttus — which has raised north of $400 million, Springcm — which was acquired by DocuSign, Conga — which has raised over $100 million, Ariba, and Concord.

Minecraft Earth’s closed beta: This augmented reality needs more augmenting

Minecraft Earth’s closed beta: This augmented reality needs more augmenting

When Microsoft acquired Mojang, the maker of Minecraft, in 2014, we all feared the worst: a zillion cash-in video games. Turns out, Microsoft has been really smart about its Minecraft output in the past five years. Only one Minecraft-related game has launched since then (2015’s solid Minecraft Story Mode), and 2020’s Minecraft Dungeons felt ridiculously good to play at this year’s E3. (Plus, Mojang has been allowed to keep polishing the original game on every console and smartphone in the world, instead of turning into an Xbox-only studio. Whew.)

Thus, it wasn’t necessarily inevitable that Minecraft would get a clone to compete with every major gaming genre (no Super Steve Bros., no Minecraft Kart Racers). That got our hopes up for Minecraft Earth, Microsoft’s first salvo in the “augmented reality on phones” war, which was unveiled in May of this year. It sure seemed like a clever move: take Minecraft’s go-anywhere, punch-any-tree, build-anything philosophy, then dump it into the real world à la Pokemon Go.

After five days with the game’s closed beta (which launched seconds ago as a closed, invite-only beta in the Seattle area), I must report that the game’s early version is missing the series’ magic—and Mojang is going to need to put some more pixelated blocks into place before calling this one a victory.

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