Angels swoop in, invest $4.5M in cloud computing firm

By Mark Anderson, Staff writer Sacramento Business Journal

Glue Networks, a local firm specializing in cloud computing, has raised $4.5 million from investors to expand a business that promises to allow companies to set up sophisticated networks.

About $1 million came from local investors — including the Sacramento Angels, which invests in early-stage companies in Northern California. The remainder came from a host of investors including the Sierra Angels, Sand Hill Angels, Harvard Angels, San Joaquin Angels and the Keiretsu Forum of the Bay Area.

Working in stealth mode since 2007, Glue Networks announced the funding this week but received commitments from investors at the end of last year.

The Sacramento company says it has invented technology that creates secure, high-performance networks over the Internet. It holds three patents on the technology.

Company founders say its product will allow clients to set up a sophisticated network without a network engineer or an in-depth understanding of networking technology.

“Big companies invest a lot of money to do this kind of work, but most companies don’t have the capabilities to do a custom interface,” said John “J.J.” Johnson, an investor in Glue Networks and former chief information officer of Intel Corp. “This is disruptive technology. It makes network technology available to all companies.”

Johnson, who retired from Intel in July, now sits on the board of directors at Glue Networks.

“Glue technology makes simple plug-and-play technology a reality for many more companies. It is a secure, real-time solution,” Johnson said.

The company was founded in September 2007 by chief executive Jeff Gray and chief technology officer Olivier Huynh Van.

Huynh Van, a network engineer, was setting up a network for a major bank, connecting 300 branches in 35 countries. He was setting up the network in the traditional way by configuring it separately at all remote locations. After configuring one office after another, Huynh Van realized that this process could be automated, said Gray, a technology industry veteran and consultant. That formed the framework for Glue Networks.

A fifth-generation Sacramentan, Gray is adamant about keeping the company here. While searching for investors over the years, he repeatedly was told to move to the Bay Area to tap a deeper talent pool.

“It is not obvious to everyone that they should stay in Sacramento,” said Gilles Attia, managing partner of the DLA Piper law office in Sacramento and Glue Network’s attorney. “Some of the potential investors were concerned there is not a critical mass in the marketplace here, and that there are not enough employees. Both are untrue. There is a lot of talent here and many executives want to work here, but they have to commute to the Bay Area.”

Glue Networks has been able to tap local industry veterans for its management positions. Chief operating officer Hamish Butler was chief executive of Objective Systems Integrators Inc., a former telecomunications software firm in Roseville. Glue Networks’ vice president of services delivery is Tamara Gordon, a former manager with Hewlett-Packard Co. and Agilent Technologies.

The founders “hung in there and worked very hard for three years to get to this point,” Attia said. “That takes a lot of confidence in yourself and your business plan, and these guys have it.”

Many entrepreneurs are so hungry for investment money, they jump at some of the first offers, said Meg Arnold, chief executive officer of the Sacramento Regional Technology Alliance.

“This is a huge deal, and it is a fantastic achievement,” Arnold said. “He wanted to stay here. In this difficult funding climate, he was able not to take the first money offered but to wait to take the right money.”

Arnold called Glue Networks an “incredibly bright spot for our region,” and said she hopes Glue Networks turns out to be a forerunner of many more technology companies taking advantage of Sacramento talent.

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