Moment of truth for 'most promising startup' GridMarkets

  • About to go live with its B2B platform for excess computational capacity
  • New investors keenly awaiting outcome with initial customers before coming in
Moment of truth for 'most promising startup' GridMarkets

THE problem is an increasingly expensive one. Certain businesses need ever-increasing amounts of computational power to crunch data.
 
Now, this is not the problem. The problem is that the need for this surge of computing power only happens at certain periods, and after this peak usage, demand drops steeply – sometimes totally.
 
One insurance company only needs its servers to crunch customer data one week in the month. The other three weeks, it could have just switched off most of its servers.
 
Some eye-popping data from the Uptime Institute in the United States puts this into stark perspective. Studying 11,000 servers, it noted that 54% of the servers were only utilised 0.6% of the time, while 24% of the servers were used only 6% of the time. Talk about wasted capacity.
 
The idea to solving this was simple enough – if you knew your niche and were willing to think out of the box.
 
Having been the chief information officer at SunLife Insurance and the chief architect (Europe/ Asia) at Thomson Reuters, and being a life-long geek, GridMarkets cofounder Mark Ross knew his niche – and was willing to think out of the box.
 
Which was why towards the end of 2010, when he was faced with a hedge fund which had this problem of continually needing more and more computational power but only needed it for short bursts of time, Ross came back to the client with this idea: Why not ask those institutions which had all that excess computational power, to lend it to the hedge fund?
 
It seemed like a crazy idea, but the hedge fund was interested enough to give it a go. It was up to Ross to figure out how to do this.
 
Running his own cloud consulting business called CloudGarage at that point, Ross decided he needed a partner. Enter Hakim Karim, who was already was with CloudGarage in early 2011 after his previous job at a financial services provider was made redundant.
 
Describing himself as a “geek at heart,” Hakim had proven himself adept at the business side of the equation too, and had risen to become strategic business development director, Asia, Investment & Advisory (Hong Kong), while at Thomson Reuters.
 
“I became intrigued with what I felt was a crazy idea, but a huge idea too, when approached by Ross on the opportunity here,” he recalls.
 
Doing some research, he came up with market numbers that he felt “were astronomical.” He also felt this could potentially be a huge opportunity.
 
“I wanted to do something crazy and difficult,” Hakim says. “This fit the bill. Plus, it was disruptive.”
 
Moment of truth for 'most promising startup' GridMarketsBecause both Ross (pic) and Hakim had built strong networks throughout their careers, they were able to raise seed funding from a high net worth individual in New York. Beyond that, a look at GridMarkets’ website shows they had attracted a very successful individual, Mike Vieyra, with a track record of three exits, as their non-executive director.
 
Besides Vieyra, GridMarkets has attracted a clutch of top talent, either as advisors or staff, both full- or part-time.
 
While the company was set up in Hong Kong initially, today it sits in both Malaysia and Singapore where Hakim and Ross live. Cost pressure got to the founders.
 
It was in Malaysia though that GridMarkets started appearing on the tech scene. Its big break was in being judged the most promising startup in Malaysia at the Echelon Malaysia Satellite event in April.
 
This also proved its ticket to the main Echelon event in Singapore where Hakim says, “just being on stage was huge ... winning would have been a bonus.”
 
But GridMarkets also met potential customers during Echelon and did manage to catch the attention of online journalists from Taiwan and South Korea. There were also some meetings with potential investors.
 
Next page: US$200,000 raised from angels, while founders pumped more than US$200,000
 

Angel-founder funds combo
 Moment of truth for 'most promising startup' GridMarkets
GridMarkets’ first angel investor is the managing director of “a major investment bank in New York” who was not only intrigued at the possibility of GridMarkets taking off, but had himself considered attacking the problem, years earlier, according to Ross and Hakim.
 
Which brings us to the fact that, technically, the concept GridMarkets is proposing has been around for a long time, with “the underlying technology to do this [having been] around for at least 50 years,” says Hakim.
 
That does not mean this was an easy challenge to solve. The fact that only GridMarkets is attempting it speaks of the technical, commercial and legal challenges.
 
Indeed, Hakim acknowledges that GridMarkets’ launch has been delayed due to the difficult technical challenges that go into building a platform for institutions to supply their excess computing (or CPU) capacity to other institutions with high computational needs, using cloud and grid-computing technologies.
 
This is despite the fact that he has a very strong technical team in place. “We are really pushing the boundaries here in terms of what can be done and we are talking about serious, heavy-duty industrial software at work,” he adds.
 Moment of truth for 'most promising startup' GridMarkets
“We have limited resources and the problems are technically complicated, hence [it is] taking us some time to solve. But, we are in a good place now and wrapping up our beta test to go live with three, four clients within the next four weeks,” says Hakim (pic).
 
Digital News Asia (DNA) contacted one of its users, a cloud service provider in Hong Kong, who spoke highly of the value proposition that GridMarkets brings to the table.
 
“It is a great proposition for us to be able to monetise our spare CPU resources. Plus, they were responsive and improved on their client which sat on our side.
 
“We had control over it and could spec out how much of our resources GridMarket could use and we could prioritise how our memory and CPU resources could be used,” said the executive from Hong Kong.
 
Meanwhile, the limited resources include the US$200,000 they have raised from two angels, plus the money Hakim and Ross forked up themselves, which is more than the US$200,000 raised from angels.
 
While the technical, commercial and legal challenges have mostly been dealt with, the real test will come when they go live and their B2B (business-to-business) platform for both buyers and sellers of excess computational capacity comes on-stream.
 
“We have a lot of interest from investors and are currently at various stages of due diligence but what we know for sure is that they all want to wait for the results with the initial four customers before they commit to us,” says Hakim.
 
The moment of truth is upon GridMarkets.
 
Related Stories:
 
Echelon Malaysia Satellite a hit with start-ups
 
QEOS brings its first breakthrough optical products to market
 
 
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