HubSpot Adopts Google Cloud for International Infrastructure
Considering how AI can leverage CRM and the emerging demand for intelligent business applications, all the major CRM providers are steering their ships in the very same direction where they muscle up in the battle for automated system supremacy to exploit artificial intelligence technologies such as machine learning.
Being an early adopter of this predictive slant on CRM, HubSpot, cloud-based sales and marketing platform specialist, has a strong commitment to accelerating the performance and customer experience of its products. To back this up, the HubSpot product is made up of over 5,000 microservices, including AI and machine learning infrastructure, behind static front-end apps. HubSpot's product team updates these services and apps more than 1,000 times a week on average.
With the goal of providing better elevation through tighter integrations in mind, HubSpot announced another milestone in its long-standing partnership path with Google by adopting Google Cloud to expand its international cloud infrastructure. The company also expects the new partnership to allow the company to invest more in its current Google Cloud product integrations and accelerate the growth of HubSpot's Free CRM.
The partnership between the two companies began with Google Ventures' investment in HubSpot's Series D round in 2011. Since then, Google has become woven into the fabric of HubSpot. Google Calendar, Gmail, AdWords, Docs, and Drive are some of the most popular integrations that HubSpot users have been effectively deploying.
More importantly, this deepening partnership marks the next chapter in HubSpot’s partnership with Google: the adoption of Google Cloud for its new international cloud infrastructure which will allow HubSpot to expand its footprints into Europe as the CRM giant will be able to harness the Google Cloud Platform Frankfurt region to support local customer data, as well as provide outage and data protection as needed. According to HubSpot, its use of Google Cloud Platform in Europe will enable its customers around the globe to benefit from the speed, reliability, and security of Google Cloud.
"The speed and coverage of Google's global network and strong capabilities in emerging technologies helped us choose Google Cloud to scale with our rapidly growing user base. And we're already seeing the benefits of the new location in Europe – rendering speeds are up to five times faster now for European customers," said Kerry Munz, Director of Engineering, Platform Infrastructure at HubSpot. "Privacy and security have always been a priority at HubSpot. Like giving free SSL to all of our customers, our expanded international infrastructure is another investment in increasing reliability and security for our customers."
Through its strategic partnerships and acquisitions, HubSpot has been rapidly becoming a central player supporting an array of related sales and marketing software. Co-founder Dharmesh Shah alone has invested in more than 30 startups, including Apperian, InsightSquared, and Backupify. As CMS-Connected reported last year, HubSpot appointed Scott Brinker as HubSpot’s Vice-President, Platform Ecosystems and made a partner pledge in relation to its Connect Partner Program which has grown to over 100 integrations with new partners such as AdEspresso by Hootsuite, Terminus, AdRoll, and Brightcove.
HubSpot Reported Impressive 2017 Financial Results
The company wrapped up 2017 with a vast improvement in non-GAAP income while its full-year profit and sales figures topped consensus views.
Total revenue was $375.6 million, up 39% compared to 2016, while the non-GAAP operating margin was 2.3% for 2017, an improvement of approximately 6.7 percentage points from (4.4%) in 2016.
Non-GAAP operating income was $8.6 million in 2017. A year earlier, HubSpot reported $271 million in revenue and a non-GAAP operating loss of $44.7 million.
During the full year, the company generated $22.3 million of free cash flow compared to using ($2.2) million during the full year 2016.
The number of its customers grew to 41,593 at December 31, 2017, up 48% from December 31, 2016.
Brian Halligan, HubSpot Co-founder and CEO commenting on the financial results posted: “We made great strides in building out our freemium model, found more ways to delight our customers and continued our evolution from a single product application company to a front office suite with the goal of becoming the growth platform for SMB's."
HubSpot posted its estimations on 2018 financial results as well. Total revenue is expected to be in the range of $481 million to $485 million, while Non-GAAP operating income is expected to be in the range of $20.0 million to $24.0 million. "Ultimately, when we look out beyond 2018, we continue to see a ton of opportunity, some of which we'll be able to share with you at our INBOUND event in September. But suffice it to say, we don't feel like we're anywhere close to being done with where we can go with our products, the company, this vision and the value we can deliver for our customers worldwide," said Halligan.
HubSpot CFO Plans to Step Down
HubSpot also announced CFO John Kinzer, who has been with the company since 2013, will be leaving at the end of 2018. "On behalf of the entire HubSpot team, I want to thank John for his many contributions since joining the company in 2013. He was an instrumental part of our successful transition from a private to a public company and our success in scaling up our business," said Brian Halligan.
"My more than four years at HubSpot have been an amazing experience, working with a very talented group of people to help our customers grow better, and building a big business in the process," said departing CFO Kinzer. "Heading into 2018 HubSpot has never been on stronger footing, and I look forward to ensuring a smooth transition in the coming months."
HubSpot, which raised $125 million in its 2014 IPO at a valuation of $759 million, is now worth more than $3.6 billion. Kinzer played a key role in HubSpot receiving one of the most successful initial public offerings in the recent history of the Massachusetts tech industry. In a statement, Kinzer said: “My more than four years at HubSpot have been an amazing experience, working with a very talented group of people to help our customers grow better, and building a big business in the process."
Google’s Jonathan Williams Joins HubSpot
HubSpot has recently appointed ex-Google staffer Jonathan Williams as Head of Marketing for Australia and New Zealand. Prior to joining HubSpot, Williams had run marketing programs at Google in the UK and Australia for six years, and before that held several marketing manager roles at PayPal.
In his new role, Williams will be responsible for all of HubSpot’s marketing activity in the region. He will be based in HubSpot’s Sydney office and HubSpot expects William’s experience and proven track record to drive the expansion of HubSpot’s presence in Australia and New Zealand.
According to Williams, “there are so many businesses in Australia and New Zealand who can benefit from the community, education, and software HubSpot is building. I look forward to bringing my experience to this challenge.”
Gartner predicts that “30 percent of all companies will employ AI to augment at least one of their primary sales processes by 2020.” Being able to learn without being explicitly programmed, machine learning can access, analyze, and find patterns by extracting information from Big Data in a way that is even beyond human capabilities. Besides integrating with these capabilities, it is important for business application providers to also bring the speed, reliability, and security of cloud computing to their platforms.
With this in mind, HubSpot has been significantly amplifying its platform and those efforts have started gaining steam as the 2017 financial figures also prove. One of the biggest factors behind its unprecedented growth in customer acquisition is its smart execution of converting customers from its freemium model to paid version. There is a common pattern among its free users as after a while, a whopping portion of that user base later upgrade to a paid version. In recognition of this trend, the HubSpot leadership team promised to keep their foot on the accelerator with the R&D investments they are making into the freemium product.