Scalify_logoA Q&A with Scalify co-founder and CEO Steve Telburn. The Melbourne, Australia–based company was founded in 2010 and recently closed a $2 million venture round led by Starfish Ventures.

SUB: Please describe what Scalify is, and the value proposition you offer to gamers.

Telburn: Our networking middleware, Badumna, lets you create large multi-user applications such as online games and virtual worlds. We use a networking architecture that provides almost unlimited scalability, better networking performance, lower operating costs and the freedom to design multiplayer applications that were simply not possible before.

SUB: Who are your target users?

Telburn: Developers and publishers of multi-player applications, on any platform.

SUB: Who do you consider to be your competition?

Telburn: Historically, developers have attempted to develop their own networking. However, the market is maturing so developers and publishers are more often seeking third-party networking products, either as stand-alone products or as part of a game engine, because it is faster, more reliable and less expensive to deploy and maintain. So we consider our competitors to be in-house development and other networking middleware vendors.

SUB: What differentiates Scalify from the competition?

Telburn: Our approach is unique because it is based on a decentralized architecture, rather than client-server. All other solutions are based on a client-server model, which has inherent problems for real-time applications like games. Game publishing is a hit-based business, so publishers do not know if their game is going to be a huge success or not. But when planning server infrastructure they need to assume it will be a success and therefore thousands of players online at the same time, otherwise the game experience will suffer and players will not come back. With a peer-to-peer architecture, as each player joins the game the capacity of the network automatically increases, without needing to deploy more servers or chew up more bandwidth. That means much more scalability, with lower operating costs. Furthermore, games are currently designed with these performance limitations in mind. Without these constraints, designers are free to add new types of functionality, or provide real-time interactions with other players where it might not have been feasible before, such as in a large social game on Facebook.

SUB: When was the company founded and what were the first steps you took in establishing it?

Telburn: Scalify was founded in 2010. I’d worked with my co-founder, Santosh Kulkarni, at Australia’s largest telco back in 1999. Since then I’ve done a lot of start-ups and Santosh continued to develop his technical expertise in networking. We reconnected in about 2009 when Santosh told me about the technology he was working on and wanted some assistance with planning the commercialization. When we got together we decided to start Scalify. We then licensed the technology from NICTA, the research lab where the technology was being developed, and set about getting some first customers.

SUB: What was the inspiration behind the idea for Scalify? Was there an ‘aha’ moment, or was the idea more gradual in developing?

Telburn: Developers have often thought about using peer-to-peer networking for online games, because of the obvious benefits. However, there were technical barriers that were very difficult to overcome when trying to implement it in a commercial, real-world setting. So the ‘aha’ moments were about how to resolve those issues in some clever ways and our solutions are now the subject of patent filings.

SUB: What have the most significant obstacles been so far to building the company?

Telburn: Finding early-stage capital is difficult for any start-up, but it is even harder when you are based in a country such as Australia where there are not as many investors.  Fortunately, we now have one of Australia’s leading venture capital funds on board.

SUB: You just closed a $2 million funding round. What are your plans for the new funds?

Telburn: Primarily to boost our sales and marketing capability and to expand the number of development platforms we support. To date, most of the investment has been into building a great product, rather than sales and marketing. This means that not many developers know about Badumna yet, and our existing customers feel they have a secret weapon. Having more funding will enable us to get the message out further. Similarly, supporting platforms such as Adobe Flash means we can support a much wider range of games.

SUB: Do you plan to raise more outside funding in the near future?

Telburn: I’ve found that it is a good idea to start planning your next fund raising the moment you finish the last one.

SUB: What are your goals for Scalify over the next year or so?

Telburn: We’ll be deploying the technology with some publishers that already have large online games. Large games have the most to benefit from our solution, so we are doing some trials with successful games. Over the next year we’d love to see creative game designers finding new designs to exploit the capabilities of the technology, so we’re working on kick-starting that process. On the technical side, we will be supporting a wider range of platforms and adding new functionality that will make it even easier for publishers and developers to utilize our technology. We’d also like to build new partnerships with other game engines.

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