451 Research: Pneuron offers a new way of thinking about connecting and using hybrid IT

InsightaaS: In the Impact Report that follows below, 451 research manager, enterprise architecture, integration & business process management Carl Lehmann offers a good example of the kind of study the 451 Research Group built its reputation on – a deep dive into the value proposition and competitive landscape surrounding new, disruptive technology companies. With this review of Pneuron, a Massachusetts-based “enabler of distributed process networks,” Lehmann describes the startup’s technology and funding, but also tackles the thorny, but critical issue of integration – growing demand for it, current solutions and how this pioneer’s offering can provide the agility needed in an era of hybrid cloud infrastructure.

Along the way, readers are instructed on the differences between SOA and ESB established middlewares and the Pneuron approach, introduced to the deployment of “intelligent agents” that traverse distributed networks to access and integrate data, applications and systems, and educated on company rivals that may usurp Pneuron momentum in this space. For more on Pneurons, Cortex, Design Studio and a UX (user experience), read on – with special attention focused on Lehmann’s concluding SWOT analysis, a 451 signature designed to offer a quick snapshot view of market prospects for technology disrupters.

Carl Lehmann, research manager, enterprise architecture, integration & business process management, 451 Research
Carl Lehmann, research manager, enterprise architecture, integration & business process management, 451 Research

Pneuron believes that systems integrations and new platform deployments are too costly and inefficient. Its technology is intended to negate the need for enterprises to integrate, upgrade or buy more IT infrastructure. It does so by integrating multiple technical disciplines (often seen as separate) into a single IT fabric that can access, transmit and process data.

In-place data sources, applications, messaging platforms and analytic engines become interoperable services that are connected for specific purposes, enabling what Pneuron calls ‘distributed process networks.’ The firm is preparing for a series C investment round to take this value proposition to market.

The 451 Take

While Pneuron considers itself to be an enabler of ‘distributed process networks,’ many prospective clients may view it as an alternative to service oriented architectures (SOAs) and perhaps enterprise services busses (ESBs). ESBs work within application development environments as part of SOAs. Both are established middleware that enable distributed computing. For years, they have provided the communications, and command and control, needed within IT infrastructure to enable a variety of heterogeneous application and systems integrations. They are commonly used within enterprises to link various front-end ‘systems of engagement’ with back-end ‘systems of record.’ But like any aging technology, SOAs and ESBs have lots of room for improvement. They are considered by many to be too complex and costly, and to require great skills. Pneuron seems to be among a handful of pioneers that set out to improve upon these shortcomings. The hard part is getting enterprises to think the same way. It’s possible they will. As enterprises continue to redeploy workloads across hybrid clouds, they will need to expose data and services with greater agility. The company’s Pneurons may create the synapses needed to connect emerging hybrid IT architecture.


Woburn, Massachusetts-based Pneuron was founded four years ago by a business team that was challenged and frustrated by how long it took to build systems from underlying data sources. The traditional approach for integration was too complex and required too many forms of disparate technology. Its flagship offering – the Pneuron Distributed Platform – is based on technology that came out of the US National Security Agency, which sought a noninvasive integration layer to target and extract data and information from a disparate set of distributed systems.

In March 2013, Pneuron raised a $6m series B round. Safeguard Scientifics deployed $5m for a 27.6% primary ownership stake. Existing investor Osage Partners contributed the remaining $1m in the round. Angels provided seed funding, bringing the total capital raised to approximately $8m. The firm employs a staff of 20 along with nearly 12 full-time contractors in Romania. Revenue was not reported, but Pneuron says it is growing at a 200% year-over-year rate. We estimate revenue to range between $1m and $2m. The firm is currently seeking a series C round.

Strategy and products

Pneuron is attempting to reform a persistent IT problem – the expense and effort of integrating systems and extracting value from in-place data stores. Nearly all enterprises have needed to make considerable investments in middleware for integration, data warehouses and marts for analytics and business intelligence, and systems integration projects to link complex business assets like ERP and supply chain management (SCM) systems.

The Pneuron Distributed Platform attempts to mitigate the need for such complex approaches by applying an old idea in a new way. It sits within existing distributed IT infrastructure, and uses what are in effect ‘intelligent agents’ that transverse networks to access data sources, applications and systems, and perform the tasks for which they are designed. Its architecture is comprised of four components – Pneurons, a Cortex, a Design Studio and a UX (user experience).

Pneurons are noninvasive, interoperable and configurable applications that are connected as a network to create distributed systems. Currently, Pneuron maintains a library of 50 preconfigured Pneurons. There are several types:

  • Data Interaction Pneurons access data in various sources (e.g., databases, files, data services, etc.).
  • Analytics Pneurons perform analytics, matching, enable predictive models, and execute rules.
  • Service/Rapper Pneurons call or encapsulate existing applications or functions as interoperable network components.
  • Output Pneurons deliver results via print, applications, mobile devices and dashboards. They can persist to data stores, and post to applications, message queues or other endpoints.

The Cortex is a lightweight distributed runtime server that manages capacity, availability, performance and messaging. The Design Studio is a ‘single pane of glass’ for all development and deployment. It provides a visual, configuration-driven environment to build and deploy interoperable ‘services’ – a combination of Pneurons that are connected into ‘processing networks.’

The UX is a collection of tools for use by business and technical staff to collaboratively deliver those processing networks without changing or replacing existing IT investments and applications. One example of this is a Head Up Display, which can float as an overlay on existing applications as a visualization widget to provide incremental data, information analysis or functions directly to a user. Another example is an Enterprise Control Manager, which is a visualization suite of tools capable of performing ‘what if’ analyses, enabling configuration and report creation, and applying real-time changes to business functions, use cases and intelligence.

Pneuron assembled key best-of-breed features from multiple IT categories, and embedded them within its technology for users to build, deploy and run workloads as a distributed execution platform. In a way, the platform is like an ESB because it extracts what is needed from underlying in-place systems. It’s also like an analytics tool because it has native capabilities to perform mathematics and run models. It can act as a dashboard that can mash up data and tasks, and visualize results.

Its ability to create distributed processing networks enables it to orchestrate and automate business process flow. It can also function as ETL (extract, translate, load) and CDC (change data capture) tools, because it targets data in underlying systems and extracts only what is needed from the source system. Essentially, the platform homogenizes processing across disparate compute infrastructure. Pneuron does not build data stores and data marts. Rather, at runtime, it grabs the data it needs and runs it through a network.

It differs from a SOA, however, because of how the Cortex works. Pneuron claims it is far less complex and costly, requires little IT overhead, has a shorter learning curve, and can be installed and ready to use in less than one hour.


Pricing models include both perpetual and subscription options based on concurrent users. Pneuron is also considering other pricing models based on consumption. It is currently working with potential partners to host Pneuron as a service, with pricing based on virtual machines or CPU cores. The average selling price varies – entry-level perpetual licenses range from $200,000 to $400,000 for 10-30 concurrent users.


Pneuron is just getting started with its go-to-market strategy in earnest, and reports it has less than a dozen paying customers. Its sales cycle includes a proof of concept (POC) phase, and can take up to one year. It cites having several prospective customers in its sales pipeline currently engaged in POCs. It targets business leaders such as compliance officers, risk management teams and those responsible for supply chain transparency.

Once the discussion progresses, it reaches out to the IT team in the enterprise to garner support. A customer of note is C6 Intelligence (financial risk management), which uses the Pneuron Distributed Platform for the design, development and deployment of global risk and fraud management.


Pneuron’s top rivals are likely to be inertia or the do-it-yourself developers using in-place SOA and ESB technology. In some regards, SOA seems to be on the rebound. Emerging API management platforms exploit SOA principles and technology for the specific needs of developing, publishing, subscribing and managing APIs – bits of code needed to bind apps, clouds, devices and machines.

In some circumstances, API management platforms may perform some of the fundamental data-access functions that Pneuron is also capable of. Pneuron’s direct rivals will be vendors that are also pioneering the best-of-breed approach to applications development and integration across disparate infrastructure. Among them, EnterpriseWeb with its Intelligence Operation Platform – we liken it to a next-generation SOA – and Incapture Technologies’ Rapture platform, which was developed to improve investment decisions, but will be branching into other industry applications shortly.

Another might also be Kofax’s Kapow technology. It enables what Kofax refers to as ‘synthetic APIs’ that can be used to access, transmit and process data as well. Kofax applies such technology to content and collaboration-oriented applications. Some iPaaS vendors have offerings that can perform in ways similar to Pneurons and Cortex. Dell Boomi offers its Atoms and AtomSphere, SnapLogic has Snaps and Snaplexs and Informatica has Vibes and VIPs.

SWOT Analysis

Strengths Weaknesses
The deployment of Pneuron’s technology can solve the problems and lower the costs associated with large systems integration and database aggregation initiatives. Pneuron’s go-to-market messaging and approach has too long a sales cycle. Omni-purpose, ‘does everything’ platforms are a tough sell. Targeted business problem-solving may shorten sales cycles.
Opportunities Threats
Hosted private, hybrid cloud architecture is on the rise in many enterprises. Shifting workloads across hybrid clouds will call for new agile means of data access and integration. This, along with aging SOA and ESB investments, provide a market upside that Pneuron should find fruitful. As hybrid cloud architectures in enterprises proliferate, incumbent SOA, ESB, iPaaS and maybe even next-generation API management vendors are positioning to enable similar distributed computing functions to Pneuron.



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