As tech companies hitch their wagons to a popular new cloud operating system called OpenStack and the companies built around it, Intel has made a powerful bet on emerging player. The chipmaking giant announced Monday it's led a new $100 million fundraise and commitment to spend on development with Mirantis, alongside Goldman Sachs and a group of existing investors.
An integration specialist for twelve years before changing course to OpenStack in 2012, Mirantis makes it easier for companies to adopt OpenStack's flexible operating system for running applications and other services. Mirantis has helped OpenStack deployment at large organizations like Cisco, Comcast, NASA and Ericsson, which it signed to (an OpenStack record) $30 million sale last year. The company is one of the top three biggest contributors to OpenStack's open-source software and bills itself as the only "pure-play" company in the space, meaning it has no other adjacent businesses to promote through OpenStack adoption.
Intel is including the Mirantis investment as part of an initiative in July to promote cloud technology with its customers. The company was the leader of a group that included previous investors August Capital, Insight Venture Partners, Ericsson, Sapphire Ventures, WestSummit Capital and new investor Goldman Sachs. While Intel did not disclose the total size of its investment from within the $100 million total, spokesperson Brian Garabedian says the investment's significant: "We believe OpenStack is the cornerstone of the open source software defined infrastructure option," he says. That strategy for Intel is to encourage its customers to set up their own cloud computing systems without a drop off in performance. As a deployment expert focused on OpenStack, Intel's trusting Mirantis to be that bridge.
An alliance with Intel will help OpenSource players build a viable alternative to Amazon Web Service's cloud computing, says Mirantis cofounder Alex Freedland. "The only way for the industry to have an answer to challenge the public cloud offering is to have a platform that works as well," says Freedland, also the company's president. "OpenStack came along as a challenger where everybody can participate, and now Intel is stepping up. Now it's putting serious money behind it. And choosing us as a leader."
This year, Intel become a platinum member of OpenStack alongside companies including AT&T and IBM. Since committing to OpenStack, Mirantis has swelled from less than 200 people to 750 and had raised a $100 million funding round led by Insight last October. The two companies plan to focus on features for enterprise customers to manage applications, rapid deployments, and the associated storage and network requirements for it.
As with other young consortiums of tech companies gathered around emerging infrastructure software, OpenStack has weathered accounts of tension and technical imperfections as its grown. HP and Red Hat the other two biggest contributors today. Freedland says a reputation for infighting is the result of "sensationalism," with tension only on the go-to market side, not on the collaboration itself.
"The space is humungously large and larger than any one company can possibly carry," says Freedland. "If Amazon wins this and gets an oligopoly, the whole innovative IT community of infrastructure application folks will die. So there's very strong collaboration happening in the community."
Mirantis, which has said for months that it hopes to eventually go public in a few months, believes that a vote of confidence from Intel will prove inaugurating in a similar way to Intel's bet on Cloudera in the Hadoop community. "It sends a message to the world that they have to play with OpenStack," Freedland says."
