Thakker: Early bet on Mirantis validated by $100M in new funding

Guest Post by Dharmesh Thakker, Intel Capital

At Intel Capital, where I manage Enterprise Software investments, we have a long-term view on secular shifts in computing, working alongside strategic partners and industry leaders like VMware, Cisco, HP and Amazon Web Services. A couple of years ago, we spent a fair bit of time evaluating cloud operating frameworks that provide the same flexibility, cost structure and agility as Linux did for x86 infrastructure a decade ago.

We had conviction in OpenStack, and we were the first investors in Mirantis in early 2013 — driven mostly by the team’s clarity of vision, deep technical bench and open source community influence. Just 18 months later, and on the back of solid customer acquisition, the company this week announced a $100M Series B round. I’m glad to join forces with Insight Venture Partners and August Capital, who’ve been behind Splunk, Docker, New Relic and others, to collectively help drive Mirantis as a key ingredient of hyper-scale cloud infrastructure.

The Big Deal That Almost Wasn’t!

I first heard about Mirantis from our investment team in Moscow. At Intel Capital, we believe innovation is global, and open source software has democratized enterprise innovation. As a result, we have investors looking for enterprise opportunities across Israel, Eastern Europe, India and China.

My team had gotten wind of a company in Saratov, more than 500 miles from the Russian capital. Once a fortress city that protected trade along the Volga River, today it boasts some of the best engineering schools in the country.

Mirantis had some of the brightest minds on staff, many with Ph.D. degrees in math and computer science, including a couple of worldwide gold medalists in ACM software contests. After hearing their founder’s presentation at a scantily attended OpenStack conference in late 2012, I boarded a plane to Moscow and then Saratov (on a retired Soviet jet – the only way to get there!) to spend a week with the core engineering team.

At first glance, the team didn’t have the typical attributes venture investors look for. What they did have is clarity of vision to jump on OpenStack two years ahead of the market; recognition of the fact that they had a once-in-a-lifetime opportunity to build a lasting enterprise; and a relentless drive to make the most of that opportunity.

The three founders complemented each other very well: Alex Freedland could find and coach stellar engineers, Boris Renski had strong influence on the open source community, and Adrian Ionel combined product vision and stellar sales and partnership execution. We decided to lead the company’s $10M Series A round, and we’ve been working alongside them as they’ve increased revenues manyfold and acquired more than 130 OpenStack customers. Those include leading enterprises (like Comcast, Expedia and Symantec) as well as leading telecommunications/cloud service providers (such as Huawei, NTT, Orange and Tata Communications). The company also signed the largest OpenStack deal to date with Ericsson. And it has expanded its presence across China and Europe (Poland, France, Netherlands) to best support that global customer base.

Onward and Upward

As Moore’s Law continues to march forward, it’s delivering the processing power to enable the next-gen, software-defined datacenter. OpenStack, I believe, unleashes the power of hyper-scale SD infrastructure, providing the flexibility and IT agility most enterprises today seek. Having been through a similar transition from vertically integrated mainframes to Linux enabled x86 infrastructure, Intel Capital is familiar with the opportunity the massive OpenStack transition represents.

From here on, the Mirantis team has enormous opportunity to support bare-metal, virtual and container-oriented infrastructure at the core. Along the way, our partnership is focused on integrating with orchestration, performance management and apps-deployment tools at higher levels of the stack.

We’re in the early stages of the datacenter stack fundamentally being re-written. The Mirantis team is working hard with other OpenStack ecosystem vendors to enable that evolution. The $100M in new funding from top-tier partners – Insight and August – isn’t just a validation of our early bet on Mirantis, but it’s also a key driver that will accelerate OpenStack’s evolution within enterprise hybrid clouds.

We look forward to helping the Mirantis team on the next leg of that exciting journey.

Dharmesh Thakker leads Cloud Software and Big Data Investments globally at Intel Capital. If you have an interesting application in these areas, drop him a note at: dharmesh.d.thakker@intel.com.

This blog is cross-posted from Intel Capital.

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