Defending a $100 million round for your startup can be really easy or really hard — especially if it’s your second $100 million round.
Mirantis CEO Adrian Ionel did his part this week at OpenStack Silicon Valley, an industry-wide conference that Mirantis started last year. During a presentation for analysts, Ionel described Mirantis’ business as not only growing but also graduating into production deployments rather than proofs-of-concept.
Increasingly, OpenStack is brought in for “onboarding a first software initiative or a particular business unit,” he said. “We see fewer and fewer people doing just experiments.”
That’s not to say OpenStack has taken the world by storm. “Big rollouts require some serious spine from executives,” Ionel said, noting that OpenStack implementation is far from “frictionless.”
The complexity of the framework is why Intel spearheaded the $100 million funding that Mirantis announced earlier this week — a follow-up to the other $100 million round announced last year. Intel wants to make OpenStack easier for the everyday enterprise to adopt, and it plans to collaborate with Mirantis on the necessary engineering.
AT&T Thinks Big
Mirantis added 60 customers in the first half of 2015, bringing the total to 190, Ionel said. By comparison, the company added 72 customers during all of 2014.
With more than 600 engineers among its 750 employees, Mirantis is also taking pride in its voluminous contributions to the OpenStack Foundation. Its commits to the Kilo release numbered 3,018, up 68 percent from the preceding Juno release, and Mirantis contributors fixed 949 bugs in Kilo, topping the bug-fixers list.
As OpenStack users go, AT&T is particularly huge, deploying OpenStack globally as part of its goal to virtualize 75 percent of its network by 2020. Ionel guessed it’s the largest OpenStack initiative out there, and possibly the largest private cloud project as well.
“You’re talking half a million servers and hundreds of data centers. It’s massive scale,” he said. “We are proud to have won this against all the other major players.” (Ericsson is acting as Mirantis’ systems integration partner on the deal, he noted.)
That deployment is aimed largely at network functions virtualization (NFV), and AT&T is not alone in applying OpenStack there. NFV is probably one of the top three use cases that bring customers to Mirantis, Ionel said. Another is the development of new, cloud-native applications. Mirantis also sees OpenStack being applied to analytics loops, where customers want to iterate and optimize algorithms based on mounds of data extracted from the network.
As for what customers are buying — Mirantis offers services, but it also has a product, a paid and supported version of its OpenStack distribution. In what Ionel characterized as a typical curve for open source, product revenues are becoming more important as OpenStack gains acceptance.
Mirantis OpenStack is sold on a license basis, and those subscriptions comprised 33 percent of bookings in the first half of 2015, compared with 23 percent in 2014, Ionel said. Product revenues this year will probably exceed all of Mirantis’ 2013 revenues, he added.
“For the first time, we’re also seeing customers that are starting with a 70 percent product component for the initial deal,” Ionel said.
The Intel Deal
The recent funding (which included a $25 million “mad money” pool that Intel is making available to Mirantis) means Intel is now Mirantis’ big brother, in a sense, but by no means is Intel taking over the company, Ionel said. Intel is not a majority shareholder — not even close, he inferred — although it does have one seat on Mirantis’ board of six.
Aside from the money, Intel can contribute some of its 5,000 software engineers to the cause, Ionel said.
He also stressed that any work arising from the Intel-Mirantis collaboration will be offered to the OpenStack Foundation.
“The roadmap is open, and we can show it to you — and by the way, there is no guarantee that everything on this roadmap will be accepted,” Ionel said, trying to defuse any idea that Intel and Mirantis might be trying to take over OpenStack. “The process we will follow is the exact same process that we have been following with the OpenStack code base.”