Advanced Computing in the Age of AI | Saturday, December 9, 2023

OpenStack Investors Place Big Bet On Mirantis 

Investors continue to pour cash into the burgeoning open source ecosystem. Mirantis, which bills itself as one of the few pure-play OpenStack software vendors, announced a whopping $100 million Series B funding round led by Insight Venture Partners.

The Mountain View, California software firm claims the investment is the largest ever second round investment in an open source software company as well as one of the largest ever Series B business-to-business software investments.

Joining Insight Venture Partners were August Capital along with previous investors Intel Capital, WestSummit Capital, the investment arm of Sweden's Ericsson, Red Hat, and SAP Ventures. Mirantis said Alex Crisses, managing director of Insight Venture Capital, would join its board or directors.

Putting his money where his mouth is, Crisses praised Mirantis for delivering on the promise of OpenStack as a platform for reducing the cost of cloud computing. "Their customer traction has been phenomenal," Crisses stressed in statement.

Other investors said they expect the substantial investment to help it become a key open source cloud vendor. Its status as a pure-play OpenStack vendor will "trump the lock-in of traditional IT vendors," added Vivek Mehra, a general partner with August Capital. That investment firm has funded a host of cloud and other technology companies, including Microsoft, Skype, and Splunk.

Mirantis said it would use the war chest to double its engineering investments, including new investments in "zero lock-in OpenStack software" designed to help customers avoid putting all their IT investment in a single basket, or "vendor lock-in." OpenStack software development will include upgrades to its downloadable distribution, Mirantis OpenStack, and a hosted version called Mirantis OpenStack Express.

Mirantis claims to be the number three contributor to OpenStack, adding that future contributions would focus on enterprise-grade reliability and making OpenStack cloud software easier for enterprises to use.

The company also said it would use the Series B funding to expand operations in Europe and the Asia-Pacific region.

Mirantis said last year it had raised $20 million in earlier rounds of funding that included WestSummit Capital, Dell Ventures, Ericsson, Intel Capital, Red Hat and Sapphire Ventures. That funding was used to advance engineering of Fuel, its tool for managing and deploying OpenStack clouds.

Among the company's cloud customers are Cisco Systems, Comcast, DirecTV, Swedish telecommunications giant Ericsson, Expedia, Japan's NTT Docomo, PayPal, Symantec, and Samsung. Government customers include NASA.

Intel Capital said its investment was intended to help drive open source software into the software-defined infrastructure and cloud computing in datacenters. "Our investment is designed to accelerate industry adoption of cost-effective workload orchestration solutions," Jason Waxman, vice president of Intel's Data Center Group and general manager of the chipmaker's Cloud Platform Group, said in a statement.

Mirantas president and CEO Adrian Ionel added that the huge investment illustrates how the company is riding a wave of open source enthusiasm that has resulted in a four-fold increase in its business to about $1 million in customer signings each week.

The OpenStack specialist attributes the steady uptick in its business to an open partner ecosystem and its focus on being an "upstream contributor" to OpenStack in order to influence the direction of the open source technology for cloud scaling.

About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).