Intel Pays Mirantis $25m for OpenStack Expertise

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Intel’s OpenStack interest goes further than just funding as firm seemingly splurges $25m on ‘OpenStack resources’ from Mirantis

Intel is paying Mirantis $25 million (around £16m) for the expertise of the firm’s OpenStack services, with Mirantis putting OpenStack resources “upstream” to Intel to help understand and improve its own knowledge of the platform.

The cash was subtly hidden in last week’s investment announcement that Intel, among other investors, was pumping $100 million into Mirantis to advance OpenStack.

$75 million

But financial documents show that the Series C funding round, which included investors Goldman Sachs, Ericsson, Sapphire Ventures, August Capital, Insight Venture Partners, and WestSummit Capital, was actually an equity sale for just $75 million.

openstackThe $100 million figure stipulated by Mirantis’ and Intel’s respective press teams actually included the $25 million straight up offering that will see Intel buy OpenStack knowledge from Mirantis.

“The other $25 million is for basically what we refer to as co-development funds,” Mirantis co-founder Boris Renski told TechWeekEurope at OpenStack Silicon Valley.

Renski said in an interview: “Intel is interested in getting OpenStack to a greater degree of maturity, and we at Mirantis compared notes and we found some areas where we are kind of aligned in our thinking in terms of where OpenStack needs to go and what are the important areas.

“We, as a company, gave a commitment to Intel that we’ll put resources upstream to improve OpenStack in those areas.”

So there you have it. Intel’s contribution in the $75 million was a “meaningful percentage”, said Renski. But now we have this extra $25 million that’s not funding at all, but what seems to be rather a straight up splash of cash on OpenStack expertise, software, and hardware.

Intel, whilst confusingly denying any such spend, told TechWeekEurope that “the types of things that could be considered “spend” are marketing, engineering resources, etc. that would essentially benefit both companies by accelerating the use of OpenStack”.

Intel declined to elaborate on what it deems as ‘engineering resources’.

The heart of Intel’s interest in OpenStack is to hopefully, eventually, boost sales of its own products as OpenStack users plug Intel hardware into their own data centres. Intel first invested in Mirantis in 2013, where the pure-play OpenStack provider received $10 million (£6.4m) to aid its OpenStack distribution plans. Mirantis has now managed to raise a backing of around $220 million (£140m), helped by a previous $100 million funding last year led by Insight Venture Partners.

Shift

The money comes at a time when Mirantis is speeding up its OpenStack play. “It’s not a relaxed atmosphere, it’s very intense,” Renski told TechWeekEurope. Renski likened the working environment to that of Google’s.

“We have recently made a couple of cultural moves to be able to decentralise the decision making, that was absolutely necessary to make the company move and evolve in a fast moving space. I’d like to think it’s more like Google, than say, Oracle.”

openstackBut despite increased interest and OpenStack activity, Renski denied that Mirantis could one day be open for an acquisition, either by Intel or others.

“Never say never,” said Renski. “But I think it’s highly unlikely we’ll get acquired period. First of all, we’re not actively looking to be acquired at the moment, second, I think that also the sheer size that we have right now as a company makes us a not very interesting acquisition.”

OpenStack Silicon Valley

TechWeekEurope also quizzed Renski on the current state of OpenStack. OpenStack Silicon Valley witnessed a modest buzz amongst attendees on OpenStack’s fifth birthday, but for Renski, it’s clear the job is nowhere near finished. Disregarding the idea that OpenStack is ready to take down its main competitor Amazon Web Services (AWS), Renski went as far to say that OpenStack relies on AWS to merely exist.

“AWS is central to the evolution of OpenStack. We see a huge market that is being disrupted by the self-service cloud model,” said Renski.

“OpenStack is one of those things. If AWS wasn’t there, I’m not sure that OpenStack itself would be able to disrupt the market. It needs to be disrupting to continue to move forward so the bigger Amazon becomes the bigger the disruption opportunity for OpenStack becomes.”

Renski also lambasted container giant Docker for not getting involved in the OpenStack community. He said that there is a stark contrast in Google’s involvement with OpenStack compared to Docker.

openstack“I’m very happy that Google is involved. Unlike in some other case, Google in genuinely interested in OpenStack succeeding and sharing [its] expertise around containers and bringing that to OpenStack, instead of being like Docker.

“Docker’s position is ‘screw everybody’. From the standpoint of embracing other phenomenon and communities they are closed. You don’t see them here. They’re the only vendor, despite focussed efforts to bring them into OpenStack, they are like screw everyone else.”

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