What's the value of OpenStack leadership? $100M and counting

With 'the largest Series B open source investment in history', Mirantis must see how much growth it can sustain

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With $100 million of investors' capital fresh in its pockets, OpenStack vendor Mirantis now looks to plow that money back into major-league OpenStack R&D. The mission: To liberate users from both proprietary cloud infrastructures and the hassles of dealing with OpenStack as a technology.

Here's the bigger question: Can Mirantis -- and the other OpenStack vendors, come to think of it -- sustain the growth such a large investment would hint at? It's a particularly urgent issue for Mirantis, given the possibility of an IPO down the road (sometime in 2016, according to Bloomberg).

Mirantis has positioned itself as a go-to outfit for making OpenStack work. Aside from its roster of A-list customers (NASA, Samsung, Ericsson, and a slew of telecoms) for its own OpenStack distribution, it's also partnered with IBM to offer bare-metal hosted OpenStack as a service. The company has also positioned itself as a friend of open source, criticizing the presence of VMware in the OpenStack community and the use of vendor-specific certifications as a "'closed-door open source' play."

Small wonder, then, that Mirantis's professed use of the funds will be to "double its engineering investments in development of OpenStack software" as as way to "move companies from an expensive, lock-in infrastructure to an open cloud that empowers developers and end users at a fraction of the cost," as its press release and Mirantis president and CEO Adrian Ionel put it.

This doesn't represent a revolutionary change of approach for the company, merely an acceleration of its current trajectory. According to Stackalytics, which tracks participation in OpenStack by organization and release, Mirantis is the third-largest corporate contributor to OpenStack, behind HP and Red Hat. It's also clear that not every organization making hay from OpenStack necessarily contributes to it; Canonical, creators of the Ubuntu Linux distribution used most commonly with OpenStack, is number 43 on the Stackalytics list.

The announcement also shows that Mirantis is putting more emphasis on R&D for OpenStack than on its own growth as a company. Given how OpenStack's consistently struggled with finding a wider audience, that may be wise. According to Mirantis' press release, 451 Research's figures put the size of the OpenStack market at $3.3 billion by 2018. By contrast, the Hadoop market was valued at around $1.5 billion back in 2012, and according to one estimate may be worth around $50 billion by 2020, growing  50 percent each year.

OpenStack's main appeal lies with certain industry verticals -- namely, telecommunications and media -- which explains its smaller market. Those who promote and develop it, though, maintain it can serve a far larger audience. Members of OpenStack's own foundation believe the speed of iteration that OpenStack can unlock is itself a killer app and they aren't worried about its apparent narrowness of appeal. After all, they claim, vertical use cases provide OpenStack with some of its best tests of fitness.

True enough. And within the OpenStack community, Mirantis seems worthy of making good on its investment to make OpenStack bloom. The trick will be for Mirantis to calibrate its growth against a market that seems to be getting only so large and can sustain a set amount of major players.

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