Platform9 Raises Series B to Accelerate Enterprise Success with OpenStack Private Clouds

I am excited to share that Platform9 has closed a Series B round led by Menlo Ventures and with participation from existing investor Redpoint Ventures. Menlo Ventures Managing Director Mark Siegel joins the Platform9 board alongside Redpoint Ventures’ Scott Raney. This round sets up Platform9 to scale to support a much larger customer base in the enterprise, building upon an excellent start from our first two quarters of sales.

I wanted to take this opportunity to share more insights into the factors that enabled this round, and what it enables us to achieve in the coming years.

Enterprise Demand for OpenStack Is Significant and Growing

We’re seeing significant and growing demand for OpenStack in the enterprise. Whether it is a VMware vSphere customer looking for streamlined VM provisioning and better developer enablement, a Linux environment looking to manage KVM, or a post-AWS startup looking for a private alternative, the conversation invariably leads to OpenStack.

Simply put: The enterprise needs a viable, easy complement to AWS: a vendor-neutral, developer centric infrastructure that offers better control on costs and leverages existing investments.

Platform9 Is Uniquely Solving the #1 Problem with Private Clouds

OpenStack has been seen for some time as the likely solution for customers looking to run private clouds. The problem has been that it is just too operationally difficult to run an OpenStack private cloud in production.

Consider the well known success stories with OpenStack: Paypal, Walmart, and Yahoo. Each of these organizations has 30-60 highly skilled developers managing their OpenStack code-base. In essence, they are running a proprietary OpenStack distribution that is optimized to work for their infrastructure, so they should serve as a baseline for efficiency. Based on publicly available information, let’s analyze the approximate operational cost of running OpenStack with economies of scale:

 # Dev/Ops Engineers for OpenStack Direct  Employee CostsTime To Production Fully Loaded Average OpenStack CostsAverage Scale of OpenStack infrastructureOpenStack Cost Per CPU Socket At Scale
   30-60 $6M-$12M per year1-2 years?~$10M per year~8000 CPU Sockets $1,250 per CPU Socket per year

In other words, these celebrated success stories are running (on average) a ~8000 CPU socket OpenStack private cloud for ~$10M per year; or $1,250 per CPU socket per year in running OpenStack.

The question is: how can every enterprise in the world get to production instantly with OpenStack with similar (or better!) economics?

That, in a nutshell, is exactly the question that Platform9 has uniquely answered. Platform9 Managed OpenStack is powering enterprise private clouds with not just a highly curated OpenStack distribution, but also providing the 24/7 SLA for uptime, scalability and zero-touch upgrades to newer releases.

Scaling Our Significant Early Traction, and Growing Our “Best-in-Class” Team

In just two quarters of sales since making Platform9 Managed OpenStack generally available, Platform9 has had multiple site-wide deployments with multiple household names now betting their private cloud infrastructure on us. That’s quite an achievement for a team that didn’t have a quota carrying sales team member until recently. It’s also a clear mandate from customers to help make private clouds easier.

The Series B fund-raise enables us to accelerate hiring and build the best team in the private cloud space. We’re continuing to grow our stellar engineering team with the top talent we’ve been fortunate to attract so far. In addition, we’re going to build a marketing and sales team that, like our product engineering team is “best-in-class”, accelerating go-to-market activities and scaling our enterprise customer base.

We’re excited to be seeing interest from some incredible talent across functions. Stay tuned for more on this front.

Accelerating Product Roadmap for Enterprise Customers

In the near-medium term, our product engineering team is sprinting to deliver the 2nd generation of our service: enabling enterprise-oriented features such as turnkey integrations with leading storage and networking solutions, enabling live migration and greater support for scale-out/load-balanced production deployments.

Building for the Long Term

Looking beyond, there are larger questions that enterprises are struggling with in the infrastructure space, that you can expect Platform9 to help answer. In particular, the enterprise needs more practical solutions to introduce and manage containers in an environment that contains significant virtualized assets. The enterprise also needs better controls to manage the use of public and private resources, and splitting these into silos is obviously not the answer.

We’re excited to be in this space because our team lives and breathes cloud infrastructure. We’re humbled by our early customer traction, and by the faith and confidence our customers and investors have reposed in us.

Here’s to your private cloud made easy!

Sirish Raghuram

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