Intel puts engineering and financial muscle behind OpenStack with $100m Mirantis funding boost

The OpenStack open-source cloud-computing platform stands to gain more enterprise features thanks to a major financial and engineering deal between Intel and Mirantis.

Mirantis co-founder and chairman Alex Freedland: It's a major chance for OpenStack to level the playing field. Image: Mirantis
OpenStack firm Mirantis says a financial and technology alliance with chip giant Intel unveiled today, which includes a $100m investment, will significantly strengthen the hand of the open-source cloud project by speeding up the introduction of more enterprise features.

Along with Intel and Mirantis engineers collaborating in the community on OpenStack high availability, storage, network integration and support for big data, Intel Capital has led a $100m funding round with new investor Goldman Sachs.

Existing investors August Capital, Insight Venture Partners, Ericsson, Sapphire Ventures and WestSummit Capital also participated in the investment, which consists of equity and spending.

"The deal here is that we're partnering with Intel to put a lot more dollars into making OpenStack enterprise-ready sooner," Mirantis co-founder and chairman Alex Freedland said.

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"Intel is actually providing us with cash, so they've bought a co-development subscription from us. Then, in addition, we've strengthened our balance sheet by putting more equity financing dollars into the company. So overall the total funds are at $100m.

"In the end, this collaboration that's happening and Intel's dollars, there's nothing proprietary in it. All of that is flowing directly into open source; there's no IP that goes to Intel. All this is community-driven, so everyone will be able to take advantage of it."

OpenStack is an open-source project started in 2010 by Rackspace and NASA to create components for building public and private clouds on standard hardware.

It is now backed by more than 200 vendors, including Cisco, Dell, Google, HP, IBM, Intel, Oracle, Red Hat, and VMware, with a large developer community working on a range of loosely-coupled projects.

"It's clear that OpenStack now is one of the major contenders when CIOs are making decisions on what will drive their cloud infrastructures. We're early days in the cloud and it's really a three-horse race right now. It's VMware, Microsoft and OpenStack," Freedland said.

"But there's another battle going on and that is in 10 years what percentage of workloads are going to be on prem and what percentage are going to be on public cloud and what percentage will be in a dedicated private-cloud, service-provider arrangement? That landscape is now up in the air."

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The competition between OpenStack and its rival platforms explains why Intel and Mirantis are collaborating over the issue of enterprise functionality.

"It essentially evens the amount of investment as compared with those other horses. So OpenStack is becoming a first-class citizen when those CIO decisions are getting made - and it's happening faster because cloud adoption is not going to wait. So, for OpenStack it's very important. It's a major chance for it to level the playing field and become a major force in the cloud infrastructure game," Freedland said.

The other goal of the collaboration and investment is to even up the odds between the on-premise infrastructures and hyper-scalers Amazon and Google.

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Ensuring a rich ecosystem thrives around OpenStack remains essential for the future of Mirantis.

"What will computing look like? Will it be an oligopoly of three very large players or will there be a diverse ecosystem of innovation. This [investment] is a move towards the latter and that is very important for the industry as a whole," Freedland said.

"It puts us on the map as a category leader in the open cloud movement which is very important for us. Also, it signals for the industry that Mirantis are the go-to folks when you run on top of scaleout Intel server infrastructures.

"This collaboration agreement allows us to have an understanding of Intel's roadmap and we're able to make sure OpenStack is optimised for where Intel is going as well. Intel today is the dominant platform for scaleout commodity hardware. So this is a very important partnership from that perspective."

Along with $20m secured in its initial funding round, Mirantis raised $100m nine months ago.

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