Armed with $100M investment, OpenStack consultant Mirantis eyes an IPO

The OpenStack market is growing up fast

OpenStack consultancy Mirantis has raised a $100M funding round led by a cadre of venture capital firms and the CEO says he hopes to take the company public in 2016.

The move would be a big one for the OpenStack community and would mark the first company that has focused almost entirely on OpenStack from its inception to go public. The funding round is a massive cash infusion for Mirantis as it looks to compete with some big named vendors involved in OpenStack, including HP, Rackspace, Cisco, Dell and many others.

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Mirantis initially focused on advising clients on how to deploy OpenStack and it even open sourced a set of tools it had created for building OpenStack clouds. It also has a training and certification program for OpenStack. 

More recently Mirantis has become a distributor of the code itself. Whereas before it would help customers launch any flavor of OpenStack, now the company supports many competing distributions of OpenStack and has its own version it sells as well.

Mirantis CEO Adrian Ionel says the company has about 400 engineers, about half of which work on product research and development. He plans to double the number of product engineers with the new money, which he says requires “tremendous resources” to not only attract the needed talent but train them as well. Ionel also hopes to build up the company’s partner ecosystem with the new infusion of cash. The company hopes to pursue an initial public offering (IPO) to take itself public in 2016.

The Series B funding round was led by Insight Venture Partners, August Capital, as well as existing investors Intel Capital, WestSummit Capital, Ericsson, and SAP Ventures. 

OpenStack cloud software is an open source set of projects that when combined together can create a public or private cloud. The project just released the 10th version of its code, named Juno which now supports integrations with Hadoop and more options for users to customize their storage preferences, as well as new support for new databases.

Ionel says the nature of OpenStack is that it automates the “entire stack,” meaning that it can be a pervasive software throughout an organization that chooses to adopt it. A contract with a single large financial customer, he says, could yield upwards of $50 million to $100 million over the life of a multi-year contract, he says. Mirantis is in discussions for some mega deals, but Ionel would not say with which customers.

But, those deals are not guarantees. So, the company wanted to raise enough money to create a “buffer zone” in case some of the deals with its conservative customers do not come through.

Mirantis is an OpenStack darling company, and if it is able to successfully launch as a public company it would be a major boost for the project. It would prove that OpenStack not only helps end users build open source clouds, but also it can create some new publicly-traded companies.

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Copyright © 2014 IDG Communications, Inc.