The archive · Developer & Business Tools · Financial decision · 2013–2016
Mesosphere's $73.5M round backed its bet on a Mesos data-center OS
HPE led Mesosphere's $73.5M Series C on 2016-03-24 to scale its Apache Mesos-based data-center OS into CI/CD with Microsoft aboard.
Mesosphere
What the business is
Mesosphere sells a commercial data-center operating system built on Apache Mesos: an enterprise edition, with a free community version, that runs, schedules and monitors containers plus Hadoop, Spark and databases across all of a company's servers and public clouds.
Starting capital：A $36 million round announced the previous December (per VentureBeat's April 2015 report), then the $73.5 million Series C announced 2016-03-24, led by Hewlett Packard Enterprise with Microsoft participating.
How it started
Mesosphere was founded in 2013 in San Francisco on a premise it first talked about publicly months later: an operating system for every server in a data center, or across the servers a company uses in a public cloud. Its stack was built on Apache Mesos, the open-source cluster manager. In April 2015 the company began accepting applications for early access to its data center operating system, pairing a free community edition with a premium enterprise edition, and announced that Google's Kubernetes was fully integrated with the platform, with Google an ally since the prior year.
What happened
Growth capital preceded the 2016 wave: VentureBeat's April 2015 report noted a $36 million round announced the previous December. On 2016-03-24 Mesosphere announced a $73.5 million Series C led by Hewlett Packard Enterprise with Microsoft participating; A Capital, Andreessen Horowitz, Fuel Capital, Khosla Ventures and Triangle Peak Partners also joined. The same day it released Marathon 1.0, the open-source software for managing containers on top of Mesos, and launched Velocity, a continuous-integration and continuous-delivery product built on Marathon that integrates with the open-source Jenkins CI tool. Marathon was already part of Microsoft's recently launched Azure Container Service for deploying container-based applications on Azure. Mesosphere said eBay and other major companies already ran massive CI/CD environments built on Mesos, Jenkins, Docker and related tools, and positioned Velocity as bringing those capabilities to every type of company; a spokesperson put its customer count at more than three dozen.
How it ended up
As of the 2016-03-24 announcement Mesosphere was scaling: it had closed the $73.5M Series C, shipped Marathon 1.0, launched Velocity and counted more than three dozen customers, with the sources recording no later milestone.
Background
Mesosphere is a San Francisco startup, founded in 2013, that sells a 'data center operating system' built on Apache Mesos. Its founding idea was that software should not stop at one machine: one OS layer would span every server in a data center or across a public cloud, running containers and big-data workloads alike. It was commercialized Cloudera-style — Apache Mesos and Marathon open source beneath, a free community edition and a paid enterprise edition above — and in April 2015 the company opened an early-access program for the data-center OS with Google's Kubernetes fully integrated.
On 2016-03-24 Mesosphere announced a $73.5 million Series C led by Hewlett Packard Enterprise with Microsoft participating, released Marathon 1.0 — the open-source container manager on Mesos — and launched Velocity, a CI/CD tool built on Marathon that integrates with Jenkins. Marathon already sat inside Microsoft's Azure Container Service, and Mesosphere cited eBay-scale Mesos/Jenkins/Docker environments to argue every company would need the platform; a spokesperson put customers at more than three dozen.
The HN post of the announcement drew 136 points and 13 comments on 2016-03-24, and the debate turned immediately on the business model: one commenter quoted the 'three dozen customers' line and asked whether they were paying enough for the numbers to add up on an open-core model, while a user from Valassis Digital said his company ran Mesosphere Enterprise DC/OS in production and saw the category as infrastructure's future, comparing it to Hadoop's early days with Cloudera support as a safety net.
What has to be true
- Mesosphere bet on the whole layer, not a tool: an OS for every server in a data center was an unusually wide claim for a 2013 startup to monetize.
- Open source fed the business: Mesos and Marathon stayed free while the company sold a community edition, an enterprise edition and support — the Cloudera pattern applied to cluster infrastructure.
- The Series C was a distribution signal: Microsoft shipping Marathon inside Azure Container Service and HPE leading the round gave Mesosphere anchors no point tool could match.
- The launch thread put the model on trial immediately, asking whether 'more than three dozen' customers could pay enough — the question that decides any open-core platform.
What can be applied
The widest bet — 'the data center operating system' — still lives on distribution: Azure and HPE validated Marathon, while open-core economics (do enough customers pay?) stayed the deciding question.
Aftermath
As of 2016-03-24 Mesosphere was scaling: it had closed the $73.5 million Series C, shipped Marathon 1.0 as open source, launched the Velocity CI/CD product, counted more than three dozen customers and could cite eBay-scale Mesos/Jenkins/Docker environments as proof of the pattern. The material covers only the announcement window, so these records hold no later milestones.
Sources
- Mesosphere raises $73.5 million with Microsoft participating, launches Velocity tool
- Mesosphere launches early-access program for its data center operating system
- Mesosphere raises $73.5M with Microsoft participating
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