Vinod Khosla on the future of the data center and Mesosphere’s giant $36M round

By Michael Carney , written on December 8, 2014

From The News Desk

We’ve entered a new era of enterprise computing, according Vinod Khosla. Ask the Sun Microsystems co-founder and Khosla Ventures founding partner and he’ll explain the thing that separates today’s environment from decades past is that nearly every critical application and process runs across a distributed system, rather than on a single machine.

“All network management solutions are designed for a client services world,” Khosla tells me. “Almost every part of the old stack has been changed in pretty dramatic ways. Google designed a new kind of stack for itself, but this isn’t something other enterprises can buy.”

Mesosphere, a company founded by system architects from modern Internet giants like Twitter and AirBnB,  has set out to build a data center OS (DCOS) that will enable everyday enterprises to operate as efficiently as the world's most sophisticated technology organizations. Today, Mesosphere announced the details of its first ever commercial product, which will be available for purchase in early 2015, as well as $36 million in Series B financing to accelerate its product development and go-to-market efforts. The lead investor? Khosla Ventures. The round includes participation from existing investors Andreessen Horowitz*, Fuel Capital, SV Angel*, and others.

“I met them at the end of their last round. I told them then, I’m sorry we met you too late and missed out this time, but we want to be your first call the next time you’re ready to raise,” Khosla says. “It worked out nicely.” Speaking of the size of the round, he adds later, “They didn’t want to worry about money for a while and wanted to be able to build a big team. I don’t think we spend more than 5 minutes on the topic. We were more concerned with, ‘Can this become a big company?’ And I don’t think there’s any question the answer is, yes."

Built on the back of the Apache Mesos open source project – the Kernel of which has been hardened by Valley stalwarts like Twitter, Airbnb, Netflix, eBay, and PayPal – Mesosphere allows developers and data center operators to look beyond individual machines, be they physical or virtual, and instead build and deploy applications and services across entire datacenters. This could mean an end to the era of emergency pages going out late at night for failed machines or applications. Instead, Mesosphere can automate the process of spinning up instances of any necessary applications and processes on a new, un-utilized machine – something which is typically in abundance in any modern data center, given their poor historical utilization rates. As for deploying new applications, Mesosphere DCOS can take what would previously be a several day- or week-long process and reduced it to minutes, the company claims.

“We’ve taken a novel approach that means you can now program against an entire data center like it was one big computer,” Mesosphere co-founder and CEO Florian Leibert says. “There’s no need to write networking code and all distributed apps are managed under the covers. One question we were asked frequently early on is, ‘Are we too early?’ We feel like the timing couldn’t be better. We’re perfectly intersecting several important trends. No apps run on a single machine today, everything is distributed system. And it requires lots of work to make that robust, and it gets harder as these systems get bigger. Doing this manually is really inefficient and not terribly fault tolerant. The average data center utilization rate today is between 8 to 12 percent, which is abysmal.”

"There’s a lot of things going on in the data center that people haven’t realized," Khosla says. "For example, people didn't realize that virtualization was important until it was too late. People today are still talking about discreet functions, not operating sytems for the data center."

Mesosphere DCOS includes a command line and visual dashboard user interface, as well as key operating services systems like finder and storage. An accompanying API and SDK means that developers can build their own scalable applications to run on top of the system. Mesosphere natively supports distributed applications like Apache Spark, Apache Cassandra, and Google’s Kubernetes, as well as legacy Linux applications. Also, Mesosphere can run on premise on bare metal or in a virtualized private cloud environment, and works with third-party cloud platforms like Amazon AWS, Google GCE, Digital Ocean, Microsoft Azure, Rackspace, and VMware vCloud Air.

Mesosphere has raised $46.5 million to date and grown its team in both San Francisco and Hamburg, Germany to a total of 40 people. Leibert expects to see that number rise to 120 by the end of 2015, with growth coming across product, engineering, and sales.

A beta version Mesosphere DCOS is already in use among several unnamed “lighthouse” customers, according to Leibert, who says the company is seeing demand among Global 2000 corporations within the financial services, consumer electronics, and industrial manufacturing sectors, among others – all of which “share a need for a large numbers of data centers, and which view software as an area of differentiation,” he explains. The company is still ironing out its pricing structure, althought Liebert reveals that it will likely be based on a combination of usage and value delivered – meaning quantifiable cost savings as a result of deploying Mesosphere. The first version of Mesosphere DCOS is targeted at the enterprise, but going forward, the company plans to add a free, Community Edition product and will continue contributing to the open source community.

“We’re finding that companies are adopting Mesosphere around a single data set or innovative project that are particularly ripe for switchover,” Leibert says. “They start small, but as they see the value their cluster grows. We allow engineers to focus again on writing software rather than restarting software on machines that fail – the ROI is clear.”

[*Disclosure: Andreessen Horowitz partners Marc Andreessen, Jeff Jordan, and Chris Dixon are personal investors in Pando.]

[Image via BobMical, Flickr]