Tag: VMware

The Big Clouds are All “Hybrid Clouds” Now!

First it was Azure stack, then came AWS/VMWare with AWS Outpost and now there is Google Anthos. Google announced general availability of its Anthos Cloud Services Platform at Google Next this week. Anthos has many elements but the telling one is that it lets you run Google Cloud on-premise and in other cloud environments.

As the number three provider with a new energized leader, you have to wonder if it’s too little, too late? Time will tell. What is interesting is that this move toward hybrid reflects what we are seeing in enterprise use of public clouds – they are all in as long as it’s hybrid. And increasingly multi-cloud.

While each of these offerings from the cloud providers is different, the unifying theme of the Anthos announcement is that the large public clouds are fully embracing the reality of the enterprise hybrid cloud.

So, what exactly does “hybrid cloud” mean? In short, it means that portions of an application or workload can run in your “on premise” data center while other portions run in a public cloud data center. This combination of public and private cloud infrastructure helps optimize the agility, cost, latency, and performance of workloads while minimizing the additional security and manageability requirements. It is especially helpful for existing apps that can move a portion of the overall workload (say storage backup or compute “bursting”) to the cloud. And, it is even better for new or existing applications that want to build or modernize workloads in a cloud native manner.

One way to do this is to have infrastructure on premise that looks and acts like the public cloud’s Infrastructure As A Services (IAAS) offered today by AWS or Azure. AWS Outpost and Microsoft’s Azure Stack are services that help in these use cases. Another approach is when you are trying to move or migrate portions of your application to the public cloud. This is what Google Anthos is all about

Why is Google doing this? First, they hope to compel you to modernize your infrastructure by embracing a lightweight virtualization technology called containers that are predominantly orchestrated/managed by a service called Kubernetes that was originally created at Google. The second reason is that once your application runs in containers it is more portable from one cloud (public or private) to another cloud. In this way, Google hopes to move applications off of AWS and Azure. Here is how the VentureBeat put it:

“It’s one thing to use a service like this for new applications, but many enterprises already have plenty of line-of-business tools that they would like to bring to the cloud as well. For them, Google is launching the first beta of Anthos Migrate today. This service will auto-migrate VMs from on-premises or other clouds into containers in the Google Kubernetes Engine.”

Being in a distant 3rd place position can lead to a counterintuitive strategy. And, Google could benefit from leading the efforts to make workloads portable in the cloud (both to move them from on premise to Google and to move them from AWS/Azure to Google). But, they will have competition in leading the containerization charge from VMWare, Redhat/IBM and in some forms the market leading clouds!

 

The Difficult Decision For Heptio To Sell to VMware

We are thrilled for Heptio’s acquisition by VMware! This transaction is another resounding reinforcement that Kubernetes has become the de facto standard for infrastructure across clouds. It is also a tremendous validation of Heptio’s team, vision and execution.

Deciding “when to sell” is one of the toughest decisions faced by founders, boards and investors in growing companies. When presented with an attractive alternative to continuing to build the company independently, boards have a “high class problem” — but one they must consider with utmost thoughtfulness. Heptio was presented a very difficult challenge in this regard.

Heptio was founded by Kubernetes co-creators, Joe Beda and Craig McLuckie, less than two years ago. Madrona had the privilege of investing with Accel in the $8.5M Series A round at the company’s formation, and I joined the board as an Observer. Since this Day One, I’ve never been associated with a company that has accomplished more in as short a period of time. Craig and Joe had an original vision that the Kubernetes’ community would continue to strengthen and its rapid adoption would continue to increase; however, it needed to become easier and enterprises needed help with adoption. From this starting point, they saw an opportunity to lead a cloud native transformation in the enterprise and redefine the deployment and operations of modern applications across clouds.

This vision has exactly played out, and Heptio backed it up with great execution landing a blue-chip array of Fortune 500 customers for their Heptio Kubernetes Service (HKS) including 3 of the 4 largest retailers in the world, 4 of the 5 largest telcos in the US, and 2 of the 6 largest financial services companies in the US. They also made significant impact on the Kubernetes community by contributing 5 OSS projects (ksonnet, sonobuoy, contour, gimbal, ark) and collecting over 5000 Github stars. With this great execution, more funding followed. Nine months in, Madrona led the $25M Series B and the company invited me to join the Board and my colleague Maria Karaivanova joined as an Observer.

Through it all, Craig and Joe were the consummate founders. They approached building their business with laser-focus and a driving ambition to genuinely help customers and create a large, lasting business in the process. They were rock stars in the Kubernetes community, but approached all interactions with humility and pragmatism. They were extremely strategic in thinking through potential moves on the industry chessboard in what is a very dynamic market; but they always realized that none of it would matter if not paired with week-in-week-out blocking and tackling. Perhaps most importantly, they were relentless recruiters and built a world-class team of over 100 employees in less than 2 years, attracting other great leaders like Shanis Windland, Marcus Holm and Scott Buchanan. In doing so, they walked the talk that culture and diversity matter deeply in building a successful business, often passing on a good hire in favor of the right hire who was an even stronger fit for the business.

So, why in the world did we decide to sell? In short, sometimes you receive an offer too good to refuse. Heptio had the team, momentum and plenty of funding to continue; but in VMware, they saw a partner who not only recognized Heptio’s unique insights, assets and market position, but also had the resources and reach to execute more quickly on their vision and deliver an enterprise Kubernetes service to any cloud. The excitement over this potential – and a great financial offer – drove this deal. Market consolidation was always anticipated, and this decision was certainly not a reaction to IBM acquiring Red Hat or other market externalities.

In this decision process, the role of the investor is to ensure the founders and management team have the broad perspective of “what might be possible,” provide an objective view on the market (both opportunities and risks), and ensure the company has the necessary resources. At the end of the day, we support the founders and management team. In this case, while this acquisition came sooner than anyone anticipated, we all agreed that the strategic fit and economics made joining forces the right decision. Through it all, Craig and Joe balanced the interests of shareholders and employees along with other strategic considerations in exactly the way you hope any founders would. Ping Li from Accel was also an incredible thought partner from before company formation through this decision, and overall was one of the best board directors I’ve ever had a chance to work with.

Congratulations again to the Heptio team! We wish you all the best in furthering your mission and vision via the leadership roles you are taking inside VMware. We are excited the whole team is staying intact in Seattle and will continue to grow here. This acquisition is also a great validation of our broader investment theme around the enterprise move to cloud native and open source, and we continue to be very excited about our related investments in companies like Tigera, Shippable, and Pulumi.

Now my and Madrona’s fortunate job is to go find the next great Day One company … but I know it will be difficult to find another quite like Heptio.