Nov
06
2018
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VMware acquires Heptio, the startup founded by 2 co-founders of Kubernetes

During its big customer event in Europe, VMware announced another acquisition to step up its game in helping enterprises build and run containerised, Kubernetes-based architectures: it has acquired Heptio, a startup out of Seattle that was co-founded by Joe Beda and Craig McLuckie, who were two of the three people who co-created Kubernetes back at Google in 2014 (it has since been open sourced).

Beda and McLuckie and their team will all be joining VMware in the transaction.

Terms of the deal are not being disclosed — VMware said in a release that they are not material to the company — but as a point of reference, when Heptio last raised money — a $25 million Series B in 2017, with investors including Lightspeed, Accel and Madrona — it was valued at $117 million post-money, according to data from PitchBook.

Given the pedigree of Heptio’s founders, this is a signal of the big bet that VMware is taking on Kubernetes, and the belief that it will become an increasing cornerstone in how enterprises run their businesses. The larger company already works with 500,000+ customers globally, and 75,000 partners. It’s not clear how many customers Heptio worked with but they included large, tech-forward businesses like Yahoo Japan.

It’s also another endorsement of the ongoing rise of open source and its role in cloud architectures, a paradigm that got its biggest boost at the end of October with IBM’s acquisition of RedHat, one of the biggest tech acquisitions of all time at $34 billion.

Heptio provides professional services for enterprises that are adopting or already use Kubernetes, providing training, support and building open-source projects for managing specific aspects of Kubernetes and related container clusters, and this deal is about VMware expanding the business funnel and margins for Kubernetes within it its wider cloud, on-premise and hybrid storage and computing services with that expertise.

“Kubernetes is emerging as an open framework for multi-cloud infrastructure that enables enterprise organizations to run modern applications,” said Paul Fazzone, senior vice president and general manager, Cloud Native Apps Business Unit, VMware, in a statement. “Heptio products and services will reinforce and extend VMware’s efforts with PKS to establish Kubernetes as the de facto standard for infrastructure across clouds upon closing. We are thrilled that the Heptio team led by Craig and Joe will be joining VMware to help us guide customers as they move to a multi-cloud world.”

VMware and its Pivotal business already offer Kubernetes-related services by way of PKS, which lets organizations run cloud-agnostic apps. Heptio will become a part of that wider portfolio.

“The team at Heptio has been focused on Kubernetes, creating products that make it easier to manage multiple clusters across multiple clouds,” said Craig McLuckie, CEO and co-founder of Heptio. “And now we will be tapping into VMware’s cloud native resources and proven ability to execute, amplifying our impact. VMware’s interest in Heptio is a recognition that there is so much innovation happening in open source. We are jointly committed to contribute even more to the community—resources, ideas and support.”

VMware has made some 33 acquisitions overall, according to Crunchbase, but this appears to have been the first specifically to boost its position in Kubernetes.

The deal is expected to close by fiscal Q4 2019, VMware said.

Oct
22
2018
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Pulumi raises $15M for its infrastructure as code platform

Pulumi, a Seattle-based startup that lets developers specify and manage their cloud infrastructure using the programming language they already know, today announced that it has raised a $15 million Series A funding round led by Madrona Venture Group. Tola Capital also participated in this round and Tola managing director Sheila Gulati will get a seat on the Pulumi board, where she’ll join former Microsoft exec and Madrona managing director S. Somasegar.

In addition to announcing its raise, the company also today launched its commercial platform, which builds upon Pulumi’s open-source work.

“Since launch, we’ve had a lot of inbound interest, both on the community side — so you’re seeing a lot of open source contributions, and they’re really impactful contributions, including, for example, community-led support for VMware and OpenStack,” Pulumi co-founder and CEO Eric Rudder told me. “So we’re actually seeing a lot of vibrancy in the open-source community. And at the same time, we have a lot of inbound interest on the commercial side of things. That is, teams wanting to operationalize Pulumi and put it into production and wanting to purchase the product.”

So to meet that opportunity, the team decided to raise a new round to scale out both its team and product. And now, that product includes a commercial offering of Pulumi with the company’s new ‘team edition.’ This new enterprise version includes support for unlimited users, integrations with third-party tools like GitHub and Slack, as well as role-based access controls and onboarding and 12×5 support. Like the free, single-user community edition, the team edition is delivered as a SaaS product and supports deployments to all of the major public and private cloud platforms.

“We’re all seeing the same things — the cloud is a foregone conclusion,” Tola’s Gulati told me when I asked her why she was investing in Pulumi. “Enterprises have a lot of complexity as they come over the cloud. And so dealing with VMs, containers and serverless is a reality for these enterprises. And the ability to do that in a way that there’s a single toolset, letting developers use real programming languages, letting them exist where they have skills today, but then allows them to bring the best of cloud into their organization. Frankly, Pulumi really has thought through the existing complexity, the developer reality, the IT and develop a relationship from both a runtime and deployment perspective. And they are the best that we’ve seen.”

Pulumi will, of course, continue to develop its open source tools, too. Indeed, the company noted that it would invest heavily in building out the community around its tools. The team told me that it is already seeing a lot of momentum but with the new funding, it’ll re-double its efforts.

With the new funding, the company will also work on making the onboarding process much easier, up to the point where it will become a full self-serve experience. But that doesn’t work for most large organizations, so Pulumi will also invest heavily in its pre- and post-sales organization. Right now, like most companies at this stage, the team is mostly composed of engineers.

Aug
29
2018
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Google takes a step back from running the Kubernetes development infrastructure

Google today announced that it is providing the Cloud Native Computing Foundation (CNCF) with $9 million in Google Cloud credits to help further its work on the Kubernetes container orchestrator and that it is handing over operational control of the project to the community. These credits will be split over three years and are meant to cover the infrastructure costs of building, testing and distributing the Kubernetes software.

Why does this matter? Until now, Google hosted virtually all the cloud resources that supported the project, like its CI/CD testing infrastructure, container downloads and DNS services on its cloud. But Google is now taking a step back. With the Kubernetes community reaching a state of maturity, Google is transferring all of this to the community.

Between the testing infrastructure and hosting container downloads, the Kubernetes project regularly runs more than 150,000 containers on 5,000 virtual machines, so the cost of running these systems quickly adds up. The Kubernetes container registry has served almost 130 million downloads since the launch of the project.

It’s also worth noting that the CNCF now includes a wide range of members that typically compete with each other. We’re talking Alibaba Cloud, AWS, Microsoft Azure, Google Cloud, IBM Cloud, Oracle, SAP and VMware, for example. All of these profit from the work of the CNCF and the Kubernetes community. Google doesn’t say so outright, but it’s fair to assume that it wanted others to shoulder some of the burdens of running the Kubernetes infrastructure, too. Similarly, some of the members of the community surely didn’t want to be so closely tied to Google’s infrastructure, either.

“By sharing the operational responsibilities for Kubernetes with contributors to the project, we look forward to seeing the new ideas and efficiencies that all Kubernetes contributors bring to the project operations,” Google Kubernetes Engine product manager William Deniss writes in today’s announcement. He also notes that a number of Google’s will still be involved in running the Kubernetes infrastructure.

“Google’s significant financial donation to the Kubernetes community will help ensure that the project’s constant pace of innovation and broad adoption continue unabated,” said Dan Kohn, the executive director of the CNCF. “We’re thrilled to see Google Cloud transfer management of the Kubernetes testing and infrastructure projects into contributors’ hands — making the project not just open source, but openly managed, by an open community.”

It’s unclear whether the project plans to take some of the Google-hosted infrastructure and move it to another cloud, but it could definitely do so — and other cloud providers could step up and offer similar credits, too.

Aug
27
2018
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VMware acquires CloudHealth Technologies for multi-cloud management

VMware is hosting its VMworld customer conference in Las Vegas this week, and to get things going it announced that it’s acquiring Boston-based CloudHealth Technologies. They did not disclose the terms of the deal, but Reuters is reporting the price is $500 million.

CloudHealth provides VMware with a crucial multi-cloud management platform that works across AWS, Microsoft Azure and Google Cloud Platform, giving customers a way to manage cloud cost, usage, security and performance from a single interface.

Although AWS leads the cloud market by a large margin, it is a vast and growing market and most companies are not putting their eggs in a single vendor basket. Instead, they are looking at best of breed options for different cloud services.

This multi-cloud approach is great for customers in that they are not tied down to any single provider, but it does create a management headache as a consequence. CloudHealth gives multi-cloud users a way to manage their environment from a single tool.

CloudHealth multi-cloud management. Photo: CloudHealth Technologies

VMware’s chief operating officer for products and cloud services, Raghu Raghuram, says CloudHealth solves the multi-cloud operational dilemma. “With the addition of CloudHealth Technologies we are delivering a consistent and actionable view into cost and resource management, security and performance for applications across multiple clouds,” Raghuram said in a statement.

CloudHealth began offering support for Google Cloud Platform just last month. CTO Joe Kinsella told TechCrunch why they had decided to expand their platform to include GCP support: “I think a lot of the initiatives that have been driven since Diane Greene joined Google [at the end of 2015] and began really driving towards the enterprise are bearing fruit. And as a result, we’re starting to see a really substantial uptick in interest.”

It also gave them a complete solution for managing across the three of the biggest cloud vendors. That last piece very likely made them an even more attractive target for a company like VMware, who apparently was looking for a solution to buy that would help customers manage across a hybrid and multi-cloud environment.

The company had been planning future expansion to manage not just the public cloud, but also private clouds and data centers from one place, a strategy that should fit well with what VMware has been trying to do in recent years to help companies manage a hybrid environment, regardless of where their virtual machines live.

With CloudHealth, VMware not only gets the multi-cloud management solution, it gains its 3000 customers which include Yelp, Dow Jones, Zendesk and Pinterest.

CloudHealth was founded in 2012 and has raised over $87 million. Its most recent round was a $46 million Series D in June 2017 led by Kleiner Perkins. Other lead investors across earlier rounds have included Sapphire Ventures, Scale Venture Partners and .406 Ventures.

Aug
26
2018
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Rebuilding employee philanthropy from the bottom up

In tech circles, it would be easy to assume that the world of high-impact charitable giving is a rich man’s game where deals are inked at exclusive black tie galas over fancy hors d’oeuvre. Both Mark Zuckerberg and Marc Benioff have donated to SF hospitals that now bear their names. Gordon Moore has given away $5B – including $600M to Caltech – which was the largest donation to a university at the time. And of course, Bill Gates has already donated $27B to every cause imaginable (and co-founded The Giving Pledge, a consortium of billionaires pledging to donate most of their net worth to charity by the end of their lifetime.)

For Bill, that means he has about $90B left to give.

For the average working American, this world of concierge giving is out of reach, both in check size, and the army of consultants, lawyers and PR strategists that come with it. It seems that in order to do good, you must first do well. Very well.

Bright Funds is looking to change that. Founded in 2012, this SF-based startup is looking to democratize concierge giving to every individual so they “can give with the same effectiveness as Bill and Melinda Gates.” They are doing to philanthropy what Vanguard and Wealthfront have done for asset management for retail investors.

In particular, they are looking to unlock dollars from the underutilized corporate benefit of matching funds for donations, which according to Bright Funds is offered by over 60% of medium to large enterprises, but only used by 13% of employees at these companies. The need for such a service is clear — these programs are cumbersome, transactional, and often offline. Make a donation, submit a receipt, and wait for it to churn through the bureaucratic machine of accounting and finance before matching funds show up weeks later.

Bright Funds is looking to make your company’s matching funds benefit as accessible and important to you as your free lunches or massages. Plus, Bright Funds charges companies per seat, along with a transaction fee to cover the cost of payment processing, sparing employees any expense.

It’s a model that is working. According to Bright Fund’s CEO Ty Walrod, Bright Funds customers see on average a 40% year-over-year increase in funds donated through the platform. More importantly, Bright Funds not only transforms an employee’s relationship to personal philanthropy, but also to the company they work for.

Grassroots Giving

This model of bottoms-up giving is a welcome change from the big foundation model which has recently been rocked by scandal. The Silicon Valley Community Foundation was the go-to foundation for The Who’s Who of Silicon Valley elite. It rode the latest tech boom to become the largest community foundation in eleven short years with generous stock donations from donors like Mark Zuckerberg ($1.8 billion), GoPro’s Nicholas Woodman ($500 million), and WhatsApp co-founder Jan Koum ($566 million). Today, at $13.5 billion, it surpasses the 80+ year old Ford Foundation in endowment size.

However, earlier this year, their star fundraiser Mari Ellen Loijens (credited with raising $8.3B of the $13.5B) was accused of repeatedly bullying and sexually harassing coworkers, allegations that the Foundation had “known about for years” but failed to act upon. In 2017, a similar case occurred when USC’s star fundraiser David Carrera  stepped down on charges of sexual harassment after leading the university’s historic $6 billion fundraising campaign.

While large foundations and endowments do important work, their structure relies too much on whale hunting for big checks, giving an inordinate amount of power to the hands of a small group of talented fund raisers.

This stands in contrast to Bright Funds’ ethos — to lead a grassroots movement in empowering individual employees to make their dollar of giving count.

Rebuilding charitable giving for the platform age

Bright Funds is the latest iteration of a lineup of workplace giving platforms. MicroEdge and Cybergrants paved the way in the 80s and 90s by digitizing the giving experience, but was mainly on-premise, and lacked a focus on user experience. Benevity and YourCause arrived in 2007 to bring workplace giving to the cloud, but they were still not turnkey solutions that could be easily implemented.

Bright Funds started as a consumer platform, and has retained that heritage in its approach to product design, aiming to reduce friction for both employee and company adoption. This is why many of their first customers were midsized tech startups with limited resources and looking for a turnkey solution, including Eventbrite, Box, Github, and Contently . They are now finding their way upmarket into larger, more established enterprises like Cisco, VMWare, Campbell’s Soup Company, and Sunpower.

Bright Funds approach to product has brought a number of innovations to this space.

The first is the concept of a cause-focused “fund.” Similar to a mutual fund or ETF, these funds are portfolios of nonprofits curated by subject-matter experts tailored to a specific cause area (e.g. conservation, education, poverty, etc.). This solves one of the chief concerns of any donor — is my dollar being put to good use towards the causes I care about? Passionate about conservation? Invest with Jim Leape from the Stanford Woods Institute for the Environment, who brings over three decades of conservation experience in choosing the six nonprofits in Bright Fund’s conservation portfolio. This same expertise is available across a number of cause areas.

Additionally, funds can also be created by companies or employees. This has proven to be an important rallying point for emergency relief during natural disasters, where employees at companies can collectively assemble a list of nonprofits to donate to. In 2017, Cisco employees donated $1.8 million (including company matching) through Bright Funds to Hurricanes Harvey, Maria, and Irma as well as the central Mexico earthquakes, the current flooding in India and many more.

The second key feature of their product is the impact timeline, a central news feed to understand where your dollars are going across all your cause areas. This transforms giving from a black box transaction to an ongoing dialogue between you and your charities.

Lastly, Bright Funds wants to take away all the administrative burden that might come with giving and volunteering — everything from tracking your volunteer opportunities and hours, to one-click tax reporting across all your charitable donations. In short, no more shoeboxes of receipts to process through in April.

Doing good & doing well

Although Bright Funds is focused on transforming the individual giving experience, it’s paying customer at the end of the day is the enterprise.

And although it is philanthropic in nature, Bright Funds is not exempt from the procurement gauntlet that every enterprise software startup faces — what’s in it for the customer? What impact does workplace giving and volunteering have on culture and the bottom line?

To this end, there is evidence to show that corporate social responsibility has a an impact on recruiting the next generation of workers. A study by Horizon Media found that 81% of millennials expect their companies to be good corporate citizens. A separate 2015 study found that 62% of millennials said they’d take a pay cut to work for a company that’s socially responsible.

Box, one of Bright Fund’s early customers, has seen this impact on recruiting firsthand (disclosure: Box is one of my former employers). Like most tech companies competing for talent in the Valley, Box used to give out lucrative bonuses for candidate referrals. They recently switched to giving out $500 in Bright Funds gift credit. Instead of seeing employee referrals dip, Box saw referrals “skyrocket,” according to Box.org Executive Director Bryan Breckenridge. This program has now become “one of the most cherished cultural traditions at Box,” he said.

Additionally, like any corporate benefit, there should be metrics tied to employee retention. Benevity released a study of 2 million employees across 118 companies on their platform that showed a 57% reduction in turnover for employees engaged in corporate giving or volunteering efforts. VMware, one of Bright Fund’s customers, has seen an astonishing 82% of their 22,000 employees participate in their Citizen Philanthropy program of giving and volunteering, according to VMware Foundation Director Jessa Chin. Their full-time voluntary turnover rate (8%) is well below the software industry average of 13.2%.

Towards a Brighter Future

Bright Funds still has a lot of work to do. CEO Walrod says that one of his top priorities is to expand the platform beyond US charities, finding ways to evaluate and incorporate international nonprofits.

They have also not given up their dream of becoming a truly consumer platform, perhaps one day competing in the world of donor-advised funds, which today is largely dominated by big names like Fidelity and Schwab who house over $85B of assets. In the short term, Walrod wants to make every Bright Funds account similar to a 401K account. It goes wherever you work, and is a lasting record of the causes you care about, and the time and resources you’ve invested in them.

Whether the impetus is altruism around giving or something more utilitarian like retention, companies are increasingly realizing that their employees represent a charitable force that can be harnessed for the greater good. Bright Funds has more work to do like any startup, but it is empowering the next set of donors who can give with the same effectiveness as Gates, and one day, at the same scale as him as well.

Jul
02
2018
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Dell will soon be a public company (again)

Dell, which went private in one of the the largest leveraged buyouts in tech circa 2013, announced today that it will once again be going public through a relatively complex mechanism that will once again bring the company back onto the public markets with founder Michael Dell and Silver Lake Partners largely in control.

Dell’s leveraged buyout largely marked the final page in the company’s storied history as a PC provider, going back to the old “dude, you’re getting a Dell” commercials. The company rode that wave to dominance, but as computing shifted to laptops, mobile phones, and complex operations were offloaded into cloud services like Amazon Web Services, Azure and Google Cloud, Dell found itself navigating a complex environment while having to make a significant business transition beyond the PC era. That meant Dell would be beholden to the whims of public markets, perhaps laden with short-term pessimism over the company’s urgent need to find a transition.

The transaction is actually an offer to buy shares that track the company’s involvement in VMWare, converting that tracking stock into Dell Technologies stock that would mark its return as a publicly-traded company. Those shares will end up traded on the NYSE, around five years later after its founder took the company private with Silver Lake Partners in a deal worth roughly $25 billion. Silver Lake Partners owns around 24% of the company, while Dell owns 72% and will continue to serve as the chairman and CEO of the company. This move helps the company bypass the IPO process, which would remove the whole time period of potential investors scrutinizing the company (which has taken on a substantial debt load).

Dell said in its most recent quarter it recorded revenue of $21.4 billion, up 19% year-over-year, and over the past 12 months the company generated $82.4 billion of revenue with a net loss of $2.3 billion. The company said it has also paid down $13 billion of gross debt since its combination with EMC back in 2016. All this has been part of the company’s transition to find new businesses beyond just selling computers, though there’s clearly still demand for those computers in offices around the world. As it has expanded into a broader provider of IT services, it’s potentially positioned itself as a modern enterprise tools provider, which would allow it to more securely navigate public markets while offering investors a way to correctly calibrate its value.

Feb
02
2018
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Dell confirms it’s considering combining with VMware and other options in SEC filing

 This morning, Dell confirmed previously published reports in an SEC filing, that it is considering various options to possibly reorganize itself. Reports emerged last week suggesting the Dell board was planning a meeting to discuss options for dealing with the enormous debt it took on when it acquired EMC in 2015 for $67 billion. The SEC filing confirmed earlier reports that it was… Read More

Jan
29
2018
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Why the Dell rumors might have substance

 By now you’ve probably heard that the Dell board is supposed to be convening later this month to figure out how it might reorganize itself to deal with the mountain of debt it took on when it bought EMC in 2015 for $67 billion. The rumors began on Friday and involved a couple of possible scenarios including Dell going public or Dell buying the remainder of VMware (which I’m not… Read More

Nov
28
2017
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VMware expands AWS partnership with new migration and disaster recovery tools

 Remember how VMware was supposed to be disrupted by AWS? Somewhere along the way it made a smart move. Instead of fighting the popular cloud platform, it decided to make it easier for IT to use its products on AWS. Today, at the opening of the AWS re:invent customer conference, it announced plans to expand that partnership with some new migration and disaster recovery services. As Mark… Read More

Nov
02
2017
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VMware acquires VeloCloud as it moves deeper into networking

 VMware announced today that it was acquiring VeloCloud, a startup that focuses on cloud-based wide area networks (WAN), those networks that span a broad area across data centers or regions. The companies did not reveal the purchase price.
The news confirms a report that The Information first reported  yesterday.
The company appears to be an excellent fit as one of the primary use cases is… Read More

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