 Nope. Hi. Hello, everyone. I'm Heidi Bretz. I run business development for the OpenStack Foundation. And thank you for coming and joining Adrian and I by the fire, Adrian and me, for our fireside chat. So if you're in this room, you probably have heard about Morantis. You probably know what they do. And if you know Morantis, you probably know that they just raised a record-breaking $100 million B round of financing. And it's record-breaking because it's the largest ever in open source history. And it's one of the largest in technology history for a Series B across all of technology. So definitely rock stars. And if Morantis or the rock stars right now of OpenStack, I am joined today by Adrian Eonell, who is the Mick Jagger of OpenStack. So Mick, Adrian, have a seat. Hey, thanks, Heidi. If it gets too hot. There's quite a set up there. I feel like I'm with Rockstar here. So why don't we start by just having you introduce yourself and talk a little bit about your journey in the beginning of Morantis and how you guys got started and how that kind of evolved over time. Sure. So I joined Morantis five years ago. I'm an engineer by education. And I spent most of my early years building software and later parallel processing systems in various places around the world. When I joined the company, we had a phenomenal team of engineers, but it wasn't quite clear where we would have an opportunity to build a really large and exciting business. But fairly early on, we figured out that OpenStack is something that it's extremely promising. They can really change the world. So we decided all together as a team to make a big bet in OpenStack back in 2010. Got it. And you started as a services company, right? So can you tell us a little bit about how you changed kind of your direction at Morantis and how that may have affected your financing or how maybe the reverse was true? Maybe you're financing and the opportunity to finance yourself affected your direction. Right. So many people think that Morantis started in the OpenStack Business Services Company, but we actually used that only as a strategy. From the very beginning, when we started out on our OpenStack journey in 2010, we felt that companies will ultimately buy software and a complete solution for OpenStack. But we looked at other companies that had entered open source spaces early on and we figured out that the way to monetize early on and the way to gain customer traction and to really understand what the customer's pain points are is by offering services around the upstream code base. So we decided to start with that, to win very large customers, build a successful business, build a successful team, and then at the appropriate time introduce our software offering, which we did more than a year ago. However, we built the R&D team at Morantis more than two and a half years ago. So you really listened to what your customers wanted and then developed your product around that rather than doing the reverse, developing a product and then changing it? It's actually a combination of two things. I mean, we don't believe on just following what our customers say one by one, we listen extremely carefully to our customers and we want to live in our customers' heads. At the same time, we have our own vision, right? We have our own belief as to where OpenStack should go, how it can create value, what the biggest pain points are, and then we want to marry the two into a vision and into a roadmap that we believe in. So that's been really our plan all along. And then when it came time to raise capital, I mean, there's a lot of activity out there around OpenStack and a lot of young companies. How did you differentiate yourself from the others or what made you stand out, what made you special in that you were able to attract the attention of a lot of investors? Right, so we raised the first round of capital, $20 million, quite a while ago, maybe 18 months ago. We attracted some very high quality investors at the time who helped us build the company through the first phase. What I think made us compelling for the Series B is first and foremost, our team. We have a phenomenal team, very good colleagues on my management team, extremely deep engineering talent, very good sales force. So the entire Mirantis team is strong and cohesive and certainly the biggest asset that we have. The other huge differentiator that made us stand out is the customer traction. We have very real revenues. We have an enormous amount of growth that we've delivered consistently throughout the past four or five years since we started the OpenStack journey. And then finally, the clincher was a very, very compelling product story with a great vision behind it. So you marry all these three things together and this is typically what investors are looking for. Do you have a high quality team? Do you have strong traction? So it's not all just paperware. And then do you have also compelling vision beyond that, how to turn this into a really exciting and large company? And we were able to pull all of those three things together, which I believe led to a successful outcome. So let's go back kind of before the series B to your first round of funding, which was much smaller. You took all corporate investment at that point, right? There was no... It's not exactly accurate. We have some corporate investors like Red Hat and Dell. But we also have some VCs that are really not strictly traditional corporate investors. So Intel Capital invests very much like a professional VC. Sapphire Ventures, that was just up here on the panel, is definitely a professional VC. West Salmit Capital, who's also earlier here on the panel, a professional VC. So we had a mix between corporate investors and professional venture capitalists in the first round. How did you choose that mix? And was that, if you were to do it over again, would you make the same decision? I believe so. For every single investor that we brought on at the time, we had an extremely compelling reason at the time. Intel was our lead investor early on. We took them on because they have a deep pedigree in open source in a data center. They've done a spectacular job helping build some terrific companies in that space, including Red Hat early on and quite a few others. West Salmit Capital, we took on because of the China story. You've heard David before, China, open source, open stack, huge market opportunity. We want to play there. We just opened an office in Beijing and a few months ago. We have quite a few great customers in China. So that was important to us. Ericsson, we took on as an investor because we absolutely felt that all the service providers in the world eventually are going to move to a scale out cloud infrastructure. And we believe that the only choice that makes sense for them is open stack and we want to play there. We want to be the dominant vendor to the service provider space. This is why we took Ericsson on. Red Hat, we took on also early on as an investor because we felt there are quite a few things that we can learn from them. They are very successful open source company. They pioneered a very successful business model in this space and we also felt at a time that maybe we can find some alignment between our technology and our business model and there. So for every single investor, we had a very good reason why we took them on. Would you recommend this to the startups in the room? Are there any startups in the room? Anyone starting a company? Okay. Is that a path you'd recommend? I would. The first recommendation I would have is to look at the people, right? So it's not just the name or the VC that you bring on but who are actually the people that you are going to work with because you're gonna work with them for a very long period of time and it's almost impossible to get a divorce between the company and your private equity or VC investor. So you're gonna be there to get it for a long time. So look at the person first and foremost and see if there is a good cultural match and then also look at who the company is with the investor is and see if there is a good fit. Okay. So you say you're married to your investor and so I look at Red Hat as an investor in Morantis and you very quickly turned around and went into head-to-head competition with them. So how is that marriage doing? How did you manage that? Are you guys in counseling? That was a more turbulent relationship I would say. First of all, I wanna say that we have tremendous respect for Red Hat. There is an enormous amount that we can learn from them. We strive to learn from them all the time. We went into the relationship full of enthusiasm and we very much hope that we can find a business model that works for Red Hat and works for us. As it turned out, that was not possible to make that happen. So we decided to go in our independent way and really stick to our guns and pursue our vision even if that leads to direct competition with them. And in the end, probably when they make a lot of money, the marriage will be fixed again. Or at least it'll be over, but someone will get a big settlement. Well, I will tell you this, is that Red Hat did contact us a while ago and they did indicate that they're at least a happy shareholder in Morantis so far so good. Great, great. So I have a question. A couple of years ago, I started with the OpenStack Foundation almost two years ago and it's the first I'd ever heard of Morantis and probably nobody else had either. And now I look at Forbes. I look at the Wall Street Journal. I look at major publications and when OpenStack is mentioned, I see HP, I see IBM, I see these giant companies that have been around for a long time, and Morantis. You're just kind of sticking out there as kind of, well, how did they get in there? How did you go from nobody's heard of you to Forbes in three years? Yeah. Well, building a brand is a hugely important part of a strategy for success for a young company. And here's my view on how to build a brand. So first and foremost, you have to build a brand around the substance that's true and real, right? And the most important part of that substance for us at Morantis is what we do for our customers. We're very fanatical about helping our customers succeed. We have very deep engineering talent and we have extremely good technology. So there is a lot of substance in what we do. And so we built a brand first and foremost around the value that we create for our customers. And we aimed to win very big customers and make them successful and make them huge fans of Morantis. And the second part in my view of building a brand is having some kind of a unique angle that resonates with your target audience. And our unique angle in this particular play is this very fundamental idea of being a pure play open stack company and taking a radically different approach than most of the other vendors in this community. And the difference there is that we do not seek to lock customers in, but we are completely open, hence pure play open stack. And that resonates extremely well with the fundamental mission of open stack itself. And finally, the third ingredient of building a brand is to be reasonably outspoken, to stand for what you believe in and not to be a boring company. So we strive to do all of those three things together, start with the value that we create for our customers with a foundation, have a very unique angle and a vision that we can build fans around and then be reasonably outspoken. And I think this is kind of what built the brand for us. Thanks. So I'm sure as a startup, like every startup you learn from your mistakes, you make mistakes, you learn, you move on. Could you possibly spare any of the entrepreneurs in this audience the mistakes that they might make by sharing with us some of the mistakes Marantis made or some of the things you might do differently the second time around. So maybe they can kind of leapfrog and avoid those. Yeah. Well, there's almost an endless, I would say room for opportunities to make mistakes when you build a company and when there is so much at stake. I would say I'm trying to figure out what are the biggest ones that we made or we almost made. So I think one of the most important things as a company is to stay focused and to be very, very clear as to what you go after and what you don't go after as a company. And it's always incredibly tempting to always say yes to the next customer and slightly diverge from your core path chasing revenue. And I think that we've made some of those mistakes occasionally in the past and fortunately we reasonably quickly corrected them. So one piece of recommendation that I have is just to be very, very disciplined in terms of what your core value is, your core proposition to your customers and stick to that quite religiously because if you're gonna lose your focus, I think your company is not gonna succeed. The second area where it's very easy to make mistakes is in hiring and especially hiring people and your key management team. And I encourage everybody here to spend as much time as possible with your prospective key hires and make sure that there is a very, very strong cultural fit between the people you bring on board and the people that are already in the company. And we made here and there the occasional mistake. I think these are probably the two most important things to avoid if you can. So Mark mentioned in the earlier panel and they talked about some of the recent acquisitions among open-stack companies, big acquisitions for such an early young technology. So you certainly probably had the opportunity to sell Mirantis several times over to some of the same companies that have bought the Meta Clouds and the Ink Tanks. But you're not. You decided to go for this big round of venture capital. So why did you make that decision? I think it's gonna be better for us. I think it will be more fun, more exciting. And I think there is a tremendous room for a young company in the open-stack ecosystem. I think it's gonna be difficult for open-stack to succeed without companies like us. If the community is gonna be putting all its fate for an ultimately successful outcome for open-stack in the hands of established companies, I think that's very risky because they do not necessarily move fast enough. They have many, many other business priorities besides open-stack. And therefore, I think we play an incredibly important role in the open-stack ecosystem, probably as one of the very few, if not the only company of scale who can actually compete legitimately for the business of somebody like Wells Fargo, Ericsson, or AT&T, or Orange, and when versus very large established players. Do you, just in knowing kind of the ecosystem and the folks involved here in open-stack, do you see companies out there are a space where you think someone has an opportunity to be the next $100 million series B fundraiser? I think one of the most exciting areas within open-stack is networking. And that's one of the areas with big unsolved problems. So I would be looking for that space. If somebody comes up with compelling solutions that are completely open source and fit well into what open-stack is trying to accomplish, I think that's an exciting area to look for. So now you're a morantist and you're in this crowd with HP and IBM and Cisco and others and you say you can compete for large customers. It's getting, I mean, they're getting pretty good at what they do too. And you're all kind of converging and doing the same things. How are you, what are you thinking about going forward and how you're gonna compete with some of these big guys? I mean, you've got your money, you've got somewhat of a brand. What's your strategy for kind of the next year or two to compete with these giant companies? Right. So we can't reveal everything that we have coming down the pipe in terms of what our playbook is going to be, but there are a few data points that I'm happy to share with you. So first and foremost, we believe we will continuously outpace our competitors. We are faster moving than HP and most of these large guys, you'll see us come up with new features, new capabilities faster than other people. We also have a much more integrated story than virtually all of our competitors. We have the Soft Emeritus OpenStack, we have professional services, we have training, we provide a complete solution in ways that most of our competitors at least at this point can't. And finally, the third leg of our stool is we're very open as a company. We have a lot of partners around us and many of these partners will find it difficult to partner successfully with those vendors that pursue a complete integrated stack strategy. So to just give you an example, if somebody wants to sell a top-to-bottom solution that includes hardware and networking storage and the like, they're not gonna be very likely to partner with somebody that has all these other elements as part of the solution they're selling, right? So it comes back to the fundamental value proposition to be pure play open stack. So we aim to have as many partners as possible build a successful business around Mirantis rather than trying to capture the entire revenue opportunity from a customer by ourselves. So that's a big part of our playbook. And probably one of the reasons, well, among many, but one of the reasons that you were able to attract capital and really impressive investors is because you had a nice kind of portfolio of marquee customers. So in the early days, just for the benefit of the startups, when you were a Mirantis and nobody knew who you were, how did you get those first big customers? We got them because coming back to the kind of the fundamentals is because the core of who we are is very high quality, very deep engineering talent. We know what we were talking about when we're getting from the world customers and they appreciate that. So we went for customers who appreciated that, who are more leading edge, who are looking less for marquee brand, but they're looking very much for the substance of what it is that we can do. So it's not by accident that some of our early wins were companies with a very deep level of engineering expertise themselves. People like, for example, PayPal or Webex or even NASA was a very early on Mirantis OpenStack customer. So they looked beyond the brand, they looked at the people, they looked at what we had to offer and decided based on that, right? And once we built this first initial pool of 10 to 20 very high quality customers that helped us with winning the other 120 customers. Okay, so you have an IPO in your future or it's rumored. And that's the goal, yeah. Okay, and I assume your 100 million was raised on evaluation of, I don't know, 800 a million? Are you allowed to talk about that? I am, but I don't. Okay. Just guessing, I want to know. No, we're not disclosing all evaluation. Okay, so if you were to guess, when do you think that event might happen? Just... We're aiming for 2016. Okay, okay, so you're gearing up for that. So to the startups in the audience, this could be your future, this is possible. And that's one of the reasons I really wanted to have this talk with Adrian. And I've asked him the questions I wanted to answer, but I'm sure that in the audience there are questions that you would like to ask him that are really particular to your business or to your fundraising efforts. So does anyone have questions? Yeah, go ahead. Hey Adrian, I'm Ryan from Storm, nice to see you. I'm actually not, I don't have a startup. I'm a venture investor, but since I passed on Morantis in the A round and the B round, I made it fully. I think one of the pieces of advice you can give to the entrepreneurs, maybe just talk a little bit about getting turned down and getting those and kind of how to help think about that because now you probably had way more money than you wanted to raise for this last round. But in the early days, it was tough. So maybe you can talk a little bit about that. I don't know that it was particularly tough in the early days and I recall the conversation we had with Storm Ventures. It was really like a 30 minutes, one hour introductory meeting and to me that's kind of like a mutual evaluation. We're trying to figure out very, very quickly is there a very good fit between how you guys see the world and who you are and between how we see the world and who we are. And if there isn't a very good chemistry, then we move on. So I don't see it as a rejection. I see it much more like is there a good match between who the investor is and who we are and then go from there. And I think it's very, very important to have an incredibly thick skin when you go through the fundraising process. We met a pretty high number of investors over the past six months to get this round done. And the feedback ranged from, this is a huge range. I mean, there were some investors who said, well, boring story, open source never succeeds. You know, red has the only company that's ever made it to investors that were just keep bidding up the price. So why diversity of opinions out there in the investment community as to what constitutes a great investment? So don't let rejection or lack of a match discourage you in any way. And how much was being involved kind of based on open source a challenge for you? Because I mean, there's definitely been a couple of very vocal VCs in the Valley about expressing their opinions about really open source companies not being a good investment. Was that something that you had to deal with often that you heard often from I know Andres and Horowitz is not a believer. A couple of other VCs that are kind of, they're vocal about it and blogging about it. Yeah, so it was a fact that I don't know there was a decisive factor. I also don't, I also believe that venture capitalists do have a bit of a herd instinct sometimes. So they tend to be trendy and go with fashion, the fashion of the moment. But if you're looking at a very, very best investments in history, I think the vast majority of them were extremely controversial at the time where people said, oh no, I don't think this is going to work. So I think I would even say that if everybody lines up and says, this is an awesome investment, that's probably a huge red flag. I think you wanna be much more on the edge where very few people believe that this is a sane investment. And then you're kind of the crazy outlier. I think that's much, much better place to be. Interesting. Anybody else? Sorry, Ryan, you weren't a good fit. You weren't a match. Hi, Clark. Thanks very much for the insight. I agree with a lot of what you're saying. I've raised some capital for startups previously and the speed dating process, it's like a sales funnel, but with a much wider entrance and a much smaller exit. One of the interesting things that you said and there's a lot of conflicts between your investors and what you do, which is interesting and it's interesting to hear those stories, but what's even more interesting to me is what value did you get back from some of those investors? Because they always, investors are like a marriage and it takes a long time to cultivate that marriage and then they always say, oh, we have this great network that we're gonna create all these wonderful introductions and you're gonna be hugely, fabulously successful with us, but then when the check hits the bank, it's usually like, hey, email, dot, dot, dot, you guys should meet and then that's pretty much it until you do a down round and then they're all over you. So if you could comment a little bit on some of the more successful relationships that have come from some of those investors and why you think that was. Yeah, we actually got it, not that I think about it, we got a tremendous amount of value from all of our investors, including Red Hat and I'll get to that in a moment. So to just give you some very concrete examples, Intel Capital, our lead investor for series A, Darmesh Tucker, who I believe is unfortunately not in Paris today because he has to be at the Intel Capital Global Summit in California this week, definitely has done an incredible amount of work for us in terms of introductions to customers, in terms of Intel becoming our own customer, hugely, hugely valuable. So they are direct kind of dollar signs, revenue and opportunities attached to all the work that he has done for us. To give an example, even the relationship with IBM that we have in place today was initiated at a very senior executive level through Intel executives, very valuable. Let me give another example, Ericsson who also invested in series A and now also in series B signed a $30 million software agreement with us in the first quarter of 2014. Hugely valuable investors to us and in fact our revenue with them has grown 50% larger even since beyond what we had planned for this year. So that's definitely a very valuable investor. Dell has been a Mirantis customer now for three years. We've probably done 15 to 20 other customers together where Dell and us have gone to market together in opportunities, so that's hugely valuable. Red Hat was a Mirantis customer last year where for open stack training for part of our technology and software. So they created revenue for us, we're grateful for it. What else can I pick? West Summit, you just heard the China story, they help us hire the general manager for China that we brought on board two months ago. We've helped win some Chinese customers following direct introductions from them. What else? I mean, these are just a few examples. So in my view, it's also very much what do you do as an entrepreneur to use the relationship? Are you going to be completely passive and expect that everything is being handed to you or are you going to make the most out of every single introduction that you receive? And in my experience, the people are going to make introductions, they are going to support you and then they're going to watch what you do. How hard do you work in order to make something out of that initial contact? So I'd say all of our investors, including those that may be controversial today, have actually made a substantial difference to get us to where we are today. Actually, that makes a real case for corporate venturing and taking money from companies because each one of those cases where you actually benefited, the money came from the technology, partner, customer, something. Yeah, absolutely. Anybody else have a question? I knew it. We have time. Hello. Mika is my name from East Altis. Thanks for sharing your perspective. You had mentioned that one of the mistakes that startups need to avoid is hiring. And I would like if you could comment more on what you could call some of the steps we need to focus new startups in making sure that they hire the right caliber of staff they need. Yeah, I mean, there's been a lot written about this by people that are a lot smarter at this than I am. But I will say this, I think get to know the people that you're gonna hire in senior roles as well as you possibly can. Make sure that you don't have just a very good fit in terms of scale, but in very good personal chemistry with the rest of your team and yourself. Try to understand as much as possible as to what motivates those folks and how that is aligned with the company's purpose, right? Anybody else? Hey, I think we are out of time anyway. And I have asked all my questions. Any last words for these guys? Well, I wanna thank the OpenStack community for creating this opportunity for us. We wouldn't be here without having this gigantic community around us to help us build this business. And of course, the OpenStack Foundation that's made it all possible in the first place. We're thrilled to be here. Thank you. Well, good luck to you going forward. We expect to hear more great things from Morantis and who knows what we'll be on stage talking about next year with Adrienne. So yeah, tune in, stay tuned. Thanks for coming.