 Welcome everybody. I'm Mark Hullier with the OpenStack Foundation and happy to be able to moderate this panel with a bunch of venture capitalists who have been putting millions of dollars in OpenStack companies but before I grill them on that let's do some quick introductions. So Simon do you want to start off? Sure well I'm not a traditional VC I was a VC way back but I run Dreamhost but we have a holding company venture firm that we invest in companies and sort of back things that are close to our own heart so we put $5 million into ink tank to start it back in early 2012. That's a good call. Good call. Good call. And sold to Red Hat in April and we just kicked off another company yesterday, Acanda, in the network virtualization space and are putting $1.5 million to work there. I'm also on the OpenStack Foundation Board of Directors. I'm David Lamb. I'm with West Summit. We're a US growth capital investor. We're the first institutional investor in Mirantis. Over the summer we also invested in couch base on the database side. Just a week ago one of our company's Maginatics was acquired by EMC and we have another company called Nexenta in the storage space which has some announcements this week as well. Hi there I'm Jay Doss. I'm one of the MDs with Sapphire Ventures. We raise most of our money from SAP, the big giant software company. Big investor in open source Mirantis is one of our investments but we were investors in Red Hat, we were investors in MySQL, you know companies like Kaltura and Mulesoft and Jaspersoft, a bunch of companies in that space. I'm Ryan Floyd, Managing Director at Swarm Ventures. I started the firm about 15 years ago. We just do infrastructure software investing, been involved with OpenStack, I don't know, two to three years now. I wrote the first check for MetaCloud. Some people may have heard of that company and an investor in Swiftstack and I'm about to write another check in a coming as yet to be announced so pretty pretty active in the community. And MetaCloud recently acquired by Cisco so congrats on that. So one of the reasons I love to moderate panels is just to surprise the guests they all were expecting to be prepared for these questions but I thought well that's not gonna be any fun. So the first thing I'm gonna do is just tell you guys a little secret which is OpenStack is actually free. So how the heck are y'all gonna make money on this? Investing in companies built on software that's free. Anybody? OpenStack is also pretty damn complex, right? So I think that's part of the answer. In the case of MetaCloud that's exactly what they did. I mean it was the hard part for a lot of their customers was deploying and so they set it up as a service and that was the model that worked and they were able to gain a lot of customers that way but it certainly wasn't selling software. Look open source software has been around for a long time now, right? Red Hat already showed the way of being a public company so there's various business models out there. You can have a common core kind of business model where you have an open source core and then you have additional stuff that's built around it or you can go kind of like the J Boss or you know model where you basically have support and training around it and provide services around it. So yeah lots and lots of people have made money and you know if you look at the Hadoop guys like four of them like making tons and tons of money right and and then of course Mongo and all the way. So you know there's lots of models where open source companies have made money and you know and investors have done really well so there's no reason why OpenStack companies can't do that. I just also add that I think one of the areas that we invest in is is in China and we try to connect a lot of a lot of our US companies with the China market. We see in China as I would imagine another in other regions of the world a huge demand for open source software as an alternative to some of the incumbent vendors. So I think that going forward especially with the quantization of hardware and a lot of the great developments in the industry over the last few years I think open source has a very very bright future not only OpenStack but also a lot of the other ones that we've talked about today. So is anybody here in the audience working on a startup looking to raise money show hands? Okay and probably the others just don't want to raise their hand next to their boss. So what would you want to hear from some of these folks that might peak your interest if they're obviously related to OpenStack in some way but you know what are some of the things that you look for right off the bat in that first meeting that hallway meeting you know what do they say to you that makes you think I'm gonna set a meeting on my calendar because you guys calendars must be ridiculously booked and a lot of contention. So what are what is that first intro that gets your attention? First thing is you know how many people have downloaded and using it right that's kind of the number one thing because you know that's the basis of where all these software companies are you know anything in open source kind of goes about right so you know how many downloads who's using it you know what kind of you know the people you know are there how many committers are there in the in the in the source code like is there you know just two committers or you know is there like you know a bunch of people what are they doing so all of that stuff you know partners building things around it you know so it doesn't have to be that they're monetizing on the revenue side but it's just the size of kind of you know usage is very important. And I think you know we're all aware that the cost to get something out the door minimum viable product wherever you want to call it you know it's plummeted to to almost nothing with cloud being one of the main drivers of that. So building a product you really have no excuse you don't need a ton of money right so getting some traction showing some numbers if you if you can't get to that point that you're probably not gonna get past you in the hallway except for you know at a high rate of speed so. There are business models where people will get proprietary things done and then open source it to build a community around it I think you know like look at Docker that's a very good example right where they were close kind of thing and then they opened it up and they have got lots of traction but that's not always that's as successful. Okay I would say as well that you know back to the original point sort of related which is I think major corporations have now fully realized that open source is just another way of you know utilizing software that otherwise would be proprietary and so I think this whole distinction between you know paying a license fee for proprietary software versus paying something else for delivering the equivalent value but you're not buying software from a single company with their limited set of developers you're actually you know utilizing software from a large number of developers open stack in the last release had 1400 developers contributing to that release so I think I think it's a bit of a mind shift when now there's this realization that you can get quality software you know beyond Linux beyond some of the early open source projects and so having people who understand open source they you know in the company who really understand how to motivate the community how to you know get involved in the whole ecosystem and are very comfortable in that sort of co-operative type environment that's that's really one of the crucial aspects as well because proprietary tends to be very defensive protective and so on whereas you know open source engineers executives and so on understand that this is a very tightly knit co-operative type environment and they've got to be able to operate in that environment so that's a key criteria so so Ryan and Simon you guess both have invested in storage specific with Swift stack and ink tanks is there anything unique about storage that people need to think about when they're building a business or looking to raise raise funding or is it just another technology company you just looking for traction yeah actually I think it's a great example so storage while there's there's a lot of an open source projects I think if you if one doesn't have storage chops if they can't go in front of a storage administrator and really talk about sort of what's required in a storage world and go toe-to-toe with someone that knows EMC really well for example that's gonna be a challenge because people that are buying can storage and consuming storage they're not so concerned about is it a great open source projects or not they're worried about losing data and so that that's a great example where you got to have like a multi-faceted in terms of what your skill set is so there's a lot of diligence around the technical chops and for us with ink tank sage while the co-founder of dream host had created sef back you see Santa Cruz sort of back in 06 0506 and so it was a project that had been going for a while when we decided to look at you know really getting behind it commercially separately it had been red warning signs do not use this in production you know that kind of thing but I think for us definitely having something like storage shops but for us it was like look storage is a massive market you know $60 billion market and we really felt that a lot of storage companies were just caught napping where they didn't realize that every other part of the data center you know was going virtualized was going software-defined and so we just felt that look we don't know if this is going to work but we feel like you know there are a lot of market forces that are moving in that direction so that's another factor as well as you know just making sure that what you're doing particularly in open source is not too niche you know because if it's if it's narrow you just increase your risk that you know someone else is going to come in from the side and build out your you know your special capabilities as well I just had one more thought in terms of the storage market as Simon said it's a huge market I think that having worked in that industry and also made a few investments in the space there they're they're going to be certain niches that that that you need to get started with but I think that what's really important is to have a broad enough offering so that you can you know you think of the $60 billion market it's it's probably more like a hundred eight hundred million dollar markets and so the goal is to try to pick a handful of those that work well for you where the the tier of storage you're coming in on is on the lower tier ideally so you can go into production without taking down the entire organization if something falls over and and and just making sure that you are articulating and the the right strategy also in in terms of partnering with with other companies in the ecosystem you know one of the great developments of the last ten years since the date so the decline of the data center in the rise of of virtualized environments is the idea of building a software-based storage company that just really didn't exist ten years ago and you have that opportunity now with it comes some challenges because you have to work with some other some other parties and it is an ecosystem play so you're really trying to balance the the limitations of of a software only solution and the ecosystem requirements and dependencies on it in addition to the the target markets that you're going after I think those are all key considerations when we look at companies in the space so it sounds like a lot of it comes down to as Simon said some people were caught napping there's some fat cat companies out there that maybe have some very big margins and they're kind of coasting on that and maybe with with some lock-in that that's that's served them well so is that the other end of the equation in terms of how you analyze the market itself and see well these are a handful of companies that are making you know pretty massive margins that haven't really embraced some of the software to find future is that is that part of how you look look at opportunities as well look I when you look at a company you don't look at it just if they're open source or not right that we have investments in storage company that are proprietary companies right so you got a kind of I think you have to look at the business model about you know how much money is it going to take for them to get to market you know get to the customers and things like that so there are there are proprietary software companies you know both in the infrastructure as well as kind of application space that do very well being proprietary software companies right so so I you know there is no kind of a single answer about okay it has to be open source to get to market it all depends on you know can you use a community to drive to customers and get to some kind of revenue versus hey I have to do all this marketing and sales on my own and get you know break down the doors and compete against all these heavy weights and you know how much capital is that going to take right it sounds like it's just as much about the community of users and that kind of viral spread of the technology if you will for lack of a better phrase then then whether you know the licensing model the software it's it's more about changing the way you know enterprise sales is done exactly exactly exactly exactly yeah I was gonna say just to tack on that I mean I think there are definitely some buyers that don't want any vendor lock in and love open source because of that but I think the real value of open source is that community and being able and you know it's extensible and you know multiple parties can sort of like you know plug into it and and what customers really want where these enterprise really want especially they're buying something like storage is they want a solution they don't want to bag of parts they don't have to stitch a bunch of stuff together they you know they don't want all that work they've got 50 problems that they got to deal with or a hundred and they don't want another one so it's important to like deliver something it's actually a solution they care about and that's why these if you ever wonder why why are all these proprietary software companies so successful well the answer is because they deliver these companies a solution and then they make it really easy so there's one piece of advice anybody focusing on an open stack I think this next phase we're embarking on is making it easy to consume in a whole bunch of different dimensions and that may be building software on top of some of the open source code that makes it easier or maybe a delivery method that's going to be the key because we can make it easier to consume that's how you're going to beat emc or vmware aws in these enterprise accounts because you know someone's running ops I mean they care about open source but but not really what they care about is getting their job done they care about getting their their their application deployed and that's really what's critical see you're saying they got 99 problems but a bag of parts ain't one I'll take the I'll take the head on that there is there is one thing that what we have found with enterprise buyers as soon as you say you're an open source company they basically say that your price has to be free or 10th of what they pay for it for enterprise you know positioning makes a big difference yeah so so that's the double-edged sword that you have a community that is driving you and adopting you but then you know maybe the developer of the devop teams kind of has done that and now I want to cut a big deal with the CIO or even the VP or somewhere there and they're like oh it's open so they should be free or it should be a 10th of what I'm paying to you know VMware emcee or Oracle or SAP right so that is that is a double-edged sword you always get these are enormous database companies in terms of you know in terms of actual usage right they should be you know Oracle size I mean I mean that these companies should have massive revenues but just to make you know Jay's point they're not that's because they can't command the same pricing I think one of the big things though and you just only have to look at it here is that it's like we're in 1999 in the world of Linux right right now today with OpenStack that that you know having been a part of the OpenStack movement for you know since about six months after it really got formally started this is a juggernaut that is going to change IT in dramatic ways and I think the thing that's a little bit different about what happened with Linux is that you know even though of course you had different Linux distributions and so on and different beneficiaries of Linux it was the big companies that really benefited probably the most in terms of adoption and usage of Linux whereas I think I hope and I think that OpenStack is different in that OpenStack distributed systems is frankly a lot more complex from a software perspective than any of them you know than an operating system don't tell you know don't tell Linus that I said that but but it is distributed systems is very complex you're managing it's a data center operating system a lot of not a server operating system and so I think that there is the key thing is is my belief is there are massive opportunities because there's this huge wage of wave of transformation and change coming just in the last few years looking at the OpenStack summit and the companies that are participating in OpenStack and betting on OpenStack the momentum is there so so I think it's going to be interesting and different as Ryan said there's plenty of opportunity to have companies that serve a particular need it doesn't necessarily have to be you know as that open source software player in the stack you know we've just launched a Kanda which is in the networking network virtualization but but services around OpenStack I mean there's there's a huge amount of opportunity for for these kind of ventures I will say the big juggernaut is AWS it's not really open stack is really playing catch up it has been a basically a reaction against AWS if you look at you know talk to a lot of CIOs many of our CIOs in the audience here you know they're worried that they're geologically gone because you know all the developer they're going to AWS to put everything up you know all their development is out there either in AWS and now increasing on Google Cloud so so really the the you know OpenStack is playing kind of catch up and allowing CIOs to do the private you know deploy private clouds in just an easier easy way as as you know AWS does for developers so I think the challenge and where you can build big companies if you look at why people go to AWS is because they have all the services that you need to write a program you want a CDN it's out there you want an email delivery it's out there you want a Hadoop cluster it's out there you want a database inline memory database it's out there right in AWS so I think OpenStack doesn't have that you kind of get the you know we have heard this complain that oh I've got OpenStack set up now what do I do I know I still have to get somebody to put Hadoop on top of it I still have somebody to get you know kind of some kind of we did add Hadoop and Juno just saying yeah I know but it's a totally fair point it's getting there right but the thing is that AWS we are playing catch up OpenStack is playing catch up AWS has all of these services out there and I think that is where all the you know opportunities are for building companies along with orchestration and all these services on top of it I think AWS is like Microsoft in the early days they had the lead but they didn't have the ecosystem right I mean they had a certain ecosystem so I think AWS absolutely AWS is not going to be the winner here OpenStack is going to be the winner AWS is the catalyst but I mean you look at the array of companies that are now arrayed against AWS I mean in terms of market cap in terms of resources and so on I think you know I think it's going to be just just on that on the AWS thing you know I've been following this for you know very long times a venture investor and it what built my initial conviction a couple years ago around OpenStack wasn't that it was open source you know shock right it wasn't because it was a community shock I mean because my OPs don't care about that but they care about us making money they care about building businesses and what gave me conviction actually was that when you looked at all these companies that were in AWS and the money that they were spending at some very you know reasonable number a couple hundred thousand dollars a month it starts to make sense to pull that in in-house if you can make it easy to consume and so I think AWS had this had this massive early start but if you look at big SaaS companies none of them run in AWS and they won't because it doesn't make any sense for me to economic standpoint so I think as OpenStack gets better and better and easier and easier to consume it's inevitable you're gonna see this arc you know towards towards private clouds it doesn't mean that AWS goes away because it's test and dev it's awesome right it's great right so it'll have you know and if you're for lots of our little startups are just getting started that don't want to set up an Equinox and you know a roll of roll out an OpenStack service it's great because it's easy swipe their credit card they're off they're off to go but then as they get big and they start spending a couple hundred thousand dollars a month then the question emerges what do we do right and there's there's you know some people point to companies like Pinterest or Dropbox these companies that are still in AWS but they're the exceptions the only reason they're still there is because they don't care because they're growing so fast they have so much money that it's not one of their top problems to move out but they all will Groupon did they all will Dropbox is starting to move out now Box is trying to move out of their their backup service so it's inevitable yeah and we heard from tapjoy this morning a few as we're in the in the the keynotes this morning you know they they have 450 million users a month I mean that's that's some serious scale and you know they're they're operating worldwide and they've just moved a huge amount of their infrastructure on to Amazon or excuse me on the OpenStack from Amazon I think what's interesting is they they built it right next to Amazon right they put it in Equinox with a fast connect to AWS I think that that is going to become more and more popular and then if it's cheaper and sometimes it can be dramatically cheaper to run you know the base workloads in your OpenStack private cloud maybe people you get hung up on this public private at the end of the day it's it's an engine for you to automate your IT and if it gets easier as you've said through things like MetaCloud I think they're a MetaCloud customer you know through those those ecosystem companies in the ecosystem then it becomes really kind of an easier and easier decision and there's a lot of companies that will be built to provide all of that stuff yes and that's why we are all here looking for opportunities and people start willing to start companies have to think about hey how can I make you know OpenStack as easy to use AWS well it and and allowing companies to shift over earlier than a Groupon or or a Pinterest could but but really making it easier and easier then then then you really are putting AWS in a transitional technology state which which is I think everybody's goal here absolutely and so I'm not personally raising money at the moment so I thought I'd open it up to questions you know I can hit you guys up later but are there any questions I notice we have a lot of mics so maybe there are some people that want to step up to them yes sir the talk has been around enterprise market what's your appetite for investing in something that's targeted towards service providers earlier this morning we we heard about orange and a couple of AT&T etc talk about their use of OpenStack and in NFE environments that's question one and I have a second question around networking but I can wait to the first question well question one so Akanda that we just launched is absolutely oriented towards service provider so I mean look you know the picks and shovels approach to OpenStack investing I think is great you know big companies will be big consumers of code that help them orchestrate manage and you know establish the services using OpenStack so I think it's in fact it's in many ways that that can be a less risky approach than you know from an investing perspective than you know trying to go out and get true end users for your you know your software or your service I would say that you know we've funded some companies actually even over the summer that are focused on on service the service provider market not not in this specific sector but in a different sector so we do like that that target market that being said the sales cycles are typically quite long and there are issues as well sometimes with with payables and actually getting paid for the work that you do but but but these are also you know as Simon said huge customers so so I think it's an area that we would look at but we would probably as an investor really try to understand the sales cycle understand the pain points because it is you know it's gonna be a longer bet in terms of seeing the results on from the business model I can tell you from personal experience some of the larger companies can take a little while to pay their bills I would say a fair warning I would say stay away from service providers if you can they can build a big business out there people have done that but it's long sale cycle you're probably if you have something better off trying to sell to the enterprise data centers and you know and from there move move all the way up but yeah it is and and you know the other challenge you have is the incumbents have much more stronger hold on service providers than they have in the enterprise side of the microphone for second the second question is about SDN you know we you talked about a few network virtualization examples including looks like a condo is in that space but what about the generic SDN market especially with ODL now coming to light you know is there any appetite for investing in more broader SDN based startups do you see any activity there thank you so I think as from a you know she's very selfish venture standpoint you know SDN's been a pretty big disappointment notwithstanding NYSERA which was a huge exit I like to think that is the first billion-dollar open-stack exit well it was it was with less than five million revenue to want really to one customer so so I wouldn't look at that as an example of let's go try and go build that and repeat it because it's just it's hard if you look at the companies like big switch plumb grid you know the ones that are out there I mean it you know they're doing yeah they're doing they're doing okay but they've had they've struggled I think in the enterprise and that and the reason is because my opinion just just my opinion most enterprises can solve their networking problems with VLANs they can make it work they can make it work with existing equipment today and SDN adds a lot of complexity to the equation in all right what you've heard us say up here is a pretty complex environment to begin with so I think where SDN's very powerful is in the service provider world but for some of the reasons you just heard us talk about that's got its own tricks and issues in terms of you know really dealing with that so I think it's got potential but I think the way I sort of think about it is it's going to be kind of the next wave we've got to have some large private clouds deployed before SDN's going to be a big market in terms of actual dollar spend not say there may not be some other big exits but in terms of you know dollar spend I think it's also been been difficult for people to kick the tires on an SDN environment where you know the handful of early options were all proprietary right and so it's not to say that it couldn't solve a problem so great that you wouldn't you know want to write a check for it but just you know open source again building a community means people can instantly try it they can run it on 10 servers they can run it on 50 servers they haven't really made a commitment to a to a vendor or anything they can just play around with it and see what how it works and it's a little bit different when you're in a market where you have a proprietary is are sort of like the only options and there are some that are starting to come along you know like a open contrail and there's a number of others that I'm suddenly forgetting but yeah cumulus and yeah I think I mean maybe it's just because I'm an operator probably more than a investor that I don't really think about the exit too much I mean look if you're in B2C investing do you think they're worried about revenue day one no they're not they're worried about adoption and so on and I think even in this space I mean if you believe in OpenStack and you believe in in you know where this is going in the transformation of IT that's happening two years ago with Ink Tank we really struggled to get anyone to look at it for exactly the same reasons people like no it's too hard you got these big incumbents you know service providers won't adopt enterprise you know doesn't like the fact that this is perceived as reasonably reliable and and so on but you know look where we are today with SwiftStack doing great and Ink Tank doing great and that sort of thing so I think to some extent you know if you're an investor you take risk you know you're not looking to have risk with a hundred percent guarantee that it's gonna work so I think I think SDN is is a great market I think it is the last sort of big frontier in terms of truly software defined and so I think I think there's gonna be a lot of investments in that space that pay off very very well and not just in dollar terms but in terms of satisfaction that you're really transforming a market that you know has incredible lock-in and incredible margins you know with the traditional vendors and there's an old saying that you know that being too early is indistinguishable from being wrong so you know there may be some of that at play here which is you know timing is everything so do you want to counter his his point you think he kind of gave give different view no only thing I would say that networking is one of those things where people take don't take lightly right so it's always like storage or whatever you can put something else on the side you know you can use test and dev whatever but you know networking if it doesn't work it doesn't work it's a very good point you can't put test and dev on networking that's the infrastructure that is new and it doesn't work you won't be able to do anything so I think that's why it's partly the reason that people are really against you know testing kind of you know these new new companies because they're really worried that hey if this goes down my none of my people can do any work right so it is it is it's a much higher bar than storage or any other infrastructure software that's out there so that's where I that's where I just disagree right virtualized networking is the point virtualized networking is automated it's algorithmic I mean it's exactly the same as storage storage distributed storage is all about distributing your data across many nodes across failure zones in the data center and so on and networking in my opinion is exactly the same it's in you know we with a condo we have intelligent distributed virtualized routing and the whole system is designed so that it works and if any one virtual router fails for any reason or if that server node is down there are plenty of other virtualized routers in the design of the system to pick up the workload so I think I think in and of its nature software defined virtualized networking you know we'll have that built in well so on this this point about networking that definitely brings up the specter of security which is you know one of the reason another reason people are reluctant to mess with the network which hasn't really fundamentally changed in many many years and you know Cisco's done done pretty well for for continuing to sell you what you have what you've had with a few new bells and whistles and Juniper and a few others but you know what about security are you guys looking at anything related to open stacking cloud in the security space you're looking at security I haven't heard of anything open-source security company that it doesn't have to be open source either just you know cloud computing and security there's got to be some opportunity there yes so I I think it's probably a good time to start thinking about security specifically around open stack you know Keystone is great but it's not comprehensive and I and I think security is a great example where the open stack community is not going to deliver a very good solution and the reason is because most people don't really care about a high degree of security because security it's not free it comes with its attacks and so I think it's a great area we're probably we're gonna see the really interesting innovation the base layer will be there with an open stack but we'll probably see some private companies deliver open stack security solutions that will probably be the best just simply because it's not gonna be broadly applicable to everybody that's dealing with open-stack me if you're deploying an open-stack test in dev cloud you really don't care about like you know some compliance security that you convince you know your your banking customers that that you're compliant with it's just not relevant so it's not gonna be part of the core but what was required I think to Mark's point about you know time kills investments if you made a security investment two years ago an open stack you'd be out of business because it just wasn't relevant but I think it's relevant today so I think it's a good time yeah our CEO summit we had like five CIOs and they all said that security was like basically an area where they could spend unlimited right if you had a budget you know they basically that music to your ears I say no but it's music to yours people starting companies right yes because you know it's hard right now with like in a lot of the big data stuff analytics and things like that there's so much stuff going on you can actually build security companies that are very different than what people are doing previously and it doesn't have to be a big appliance can do all software and arguably security has actually been the biggest exit in the open stack ecosystem which was Nasirah because one of the big value propositions of Nasirah was the tenant isolation of the layer 2 technology offered in fact that was really the value proposition was you know yes you can be running these virtualized compute instances in the cloud but you're gonna have tenant isolation so to some degree I think security security is very important in that way and I do think open source actually has a bit of a black eye with security and that needs to be addressed you know the last two big vulnerabilities open SSL and and then the bash vulnerability just in the last eight months have actually given open source a bit of a black eye because open source is supposed to be code that you know is scrutinized by many people and so vulnerabilities will show up really quickly or will be identified quickly but in both those cases they were sleeper vulnerabilities that were around for you know in one case two years in another case more than that 20 years so now that might be an opportunity yeah any more questions from the audience the the question was about valuations and exit values and how that might compare contrast versus open source versus proprietary it's not a very exciting exciting answer but I mean I think it basically matches up more or less with what you'd find in the proprietary world and to some extent it's even it could be even higher so if you just look at you know look at the Hadoop companies right as examples in terms of revenue multi-billion dollar valuations elastic search was like 600 something like that 700 elastic search right with Lucene and solar you know Docker was done at what 400 something like that by Sequoia note no revenue so so you definitely see you know loft evaluations I think it's I think what draw the drivers are different the drivers in open source is what Jay was saying earlier which is community adoption you know pace of adoption all these things where people like to draw you know lines connecting A to B and the steeper the graph the bigger the valuation kind of thing whereas in proprietary software companies you're gonna see that growth being driven more by customer adoption you know revenue some more basic metrics but I think the valuations are there and I think the exits are there so you know the jury's still out I guess on some of these really high-priced you know Hadoop companies what happens with them but it's likely they go public I mean I don't I mean they have the revenue today it seems in the revenue growth you could likely see Cloudera or Hortonwork go public next year we sold Jasper software tipco right you can be open source but proprietary software companies still have issues with open source I think VMware has done a good job buying several open source companies but a lot of the proprietary software companies their legal department still have an issue with it and they will kind of go through how much IP you have you know what is open source what is not so so you know as you build a company you kind of have to make sure that you kind of you know in your court making you know what is getting diluted by you know that you know they're opening up versus what is proprietary so yeah so it's not like a slam dunk that a proprietary software company would just buy open source companies yeah so we did this summer we we did if we let couch we did a funding round for for an accent one of our companies that has an open source heritage we sold match analytics which is not open source TMC and I would say from valuation exit standpoint they're they're pretty much you know similar metrics you know category specific and and I do think that on the proprietary side one benefit you have is that when the company does exit you have you have to go through all the scrutiny but but the IP is is yours there's no what's open source and what's not so I do think that you know in in those instances it it's you know it does it does help but again if you're if you if both you know two companies one has an open source you know background one doesn't and you know and more or less the technology is doing the same thing you know if if you have the community behind it I think you probably give the edge the open source side but probably not by a whole lot and a couple of quick tactical things in the case of a candor and Seth the trademark was incredibly important so making sure that you have you know secured your trademark early not only in the US but internationally ideally in key international markets you know making sure that you've protected your trademark so get your lawyer to put you know be on the alert list so that if other trademarks show up elsewhere in the world that are you know confusingly similar that you you know you send letters and you address that so that you show and to have owned that trademark and then the other thing is copyright as well if you've got team members just make sure you got a really strong IP assignment agreement because even though it is open source software the copyright in the open source software you know it is an important sort of measure of value at least in terms of your team's contributions to that software obviously other contributors won't have copyright they'll have their own copyright in the software outside of your company but that was another important factor to have certainty around so I had a question about of these exits you guys have all you know wouldn't be here if you hadn't sold some of the companies you invested in so does it matter to you you know what company buys one of your investments or is it really just who writes the biggest check by the way I'm a capitalist so it's fine with me if you say the biggest check it doesn't matter to me but it usually matters to the teams and and ultimately I was just I mean people think venture investors sell companies we don't sell anything I mean honestly we don't get to make to any decisions it's like being parents of your kids you think you're in control you're really not so we don't get to make that decision it's really up to the team because if the team you know if meta just use a recent example if MetaCloud came to me and said you know what we really don't want to partner with Cisco we don't know we don't work with Cisco what am I gonna say shut up get back to work go go to work for Cisco it's not it's not gonna work so really it's the teams that end up making the decisions so those cultures have to match and I think acquires test that very early on I would suspect the same thing was true with ink tank you know Red Hat probably tested the culture very early on with ink tank and whether or not it be a good fit and if they anything was gonna be a good fit my guess is they wouldn't have gone through with the acquisition so it does matter ultimately to the teeth of the teams to the acquires probably matters less to us but someone indirectly I just add that in the open-source space it and well I'd say in the proprietary software as well I think the having the CEOs buy in is critical you know when you know a lot of the time a lot of times a lot of the key engineers if not all of them you know will will be reviewed on a on a person-by-person basis by the by the acquirers so they really want to make sure that you know who they're who's coming on board you know typical terms include some you know some some lockup or or that requires certain people to stay for an extended period of time so there's you know these are these are strategic acquisitions and I think that they want to make sure that the value is captured so that goes both ways that the the company actually wants to join up we had one company in a different sector in the internet space called twitch which is a live-game stream platform they sold Amazon over the summer and and and they actually took a lower offer from them relative to some others based on the ability to stay in the people etc so so that's so that's so important yeah culture is really important it's tricky because I think when you're a startup you know you want to appeal to the broadest possible audience of potential you know partners and ultimately maybe acquirers and that's it a thing but I think my own personal opinion is that you're actually better to start out and make sure that you have a really strong culture and sort of a strong early view of of the companies that really fit your culture and fit your vision for the way the world is going to work and those that don't doesn't mean that you don't work with the companies that don't exactly fit but I think you know in the case of ink tank we had a really strong opinion of who we were as a company and what we represented and that actually helped a lot it narrowed the field of of companies that would invest and so on but I think also ultimately you know when it came down to getting a call from Red Hat you know they they knew exactly who we were and it wasn't just from interaction it was just sort of we exuded that kind of culture so it is tricky as an investor I'm sure you know having that it's a bit of a dichotomy you know so I'm interested in you know what you all hope to get out of your time here in Paris besides amazing food and wine I mean are you hoping to meet some new entrepreneurs are you catching up with the the ones that you already invested in are you just trying to see if what the traction really looks like I mean what what what brought you here besides this wonderful panel I just wanted to see what everybody is doing right not only entrepreneurs but also the big company right the MC is here you know Red Hat is here you know everybody is here and you know first of all I was amazed by how many attendees there are in the summit right I heard over 3,000 which is and I think it's probably more than that they actually had a 4,700 so that's an awesome biggest summit ever and you know and what's interesting sorry to interrupt but if you look at you know VM world which in is there traditionally is in you know Moscone center huge and they bring it to Europe has about 5,000 people so you know when you think about putting on an event in Europe it's at that scale now and it's a distributed and I also wanted to see what people are doing in various you know in networking security you know in orchestration everything right so for us for myself and in my firm it's it's all the above I think the comment was made earlier today in this panel about how AWS is really the you know the lion sitting in the you know on the planes waiting for this movement to take shape I called the monolith in the room and what whatever you want to call it and so I think that to Jay's point you know I'm here to really learn more about what's going on in the industry both from the large companies that are here as well as from the startups and the companies in between like like marantas and excenda so so that's that's our purpose but it's been it also has been great to see all the you know the community and you know I think we've you know this is a great great movement and you know we want to keep seeing progress so and I think given the attendees here we should maybe do do it in Moscone next time right you know we've talked about it we like to do things a little differently but we could certainly fill Moscone I believe if we if we went there I think you know I have one last question I think we're about out of time but I am curious we're talking about you know places geography you know how diverse OpenStack is I mean what regions are you all looking to to invest in I mean where do you see opportunity whether it's China or parts of Europe or you know anywhere anywhere in the world that that might be interesting for the crowd to hear about well I think OpenStack is global right I mean you look at the metrics around members of OpenStack I mean the US obviously is at the top of the list but you know there's there's some very close followers in you know China India and so on so OpenStack's global so the fact that there's a huge audience here when we're in Asia last year in Hong Kong there was a big number as well it was like four four and a half thousand attendees so I think to some degree you've you've almost got to think more globally than that and not necessarily I think if you if you're thinking regionally you know particularly given this platform you're probably thinking too small maybe an outmoded way of looking at yeah I mean the early you know some of just ink tank bikes way of example a lot of our early adopters were in Europe and Asia actually outside of the US because often they're the companies that are really trying to do it different they're trying to get a leg up over the competition and that sort of thing so you know that they tend to more want to look for alternatives to the you know the incumbent well we invested in Mirantis with the express purpose of taking them into the China market and one of the last covered stories in the in the funding release was the day after they released in Chinese a press release about the opening of the China office and we've already started to build a pipeline there and have customers and partners etc so so we think China is a huge has a huge is a greenfield for open stack and we really want to support both Mirantis and also the rest of the ecosystem to be successful there by the way United stack I think we have some folks from there here they're they're one of our earliest ecosystem companies in China so I give them a shout out so we are a global fund so we invest across geography right so we have investments here in Europe you know in Israel in India of course a majority is in the US but I will echo everybody else's thing about open source that's one of the key things that you see with open source companies is how right from day one their customer base is global because it's downloadable because you know so you always have this challenge that okay it's a small company how the hell am I going to open an office in Europe in Asia you know in Latin America where I'm seeing all these demand and how do I go about running my business there but that is you know the benefit of others I think something called the World Wide Web which can really help yeah but but because it's download because it's downloadable one click from anywhere you know right because when you have proprietary soft all the now people do this freemium models but if you have like a proprietary kind of appliance selling security or selling storage most of your customers are all going to be in the geography you tend which is typically US and then maybe Israel frictions a killer these days exactly but in open source you always have downloads across the world and then you have to figure out how to monetize those downloads I mean just be a little controversial I guess I would tell you advice for people in the audience though unless you're planning on just delivering your solution regionally and I'm actually about some investment company that's based in Argentina is going to service the Latin American market that's great they can be based in in Argentina great guys from McCartley right by the way right yeah it's a great it's a great team really good but having said that I will tell you it's gotten harder and harder to build a big company outside of Silicon Valley because what you'll run into very quickly and I think Simon price that even with even with ink tank like you know Brian and sage we're on a plane all the time coming up to Silicon Valley right met a cloud these guys they had there's this thing called surf air where you this is like subscription where airline thing where you pay a thousand bucks a month and it's unlimited travel they all had it a met a cloud and they were just in Pasadena getting up to Silicon Valley so we've seen this huge trend of entrepreneurs and it's where there's proprietary open source we got a company called Algolia another one called talk desk coming called pipe drive they're all based in Europe but all the exact the executive team has moved to the to the US particularly Silicon Valley so I tell you you got to think hard about that because I think what you'll find is that a lot of the partners the executives people you want to hire you may not be able to find them in Amsterdam or wherever it is you happen to be located you don't have to think hard that's what you got to do it's like you know every company that we talk to here we basically say that once you have the product done you have to move your you know CEO and maybe you know business team for sure and your marketing team but yeah big chunk of your company has to be in the valley which is sad but that's true I wouldn't say I mean I wouldn't say quite as hard as Jada's that you have to be there because there's there's certainly great examples of great companies outside of the US so that can happen but but I just you know just a cautionary note I mean I think I think the key is that you don't need this is just to clarify we're not saying that you have to have product development in Silicon Valley exactly right I mean the heart of your company what you're building you know it can be right where you started can be all your great people in fact that's a strategic advantage a lot of distributed you're really really talking about Silicon Valley is this network hub it's the ultimate Facebook for entrepreneurs basically and you run into people and for those of you haven't been and you have and you also have your building an enterprise company you have you know high-tech companies who are willing to kind of you know take a build try out the latest and greatest kind of technologies for their you know internal IT operations which you will not find anywhere else in the world right so so time check are we done okay thank you guys so much good luck in your hallway pitches to these guys thank you tell them about your traction