The CEO of D2iQ, the $775 million startup formerly known as Mesosphere, explains its big bet on the Google-created Kubernetes and says that an acquisition is 'certainly an option down the road'
- On Tuesday, the $775 million startup D2iQ - formerly known as Mesosphere -announced a product called Kommander.
- Kommander is designed to help people manage security standards and data services for applications on Kubernetes, an open source software project started by Google engineers that's become something of a standard in the cloud computing industry.
- This is one of D2iQ's first major product launches since it changed its name in August, and it's part of the company's overall strategy to refocus on Kubernetes.
- The previous name, Mesosphere, was a reference to the Apache Mesos software project - which confused customers as the company expanded into Kubernetes, said D2iQ CEO Mike Fey.
- "D2iQ" stands for "Day 2 Intelligence."
- D2iQ CEO Mike Fey said that the company is done raising money for now, but that "profitability is still a couple years out," and that the possibility of the company getting acquired is "certainly an option down the road."
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Back in August, the $775 million cloud services company D2iQ - short for "Day 2 Intelligence" - made the bold step of changing its name.
Before, it was called Mesosphere, with its name stemming from the open source Apache Mesos software that allows users to manage "clusters" of servers, helping manage resources across both their own data centers and the cloud. Mesos has been used at Twitter as a way to help the then-young service scale, as well as in Apple's Siri.
But over the last year, the company has shifted to focus more on Kubernetes, a popular open source cloud computing project originally started by Google engineers. Like Mesos before it, Kubernetes has become a key tool at many companies to help them run large scale applications. Kubernetes, however, has become a massive movement in the cloud computing business, emerging as something of an industry standard.
Cloud giants Google, Microsoft, and Amazon Web Services all offer Kubernetes services, while VMware is also making major investments in the tech through its acquisitions of Heptio and Pivotal.
Against this backdrop, D2iQ believed that its new focus warranted a name change because it wants customers to know that the company isn't only about Mesos. It first got into the Kubernetes management game over a year ago, with the name change intended of a sign of how serious it is about the market.
On Tuesday, D2iQ underscored the point with the launch of Kommander, its first new Kubernetes product since it changed its name. Kommander helps users manage security standards and data services for Kubernetes applications across multiple "clusters" of servers.
"We believe that ultimately every enterprise is adopting Kubernetes," D2iQ co-founder and CTO Tobi Knaup told Business Insider. "Everyone will be running many different clusters. We believe it's a great delivery platform for enterprises to do Kubernetes and workloads on top."
"We've built out an entire product line around Kubernetes since the rename," Knaup said. "The key is really that cloud-native is a journey and every organization is somewhere on that journey. We want to make sure we can support customers alongside that."
Meanwhile, beyond its product strategy, D2iQ is working on refining its business, too. Just last year, the company raised $125 million in venture capital, and Fey says that it's not planning on going after more investment for now. The goal, CEO Mike Fey told Business Insider, is to get the company to profitability.
"We're doing well," Fey said. "We have a large amount of cash in the bank. Right now profitability is still a couple years out...If you can get to cash flow positive, you control your destiny and can get into any destination you want. We watch the markets and try to get smart."
'Everyone thought of us as just that one thing'
Today, D2iQ provides software that helps customers manage Kubernetes, Mesos, and other open source projects so they don't have to set it up themselves. It also provides training and classes to help customers use these technologies.
The problem with the old name Mesosphere was its focus on Mesos, says Fey, who took over for co-founder Florian Leibert last December to help grow the company. Customers saw Mesosphere as a resource for Mesos, but not necessarily other key technologies.
"Despite all this other amazing work we were doing in Kubernetes or AI, everyone thought of us as just that one thing," Fey said. "It was speaking too much on our behalf. When you grow out of that product and you want to be more than one product, it doesn't punch back."
Fey says the entire 300-person company was put on a "giant sprint" as the team sought new branding.
"It really galvanized the company," Fey said. "We had a clear idea of what we were building and why were building it."
Helping customers 'be smart on day 2'
At first, the team considered changing the name to Sphere, but there were other companies with that name. They also thought of names around cloud, but at the end of the day, they settled on a name related to "Day 2." Indeed, Knaup says, employees often call the company "Day 2" for short.
For developers, "Day 0" refers to the design and planning phase of any project. Day 1 refers to the pilot and installation phase. Finally Day 2 is the production and ongoing operations phase.
As D2iQ executives interviewed their top customers, Knaup says, the phrase "day 2" kept coming up. Day 2 is where challenging issues like upgrading, security, and maintenance crop up - issues that D2iQ and its products are designed to help solve, Knaup says.
"That's where we want to focus, helping our customers be smart on day 2 and helping our customers do smarter day 2 operations," Knaup said.
As for the second part of its name, "iQ" stands for intelligence. For D2iQ, this includes services and trainings for its customers, as well as product features that automate repetitive tasks.
"We want to capture, codify and enable the best practices and the intelligence around running great day 2 operations," Fey said.
Fey says the team was nervous once they changed their company's name, but customers were supportive and "loved the concept of Day 2."
"They knew the product wasn't going away," Fey said. "They were happy we were expanding past the singular product."
And, importantly, it doesn't mean that D2iQ is abandoning Mesos, the software project that literally made its name in the beginning.
"It's still a major source of revenue," Fey said. "We've got a product roadmap out for a year plus."
An acquisition is 'certainly an option down the road'
Fey said that the possibility of D2iQ getting acquired is "certainly an option down the road."
Back in 2015, well before the D2iQ rebranding, the company is said to have turned down a $150 million acquisition offer from Microsoft. Times have changed, however, and the company has a new name and new leadership. Fey says that the company is focusing on its own business, but that its success is attracting interest.
"There's always interested people in the space we're in," Fey said. "It's a really hot space. We believe we built an amazing platform. We'd rather focus on selling that or growing revenue for that than shopping ourselves. The market is hot. Whether you know it or not, somebody's looking at you and trying to keep tabs on the environment, if anything."
In the meantime, D2iQ continues to focus on building out its business and shifting to Kubernetes. Fey says the company's biggest competition wasn't any single company. Rather, he says, D2iQ found that it was often going head-to-head with the existence of Kubernetes itself - which is why he's continuing to make such a big bet on it.
"Kubernetes is a force," Fey said. "There's a massive amount of innovation occurring in that world. We make sure we brought that to the Kubernetes world as well."