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<p><table class="image-container float_right" width="200"><tr><td><div class="image"></div><p class="source">Piston Cloud</p><p class="caption">Joshua McKenty</p></td></tr></table><span style="line-height: 1.5em;">Set on disrupting each other's business, <keyword id="6390344" type="CITY" weightage="60" keywordseo="Cisco">Cisco</keyword> and <keyword id="141089" type="CITY" weightage="60" keywordseo="VMware">VMware</keyword> are buying or backing startups to gain the upper hand in <keyword id="6356323" type="UNKNOWN" weightage="100" keywordseo="Enterprise">enterprise</keyword> networking.</span></p>
<p><span style="line-height: 1.5em;">The latest beneficiary of this proxy war is <keyword id="1773073" type="UNKNOWN" weightage="60" keywordseo="Piston-Cloud-Computing">Piston Cloud Computing</keyword>, which just </span><a href="http://www.pehub.com/184633/piston-cloud-raises-8m-from-cisco-data-collective-true-hummer-others/">announced</a><span style="line-height: 1.5em;"> Cisco as an investor in a new $8 million round of financing.</span></p>
<p><a href="http://www.businessinsider.com/piston-cloud-computing-2012-5%20">As we previously reported</a>, Piston Cloud is awesome for a lot of reasons.</p>
<p>Its founder, <keyword id="1773074" type="UNKNOWN" weightage="60" keywordseo="Joshua-McKenty">Joshua McKenty</keyword>, is an ex-NASA guy who created a super-important technology called <keyword id="1664678" type="UNKNOWN" weightage="60" keywordseo="OpenStack">OpenStack</keyword>. OpenStack is like an operating system for cloud computing, the catch-all term for the way more and more software is migrating up into the Internet. </p>
<p>OpenStack was built by a big consortium of IT vendors, including Cisco, and it sparked a major war in the IT industry between players like Red Hat, VMware, and Citrix.</p>
<p>(We also love Piston because they dressed employees up <a href="http://www.businessinsider.com/piston-cloud-computing-2012-5">as characters from the game Clue</a> for their corporate photos.)</p>
<p>Cisco's investment in Piston is interesting because Piston is designing OpenStack software for enterprise use. It competes head to head with VMware's vCloud operating system.</p>
<p>VMware turned Cisco, formerly a close partner, into an enemy last summer when it spent $1.26 billion to buy a startup called Nicira. Nicira makes a <a href="http://www.businessinsider.com/software-defined-networking-startups-2013-1">software-defined networking product </a>that severely disrupts Cisco's bread-and-butter networking-equipment business.</p>
<p>Until last summer, Cisco and VMware were bosom buddies, with important Cisco products relying on VMware technology. They also own a successful joint venture <a href="http://www.businessinsider.com/vce-is-a-company-that-is-will-soon-hit-1-billion-and-had-no-ceo-for-a-year-2012-7">called VCE</a>.</p>
<p>Since the Niciral deal went down, though, Cisco has been racking up ways to disrupt VMware. For instance:</p>
<ul>
<li>Cisco developed its own version of OpenStack, which lets it stop being a VMware customer, <a href="http://www.businessinsider.com/ciscos-vmware-openstack-2012-10">sources told Business Insider</a>.</li>
</ul>
<ul>
<li>A couple of weeks ago, <a href="http://www.businessinsider.com/ciscos-parallels-vmware-2013-1">Cisco bought a stake in Parallels</a>, a company that has technology that competes with VMware's core virtualization software line.</li>
</ul>
<ul>
<li>And today, it invested in Piston.</li>
</ul>
<p>Other investors in Piston's $8 million round include Hummer Winblad, True Ventures, and Data Collective.</p>
<p>CORRECTION: This story originally reported the funding amount as $9 million.</p>

This Rocket Scientist Is Helping Cisco Stick It To VMware-Again

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Fred Greaves/Reuters</span></p><p class="caption">A cosplayer dressed as Rorschach, hero of the book and movie "Watchmen."</p></div><p></p></div></div>The cloud wars between Amazon, Google, and Microsoft are heating up, with the three working tirelessly to attract the large business customers that bring in the big bucks.</p><p>From a technological perspective, though, <a href="http://www.businessinsider.com/why-amazon-is-so-hard-to-topple-in-the-cloud-and-where-everybody-else-falls-2015-10">the three cloud platforms are basically equal, and offer a similar sales pitch</a>.</p><p>So if customers just go by the technical specs of each platform, it can be a tough choice.</p><p>That's why customers are largely choosing which cloud to go to by their own "business logic," not the underlying technology, says <span>James Watters, Vice President and General Manager at </span><a href="http://pivotal.io/">Pivotal</a> - a Dell/EMC company and a partner to Google, Microsoft, and Amazon.</p><p>"It's almost a <a href="https://en.wikipedia.org/wiki/Rorschach_test">Rorschach test</a>," says Watters - where you can tell a customer's business priorities based on what they like or don't like about a particular cloud.</p><p>For example, given <a href="http://www.businessinsider.com/french-shipping-exec-on-amazons-logistics-plan-2016-2">Amazon's push into shipping and logistics</a>, Pivotal Field CTO Joshua McKenty says it's seeing some of its (unnamed) customers in that industry jump ship from Amazon Web Services.</p><p>By the same token, car companies are shy about going to Google, <a href="http://www.businessinsider.com/google-hiring-drivers-for-self-driving-cars-2016-3">given its push into self-driving vehicles</a>, and opting for Amazon instead.</p><p>"Cars don't go to Google," McKenty says.</p><h2>Microsoft's edge</h2><p>Pivotal is in a unique spot amid these cloud wars: It now boasts formal technology partnerships with Amazon, Microsoft, and Google to support <a href="http://www.businessinsider.com/what-is-cloud-foundry-2015-12">its mega-popular Pivotal Cloud Foundry software</a>. Pivotal Cloud Foundry is used by the likes of Home Depot and Mercedes-Benz to help build more software, faster. </p><p>It means that Pivotal is involved in plenty of customer discussions over which cloud provider a customer should pick. That gives Pivotal a lot of insight into which customers are jumping which way, and why. </p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Business Insider</span></p><p class="caption">Microsoft CEO Satya Nadella</p></div><p></p></div></div></p><p>For instance, McKenty says that among the Fortune 500 companies, Pivotal has a hundred joint engagements with the Microsoft Azure cloud. </p><p>"That's far in excess of any other cloud provider," McKenty says. </p><p>Microsoft's edge, McKenty says, is its existing relationship with the <keyword id="6356323" type="UNKNOWN" weightage="100" keywordseo="Enterprise">enterprise</keyword>.</p><p>Microsoft customers often end up buying lots of Azure compute capacity in a package with their usual Windows or Office licenses, sometimes without even realizing it, McKenty says. Given that they already have all of that credit, there's no reason to look elsewhere, he says, and they end up choosing Azure by default.</p><h2>Amazon and Google</h2><p>From Watters' point of view, Amazon's main advantage comes from the fact that it's often "first-to-market" with new features, thanks to its head-start in the industry.</p><p>Meanwhile, Google is "the purest at at-scale infrastructure," Watters says: the search giant's investments into getting really big, really fast means it knows how to offer customers a highly advanced and stable option for running their apps. </p><p>McKenty is a fan of <a href="http://www.businessinsider.com/how-google-plans-to-beat-amazon-2016-3">Google's recent signalling that it's ready to go for large enterprise customers</a>, under <a href="http://www.businessinsider.com/google-hires-diane-greene-to-run-cloud-2015-11">new cloud boss Diane Greene</a>: "It took them a while to get it right," he says, and describes Google as "a pleasure to work with."</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>AP</span></p><p class="caption">Google cloud boss Diane Greene</p></div><p></p></div></div></p><p>"I think it's real," McKenty says of Google's push into the enterprise. "It just takes time to change that culture."</p><p>Still, Watters says that the value of Pivotal Cloud Foundry goes beyond just moving faster. Because it lets you write apps with Java, the preferred programming language at most businesses, it means that your coders don't have to re-learn any skills to work with Google, Amazon, or Microsoft's clouds.</p><p>Which has the very pleasant side effect of making it much easier (though still not trivial, Watters warns) to move from one cloud to another. Just re-install Pivotal Cloud Foundry on your new cloud, reinstall your Java applications, and boom, you're back up and running.</p><p>That's a valuable escape hatch, McKenty says, just in case Amazon decides to conquer a new industry and your "business logic" changes.  </p><p class="tagline">Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/view-amazon-lifetime-order-history-2016-2">Here's how to see how much you've spent on Amazon in your lifetime</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="85Z3c4MTE63ILItwGAW-Hn2RKesYMYyc" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Choosing between Amazon, Microsoft, or Google in the cloud wars is a 'Rorschach test'

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Pivotal Labs</span></p><p class="caption">James Watters, Vice President and General Manager at Pivotal Labs</p></div><p></p></div></div>In the tech industry, there's always been a balance between small, fast startups, and big, lumbering enterprises. </p><p>But that balance is shifting as big enterprises figure out the secrets of speed. </p><p>"I think 2016 will be the year where [big enterprises] start to kick the ass of the disruptors," says James Watters, Vice President and General Manager at <a href="http://pivotal.io/">Pivotal Labs</a>, a spinoff from EMC and VMware.</p><p>An under-the-radar tool called <a href="http://www.businessinsider.com/pivotal-software-ceo-paul-maritz-steps-down-2015-8">Cloud Foundry</a>, first introduced as a VMware project in 2011, is helping them get there.</p><p>Cloud Foundry is a bit of free, open source software that provides a common platform for building applications that run in the cloud - either in your own data center, in a <a href="http://www.businessinsider.com/why-amazon-is-so-hard-to-topple-in-the-cloud-and-where-everybody-else-falls-2015-10">big public cloud like Amazon Web Services</a>, or really anywhere else. </p><p>Vendors like Pivotal Labs, HP <keyword id="6356323" type="UNKNOWN" weightage="100" keywordseo="Enterprise">Enterprise</keyword>, and IBM sell software based on Cloud Foundry, making it kind of like an operating system for building applications in the cloud.</p><p>In the world of enterprise software, it's both widely used and drastically lacking in hype, making Cloud Foundry possibly the most-used software you've never heard of.</p><p>But the proof is in the pudding, as they say, with companies like Hulu, Southwest Airlines, Comcast, and Allstate Insurance have been using Cloud Foundry to improve the ways they build and deliver software.</p><p>Today the Cloud Foundry Foundation announces a new certification program, giving software vendors a way to offer a guarantee that their version of Cloud Foundry works with all other versions of Cloud Foundry. </p><p>Here's how Cloud Foundry is shaking things up.</p><h2>The foundry</h2><p>The beauty of Cloud Foundry is that any developer anywhere can download the source code and tweak it to suit their own needs.</p><p>Sam Ramji, the CEO of the Cloud Foundry Foundation that heads up development of the software, describes it as "having the consistency of [Microsoft] Windows without the hegemonic control."</p><p>An enterprise can build an application once, and host it anywhere, so long as it supports Cloud Foundry. IBM's BlueMix cloud is built on top of Cloud Foundry, as is HP Enterprise's Helion on-premise cloud software. Amazon Web Services can run Cloud Foundry, too, but it's up to a developer to get it running.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Screenshot/YouTube</span></p><p class="caption">Cloud Foundry Foundation CEO Sam Ramji</p></div><p></p></div></div></p><p>That's a plus, if  you choose to one day abandon your own data center for IBM or Amazon, Cloud Foundry makes it so much more simple to move. It's like getting a new phone and redownloading all your apps.</p><p>That consistently makes it easier to improve existing apps, too. It's a common set of tools that lets everybody move faster.</p><p>"You want standardization, because that reduces complexity," Ramji says.</p><h2>Continuous delivery</h2><p>The rise of the smartphone app birthed an important trend in software development,called "continuous delivery." Basically, it means that your software will get a bunch of small updates every other week rather than a big one every year.</p><p>This was something that gave a lot of startups a competitive edge, especially early on in the app economy. </p><p class="p1">While the old companies were taking their sweet time poring over every update, passing every feature through endless committee meetings, and generally keeping the pace at "slow and steady," startups had been tweaking things, listening to feedback, and tweaking more. </p><p class="p1">It meant that markets are won and lost by the time that there was a market at all. Just look at disruptors like Tesla and its electric cars, which came to market before any of the traditional vendors had anything that could even compare.</p><p class="p1">Or even at big tech companies like Google and Facebook, which build apps and tools as an experiment, and discard anything that doesn't work.</p><p class="p1"><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Joshua McKenty</span></p><p class="caption">Pivotal Field CTO Joshua McKenty</p></div><p></p></div></div></p><p class="p1">But tools like Cloud Foundry could change the equation. It can give an enterprise startup-like agility, Pivotal's Watters says, while also combining that with their established cash flows and customer relationships.</p><p class="p1">"The only advantage the disruptors have is speed," says Watters. </p><p class="p1">It's led to something of an awakening in the CEO space, says Pivotal Labs Field CTO Joshua McKenty. CEOs at big companies - not CIOs or IT guys - are realizing the value. They're asking for continuous delivery, knowing exactly what it means, because they know that startups are doing it and they're not.</p><p class="p1">It's led to something of a renaissance in the IT world, McKenty says. Now, when the big guys go gunning for startups, they have the right bullets in the chamber. </p><p class="p1">"They are so clear in vision and so fast in execution now," McKenty says. </p><p> </p><h2> </h2>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/everything-about-star-wars-2015-12">Everything that happened in the first six 'Star Wars' movies in 4 minutes</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="IyNndqeTqrPnPY3gytZf1t2z889TYBcn" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

This under-the-radar tool is helping huge companies outmaneuver little startups

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>Two more IT giants have bought two more startups in a hot but strange market called OpenStack.</p><p>Cisco <a href="http://blogs.cisco.com/news/cisco-announces-intent-to-acquire-piston">bought a company called Piston Computing</a>, whose roots go back to the very creation of OpenStack, when it was born as a project inside of NASA.</p><p>IBM bought <a href="https://www.blueboxcloud.com/insight/blog-article/ibm-acquires-blue-box-to-bring-private-cloud-to-the-masses">a Seattle startup called Blue Box.</a></p><div style="position: absolute; top: -1999px; left: -1988px;" id="stcpDiv">Nas</div><p>Neither Cisco nor IBM disclosed terms, and it's not clear yet whether all these acquisitions in this market are good-news exits for the startups, or more like fire sales.</p><p>Insiders tell us it's a bit of both.</p><h2><span>Why OpenStack matters to the big guys</span></h2><p>OpenStack is a free and open source cloud operating system<a href="https://www.openstack.org/"> jointly created by a who's who of vendors</a> in the IT industry. It was their way to compete with cloud giant Amazon, and with cloud software front runner VMware.</p><p>With OpenStack, users aren't locked in to one vendor (such as Amazon). They can use OpenStack in their own data centers, and easily move apps and data from their own data centers to any other OpenStack cloud computing service provider.</p><p>Red Hat's CEO recently told us he expects OpenStack to help generate Red Hat's "next billion dollars."</p><p>So naturally, OpenStack<a href="http://www.businessinsider.com/openstack-vc-investments-are-slowing-2015-4"> launched a lot of startups</a>. But, strangely, it's been a mixed bag for them because they are competing with some of the largest companies in tech: HP, IBM, Red Hat, and so on.</p><p>This juxtaposition became clearer recently when an OpenStack startup called <a href="http://www.businessinsider.com/openstack-startup-nebula-goes-out-of-business-2015-4">Nebula closed its doors</a>. Its co-founder was one of the creators of OpenStack when it was born as project inside NASA. The Nebula team was then<a href="http://www.businessinsider.com/oracle-hires-nebula-employees-2015-5"> hired by Oracle</a>, who swept in after Nebula shut down. <span style="line-height: 1.5em;">We understand that </span><a href="http://www.businessinsider.com/oracle-hires-nebula-employees-2015-5">Oracle wasn't cheap about it</a><span style="line-height: 1.5em;">, and offered employees annual salaries ranging from $200,000 to as high as $1,000,000. </span></p><p>That's one of the weird things about this market. The startups <a href="http://www.businessinsider.com/openstack-vc-investments-are-slowing-2015-4">are floundering as VC money dries</a> up for them. But the big companies are getting into it with gusto, and there's a huge talent shortage.</p><p>About today's acquisitions, one person told us, "Neither had a chance to make it as a standalone player long term. OpenStack is a market with no intellectual property involved. That means you compete on process and scale ... small guys simply don't have the scale to compete anymore."</p><h2>Good for Blue Box</h2><p>A person in the OpenStack industry told us that "Blue Box did well" with its exit to IBM, though we haven't been able to confirm a dollar figure.</p><p><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div>Blue Box offered OpenStack as a cloud service and that seemed to be a hit. It had at least 600 customers, <a href="https://www.linkedin.com/in/mattschiltz">its CEO Matthew Schiltz said in his LinkedIn profile</a>. It had raised 26.6 million in 6 rounds including $4 million in January and $3.3 million in debt.</p><p>Still, it hired Schiltz as CEO about a year ago, a few months after it closed the $18 million round.</p><p>He's a startup CEO-for-hire with a history of selling his companies. He previously ran Symform (bought by Quantum), Tier3 (bought by CenturyLink). He also ran DocuSign back in the day.</p><h2>Piston seems to be an acqui-hire</h2><p>Piston definitely seemed to be an acqui-hire for Cisco.</p><p>According to one person who is close to that company, "Being an independent startup in a market of multiple 800-lb gorillas is an extremely tough position; regardless of almost anything (customer traction, product capability and maturity, etc) joining forces with a larger entity is the simplest way to 'Level Up' to this challenge."</p><p>Piston was loosely related to the now-gone Nebula. The two guys who worked on that cloud project at NASA, Chris Kemp and Joshua McKenty, each went off to found separate startups: Chris Kemp co-founded Nebula and stayed with it until it ran out of money and sold itself to Oracle last month.</p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>Joshua McKenty co-founded Piston, stepped down from the CEO role after two years, spent another two-ish years as CTO before leaving his company to join Pivotal Computing, the EMC cloud company being run by former VMware CEO Paul Maritz.</p><p>We understand this had to do with Pivotal making him an offer he couldn't refuse, instead of being pushed out at Piston.</p><p>Piston raised $22.4 million total, including taking on $3.5 million in debt. Its last funding round was for $6.4 million in April, that coincided with $2 million in debt. And now <a href="http://blogs.cisco.com/news/cisco-announces-intent-to-acquire-piston">Cisco has bought it</a>.</p><h2>Eyes on Mirantis</h2><p>The industry will now be watching one of the more successful OpenStack startups in the industry: Mirantis.</p><p>Mirantis makes it living doing OpenStack consulting and offers its own OpenStack software, too. It's like the Cloudera of OpenStack. It's raised $120 million in 3 rounds, including a $100 million round in early 2014. So if Mirantis is ever sold, we would expect it to be a big exit.</p><p>We hear from people in the industry that Mirantis is routinely fending off acquisition offers but wants to stay independent and become a huge software company.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/game-of-thrones-stars-real-life-2015-4">Here's what 'Game of Thrones' stars look like in real life</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="NzaTRldDoXZcQw9XO6NGGy8J2dbDaF1A" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Cisco and IBM each bought a startup in this strange but really important cloud computing market

<p><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div>Once upon a time, venture capitalists were tripping over themselves to invest in a hot new cloud computing technology called <a href="http://www.openstack.org">OpenStack</a>. </p><p><span style="line-height: 1.5em;">It began with Piston, which raised $4.5 million in 2011 - considered a "massive" round  at the time. </span></p><p><span style="line-height: 1.5em;">Other startups with their fingers in the OpenStack pie, like Mirantis, Nebula, Nicira, and Cloudscaling, received collective investments of more than $200 million. VC firm Storm Ventures says that collective investment in the space</span><span style="line-height: 1.5em;"> had hit </span><a href="http://www.openstack.org/blog/wp-content/uploads/2014/10/StormVentures_OpenStack_Infographic_ForwardPushMedia.png">$1.8 billion</a> by 2013. </p><p>Now, the dream may not be dead, but it's certainly on life support.</p><p>Venture capital support for OpenStack startups has all but dried up. In the last week, one of the once-hottest OpenStack startups, Nebula, <a href="http://www.businessinsider.com/openstack-startup-nebula-goes-out-of-business-2015-4">went bust</a>, and another one, Piston <a href="http://www.forbes.com/fdc/welcome_mjx.shtml">announced </a><span>that you could now use its core product to install hot software like Hadoop and Mesos in addition to the cooling OpenStack - a huge departure for the startup that was once described as "<span>best suited to deliver" OpenStack by investor <span>Lars Leckie of Hummer Winblad.</span></span></span></p><p><span style="line-height: 1.5em;">Meanwhile, bigger companies like Red Hat, HP, and Cisco are leveraging their own considerable market might, gobbling up lesser startups or squeezing them out of the market. </span></p><p><span style="line-height: 1.5em;">Worst of all, after seven years of development, there aren't many big companies apart from <a href="http://www.infoworld.com/article/2890873/cloud-computing/walmart-doubles-down-on-openstack.html">Walmart</a> willing to step forward and say that they're actually using OpenStack. </span></p><p><span>What happened to the cloud of tomorrow? Where has all the money gone?</span></p><h3><span>Harder than it looks</span></h3><p><span>The hard answer is that venture capital firms jumped the gun.</span></p><p><span>Originally developed by NASA and Rackspace Hosting, OpenStack was supposed to let anybody, anywhere turn their data centers into a super-efficient cloud similar to the one Amazon Web Services runs. The idea was that customers would do this within their own data centers first, saving lots of money on hardware and other resources. Eventually, as it took off, the biggest companies would begin to rent space in their OpenStack data centers, becoming service providers just like Amazon.</span></p><p>According to the dream, as the most popular open source project of all time, OpenStack would be guided by the community - from tiny venture-backed startups to companies like Citrix, Dell, and Intel - and given away for free, in an effort to stick it to the likes of Amazon and VMware. </p><p><span>But back when investment in OpenStack first started around 2010, the hype was way ahead of the technology, and OpenStack took a lot of work to get up and running with even basic features and low reliability.</span></p><p><span><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div>"I was horrified at all the hacks it took to get it to work," recalls Storm Ventures Managing Director Ryan Floyd on his first look at OpenStack several years ago. (Floyd led an investment in OpenStack startup Metacloud, which Cisco bought last year.)</span></p><p>Because installing OpenStack was hard, there was a tremendous opportunity for startups to make it push-button easy. This was the pitch from the recently defunct Nebula, as well as Piston. </p><p>But cloud computing infrastructure is a critical decision for the customer, and projects to change it could take as long as a year to get approved.</p><p><span style="line-height: 1.5em;">So the startups needed to move fast to show returns for their investors. Their customers needed to move slowly to make sure they weren't staking their company on unproven technology. That fundamental mismatch is a problem.</span></p><p><span style="line-height: 1.5em;">It doesn't help that some of these startups were building on shaky foundations.</span></p><p>"The OpenStack code was very immature when they started [Nebula]," says Greylock partner and OpenStack skeptic Jerry Chen.</p><p><span style="line-height: 1.5em;">But it wasn't entirely the fault of the startups. The non-profit organization responsible for guiding the open source OpenStack project bears its share of the blame.</span></p><h3><span style="line-height: 1.5em;">A political battlefield</span></h3><p><span style="line-height: 1.5em;"><a href="http://www.businessinsider.com/cisco-piston-cloud-vmware-2013-2"></a></span><a href="http://www.businessinsider.com/cisco-piston-cloud-vmware-2013-2">Joshua McKenty</a><span style="line-height: 1.5em;"> co-founded both the OpenStack project at NASA and the OpenStack startup Piston, and served on the board of the OpenStack Foundation, which oversees the software. (<span>He's now the Field CTO for Pivotal, which means he goes out to customer sites and helps them install their own next-generation computing infrastructure.)</span></span></p><p><span style="line-height: 1.5em;">He says that politics have hamstringed OpenStack startups for some time now. He says of the developers working on OpenStack, </span><span style="line-height: 1.5em;">"They're not the people who are using it, they're the people from the vendors who are selling it." </span></p><p><span style="line-height: 1.5em;">In effect, the Foundation has helped deliver the market into the hands of the big companies. McKenty describes the foundation as "aggressively anti-startup."</span></p><p><span style="line-height: 1.5em;">There's a reason why things worked out this way. As the startup OpenStack products, like the ones from Nebula and Piston, failed to set the market on fire, companies looked to install OpenStack themselves. But it wasn't easy.</span></p><p><span><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div>And so companies with big service organizations - like Red Hat, Cisco, and HP - get the call to do the implementation. There was no big, sexy OpenStack product involved. They just did the hard work of making it work for their customers. </span></p><p>Red Hat had years of open source chops, since it makes its money from helping customers install and support the similarly free Linux operating system.</p><p>HP and Cisco also have years of experience catering to huge enterprises. HP snapped up Eucalyptus Systems to build out its OpenStack cloud business, and Cisco purchased OpenStack startup Metacloud (which, incidentally, was a Storm Ventures investment that made an 8x return for the firm, Floyd says). </p><p><span><span>Startups simply couldn't compete with these huge services businesses. </span></span></p><p><span><span>"If you want to take venture money, and want to scale quickly, you can't do services," Floyd says. </span></span></p><p><span>The OpenStack Foundation knows this, McKenty says, and has relied on those bigger companies to get OpenStack into more customer sites around the world. Sometimes, it's bent over backwards to serve the needs of those big companies.</span></p><p><span>McKenty recalls one OpenStack Foundation board meeting last year where Red Hat had the agreed-upon agenda thrown out the day before just so the company could bring in its lawyers to quibble with the board over a minor point in the software - a point that had been addressed and solved in a previous meeting, but not to Red Hat's advantage.</span></p><p><span>"The worst thing for OpenStack right now is Red Hat," McKenty says. </span></p><p><span style="line-height: 1.5em;">McKenty left the OpenStack Foundation last September.</span><span><br><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div></br></span></p><p><span>It's not all doom and gloom for OpenStack startups. One startup, Mirantis, raised $100 million last October to take on those big companies in the OpenStack services arena. Another Storm Ventures portfolio investment, SwiftStack, builds storage software built on part of the OpenStack code, and raised its own $16 million round also last October. </span></p><p><span>Floyd, for his part, is certain that OpenStack is something the market needs, and that its time will come around again for startups.</span></p><p><span>But where their used to be a vibrant, competitive OpenStack field, the conversation is now totally dominated by the big players. And if they were skittish before, the failure of the once-hyped Nebula to find additional funding is giving venture capitalists even more cause to stay far away from the market. </span></p><p><span>"At Greylock, we're looking for winner-take-most markets," Chen says. "The large vendors got what they wanted." </span><span style="line-height: 1.5em;"> </span></p><p><span style="line-height: 1.5em;"> </span></p><p> </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/daymond-john-biggest-mistake-5-million-dollars-business-shark-tank-2015-3">This 'Shark Tank' investor once made a $5 million mistake</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="Mzdms2dDpyen7Bvj0b0f_ziCslmTlSMl" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Investors were once tripping over themselves to get into a hot technology called OpenStack. What happened?

<p><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div>Pivotal has just hired engineer Benjamin Black - the <a href="http://www.businessinsider.com/benjamin-black-and-amazon-web-services-2014-7">regular Amazon employee</a> who co-wrote the paper that would become cloud titan Amazon Web Services all the way back in 2003.</p><p>Black most recently worked at Microsoft, where he helped build Office 365, its answer to Google Apps, and prior to that founded a startup called Boundary, which monitored computer networks. Wired <a href="http://www.wired.com/2015/02/cloud-computing-pioneer-moves-emcs-pivotal/">first reported the news </a>last week.</p><p>Black becomes the third such cloud pioneer to join Pivotal recently, joining OpenStack co-founder Joshua McKenty and Puppet Labs co-founder Andrew Shafer.</p><p>These are important people in the world of cloud computing - a major movement that is reshaping how companies spend money on technology.</p><p>OpenStack is the four-and-a-half year old open source cloud project that took the basic concept behind Amazon's cloud computing technology and made it available to anybody. It was started by Rackspace and NASA, and includes huge enterprise companies like HP and Cisco among its contributors.</p><p>Puppet is one of two companies (along with Chef) at the forefront of a movement called "DevOps," which makes it easier for the people who develop software to run the operations necessary to support that software, rather than relying on the IT department to do it.</p><p>So what's so exciting about Pivotal that it's attracting this kind of talent?</p><p>Simply put, Pivotal is letting these cloud computing stars tackle a new and interesting challenge - how to deal with tremendous amounts of data generated by things like people clicking through web sites, or sensors in millions of devices.</p><p>Pivotal, which was spun out from data storage giant EMC and its subsidiary VMware, makes tools to build applications that make sense quickly of massive amounts of data. Cisco, Southwest Airlines, and Netflix are all Pivotal customers.</p><p>Pivotal is perhaps best known for shepherding the Cloud Foundry open source platform-as-a-service, which helps speed up application development and deployment. Cloud Foundry is popular enough that in addition to Pivotal's own Pivotal CF offering, IBM built its own version ("distribution," in open source parlance) of Cloud Foundry for its BlueMix service, and HP did the same with its Helion cloud.</p><p>Recently, Pivotal announced that it was <a href="http://www.datacenterknowledge.com/archives/2015/02/17/pivotal-opens-big-data-suite-forms-enterprise-hadoop-consortium/">releasing its suite of big data-crunching tools</a> (including Pivotal HD, its version of Hadoop) to the open source world, allowing anybody to build on them. At the same time, Pivotal revealed a partnership with major big data player Hortonworks and opened the gates to an industry association - the Open Data Foundation. </p><p>For his part, Black is going to Pivotal to work on internet-of-things projects, <a href="http://www.datacenterknowledge.com/archives/2015/03/03/ec2-cloud-founding-father-black-joins-pivotals-iot-lab/?utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+DataCenterKnowledge+%28Data+Center+Knowledge%29">according to Data Center Knowledge</a>, which broke the news. The internet of things is a catchphrase for millions of connected devices, which generate their own deluge of data, and Pivotal wants to help companies process it. </p><p><span>This also speaks to why Pivotal is experiencing this momentum. Bolstered by the leadership of CEO Paul Maritz - formerly CEO of VMware, and before that a top leader at Microsoft - and an executive team of EMC Greenplum big data veterans, is trying to position itself as the company actually helping other companies do cool things with huge amounts of data. </span></p><p><span>Obviously, it's making a solid case, if hotshot technologists are joining in threes.  </span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/excel-pivot-tables-analyze-big-data-2014-12">How To Use Excel Pivot Tables To Analyze Massive Data Sets</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="Y3c2RjbTq9HjugYct7rCHmtEDeH64t81" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

You Searched For "Joshua McKenty" and got 6 results

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