HPC in the Cloud: Eucalyptus Chief Talks Future After $20 Million Infusion

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July 06, 2010

Eucalyptus Chief Talks Future After $20 Million Infusion

An Interview with Marten Mickos, CEO

Nicole Hemsoth, Managing Editor, HPC in the Cloud

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The holiday weekend that just ended was probably just a little peppier for private cloud software vendor Eucalyptus Systems, following a fresh infusion of cash to the tune of $20 million. This dwarfs the first round of funding the company received, which was $5.5 million, most of which sits untouched to date.

According to CEO of Eucalyptus Systems, Marten Mickos, during a phone interview on Friday, "We had several venture capitalists who were knocking on our door every day but we only spoke with a small group of them, mostly they were the VCs who came recommended or we knew. We very quickly settled on New Enterprise Associates (NEA) but I will say, I've never raised capital this quickly and efficiently before -- it was a breeze."

Not all companies can call the funding process a breeze, but not all are as uniquely positioned as Eucalyptus Systems since their software, which is used widely in its open source incarnation, has been gaining popularity. Eucalyptus has its roots directly in HPC, where it began as a research project led by Rich Wolksi who was then at UC Santa Barbara. The open source project grew wings in mid-2009 following its first round of capital from Benchmark Capital, which allowed Wolksi to take his project from open source to the enterprise. Far from being a direct mention of a tree that the founder particularly liked, Eucalyptus is an acronym for "Elastic Utility Computing Architecture for Linking Your Programs to Useful Systems" which is, well, pretty much exactly what it does -- hence its adoption in both its open source and commercial form.

While it might seem that this kind of injection of funding would spur a new mission or vision statement on the part of a CEO with a high profile, this is not necessarily the case -- at least not to the degree one might think. Trying to talk about a company's vision with Mickos is complicated since he does not believe that vision is what makes a company succeed, especially as he noted, since he already agreed with the trajectory the company was taking when he took the position in March. According to Mickos, "A CEO doesn't need a vision, a CEO needs ears to listen to customers and markets. That's much more important than vision. If you look at some of the most spectacular failures in IT they were led by very visionary people -- but those people didn't listen. That's my philosophy."

So with the vision statement all taken care of, we were left to focus on more important matters as they relate to the influx of funding and the roadmap for the next two years that the Eucalyptus CEO discusses in some detail.

During the course of our 45-minute discussion, Mickos was asked several specific questions about the current state and future of the company now that it is in a better competitive position. We also spend time toward the end of our discussion talking about some of the lesser-known concepts that form the backbone of Eucalyptus and address what Mickos calls "misconceptions" about Eucalyptus, especially in terms of a few of its more recent decisions.

HPCc: The tenure of your involvement with Eucalyptus is relatively short; how did you come to the company -- what foundational ideas did you bring to the table and how might these be shaping Eucalyptus, especially now?

Mickos: So when I left Sun over a year ago I asked everyone when I left, "so what's bigger than open source" and some were just joking and said "closed source" (laughs) but the two serious ones were the mobile internet and the other was cloud computing. At the time, I didn't pay much attention but over successive months I came to realize these are really two massive shifts in IT. At one point, I realized I needed to be involved with the cloud but on the infrastructure side, which is close to my heart. I visited the Eucalyptus team and fell in love with the team and knew the market opportunity and original DNA of the team are wonderful. I applied and begged for them to bring me on and they did.

I think the client-server paradigm has been one of the biggest historical IT shifts up until now, one which happened in the late 80s -- it was a great paradigm that worked for a long time. Then came the web, which replaced the client part of client-server, which means we stopped having thick clients and instead used web browsers. But on the server side we stuck to the same architecture. Now with cloud computing, we are replacing and shifting away from the server part and building a new infrastructure for running applications or services that are scalable in a way never seen before. It is a major, major shift. It could take a long time to fulfill, maybe five to ten years, but it will be massive.

HPCc: If we are to look at your involvement with the business model, how have you shifted the vision or focus of the company since when you took over in March, if at all?

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