Oracle wanted engineers from the recently shuttered cloud computing startup Nebula so badly, that it went to some pretty extreme lengths to get them, Business Insider has learned.
Nebula was a cloud computing startup that was mega-hot once upon a time, raising $US38.5 million to make it easy for people to upgrade their existing data centres into high-performance data centres of the kind used by Apple, Google, and Facebook to run their web apps.
That didn’t go very well. Nebula struggled to find customers, and ended up taking on $US3.5 million of debt financing before finally closing its doors on April 1st of this year. At its peak, Nebula had around 80 employees (full disclosure: I was one of them).
This week, around 40 Nebula engineers came to work at Oracle’s relatively new cloud computing business group, which is helmed by ex-Google and ex-Snapchat bigwig Peter Magnusson. The news was reported earlier by Re/Code.
It was Nebula’s financial debt that opened the first conversations between Oracle and Nebula, a person close to the situation told us. (Oracle declined to comment on this story.)
Once Oracle learned Nebula was closing, Oracle approached Nebula leadership with the possibility of acquiring Nebula’s IP along with most of its engineering talent, in exchange for a purchase price that could go towards paying off some of Nebula’s outstanding debts, according to a person familiar with the matter.
Nebula leadership was interested, and called the entire company into meetings with Oracle. Oracle explained that its cloud division is growing fast and made its employment pitch to Nebula engineers.
Oracle told Nebula leadership that it had to work on the fine points of the deal, but that it would send offer letters to the 40 or so engineers just to get the ball rolling on the deal, this person says. The offers themselves were very generous, ranging from $US500,000 to $US1,000,000 in annual salary.
Oracle really wanted this talent.
We hear that offers were not extended to executives like Nebula co-founder and Chief Strategy Officer Chris Kemp or CEO Gordon Stitt, though CTO Vishvananda Ishaya was offered and accepted employment at Oracle. Re/code reported about 90% of Nebula’s engineers got offers.
Once the offers were out, Oracle came back and said that they weren’t actually interested in the IP, and did not want the whole company, according to this person.
It makes some sense: Much of Nebula’s product was built on top of free open source software called OpenStack, which Oracle also has access to — plus plenty of its own technology that does similar things.
And the outright acquisition of a relatively small startup with technology it doesn’t need or want could have been more trouble to Oracle than it was worth to them.
Meanwhile, at Oracle, the company is investing heavily in its cloud computing strategy, competing with giants like Amazon Web Services in infrastructure services in a market it was late to enter — a market that Nebula specialised in.
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