This Startup That Angered A Lot Of Open Source Fans Just Got $30 Million In Funding

Marten Mickos Eucalyptus SystemsMarten Mickos, CEO of Eucalyptus Systems

Photo: Flickr/linux_foundation

A software startup that lets users run their clouds just got a big fat $30 million round led by led by Institutional Venture Partners (IVP).Eucalyptus Systems makes “private cloud” software that is specifically designed to work with Amazon’s cloud. This lets enterprises fire up a cloud in their own data centres. If they want to use a public cloud, they can set up an Amazon instance and let the data flow between the two.

Eucalyptus has also been popular with hosting providers who want to siphon off a few of Amazon’s customers by offering compatible cloud services.

Last month, the companies announced a deal where Amazon will help Eucalyptus stay compatible with its cloud.

Eucalyptus is known in the open source community for a couple of reasons. Its CEO is Marten Mickos, of mySQL fame. MySQL is an open source database that was heralded as a proving point for open source software. It grew so popular that Sun bought it in 2008 for $1 billion.

That was a jaw dropping amount of money at the time, when people were still debating the wisdom of giving away software for free. MySQL is now in the hands of Oracle.

But Eucalyptus was unusual in another way. It was one of the first commercial companies to champion a concept called “open core.” This is where the company releases the source code of its base product under an open source licence, but keeps some extra features for paying customers hidden and proprietary.

That tactic upset some open source advocates. While these folks have no problem with a software company charging for software, they want access to the source code to modify as they wish — and to see what the product is doing with their data.

At one point, Eucalyptus was Canonical’s cloud for its Ubuntu Linux operating system. But Canonical ditched Eucalyptus for the fully open source OpenStack cloud operating system.

Eucalyptus has bounced back from that loss of partnership. It says that its software is used by more than 20 of the Fortune 100.

IVP joins existing investors Benchmark Capital, BV Capital, and New Enterprise Associates (NEA). To date, Eucalyptus has raised $55.5 million in capital.

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