infoTECH Feature

March 29, 2016

Microsoft: If You Can't Acquire Them, Invest In Them

If you can't beat them—or buy them, as Microsoft (News - Alert) has tried recently with a startup called Mesosphere—might as well join them, is how the conventional wisdom goes. Conventional wisdom is often conventional because it's true, and Microsoft demonstrated as much by becoming a “significant participant” in a new strategic investment in the company.

Microsoft, back in 2015, made an offer of $150 million on Mesosphere, and didn't get very far even with a nine-figure offer behind it. Considering that Mesosphere is currently valued at $1 billion—and its current investment represents $122 million with the newest $73.5 million investment from Hewlett Packard Enterprise and Microsoft coming into play—that might have been the smart move. Plus, Mesosphere has drawn investment from major names like Khosla Ventures and Andreessen Horowitz.

Mesosphere's big-ticket item is its Data Center Operating System (DCOS), a system that makes it just as easy to add applications to a data center as it is currently to add same to, say, a smartphone. That makes management of data center operations a lot easier, and given how many companies are going to data centers in one way or another, reducing the complexity of their management generally means cash savings. Already, DCOS has drawn some serious users like Verizon (News - Alert), as well as several other users who turn to the Mesosphere free version, Mesos. Mesos users include Apple and Twitter, so it's clear that this can handle the heavier users as well as lighter ones.

Mesosphere's software doesn't just work for data centers, either; it's also got a great potential for cloud systems like Microsoft Azure, which might have prompted some of Microsoft's interest. Putting Mesosphere software to work on Microsoft Azure can make a data center work better with cloud infrastructure.

It's obvious there's a lot of interest in the system overall; users like Verizon and Apple (News - Alert) don't just show up for a 99-cent game app. This has to be some powerful material, and it's easy to see why HP Enterprise and Microsoft would want a piece of this, if not the whole thing. With the increasing reliance many companies are putting on cloud operations, having a system that makes cloud operations better while still incorporating the data center is the kind of bridge technology that a lot of companies might turn to, and that means a lot of potential takers. Plus, it's also the kind of thing that draws interest in cloud technologies like Microsoft Azure, not to mention HP Helion. That kind of interest could be valuable, so Microsoft would almost be remiss in not at least owning a piece of this technology.

The cloud is already changing a lot of business as we know it, and systems like Mesosphere's could be a big part of that change in days to come. With that in mind, Microsoft may well have thought that if it can't own it outright, owning a part of it should do.

 
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