Hewlett Packard Enterprise and Microsoft Just Invested Millions In This Hot Startup

March 24, 2016, 11:30 AM UTC
Photograph by Getty Images/Brand X

The technology market may be rough, but that’s not stopping business computing giants from investing in fast-rising startups.

Hewlett Packard Enterprise (HPE) and Microsoft (MSFT) said on Thursday that they contributed to a $73.5 million funding round for data center software startup Mesosphere. HP Enterprise led the round, along with new investors Microsoft, A Capital, and Triangle Peak Partners, along with previous investors Andreessen Horowitz, Khosla Ventures, and Fuel Capital.

Mesosphere now has $126 million in total funding. The company declined to disclose its valuation.

The startup’s technology can be thought of as a data center mother brain that automatically distributes the appropriate resources and data to power a software application, so IT staff doesn’t have to worry about tweaking servers or other gear behind the scenes.

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Similar to other enterprise technology startups like Docker and Databricks, Mesosphere is trying to make a business out of open-source technology that coders can download for free. The company sells a commercial package consisting of its open-source Mesos data center coordinating technology bundled with its own proprietary software.

There’s fierce competition between companies that specialize in technology that squeezes more efficiency out of data centers to better power modern software like Uber’s ride-sharing service. Google (GOOG), Amazon (AMZN), and the startup Docker have similar technologies.

But while these companies generally make their technologies compatible with one another, each business is marketing their own solution as the preferred way to build and run software.

And in addition to fighting each other on the technological front, the companies are also competing for talent. For example, just this week, Mesosphere hired away a high-profile engineer from Docker.

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Mesosphere executives did not say what the commercial relationships between Microsoft and HP Enterprise would entail, but revealed that more details will come later. Last summer, Microsoft was also rumored to have scouted Mesosphere for a possible acquisition, according to a report in The Information.

HP Enterprise has previously partnered with startups specializing in open source data center software. In these partnerships, HP Enterprise typically bundles its partner’s software together with its bare-bones (known as white-box) data center gear that it then sells to customers. Time will tell if a similar deal is on the horizon with Mesosphere.

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