Enterprise

Why Microsoft might buy a two-year-old startup called Mesosphere for as much as $1 billion

Read in app
Satya Nadella
Microsoft CEO Satya Nadella speaks at a Microsoft event in San Francisco, California March 27, 2014.   Reuters/Robert Galbraith

There's a hot new market in the cloud computing world called "containers" and one of the startups making hay is called Mesosphere, founded about two-years ago by former Twitter and Airbnb engineers.

Mesosphere has reportedly caught Microsoft's attention and the software giant has been trying to buy the startup, reports The Information's Amir Efrati.

Mesosphere believes it's worth $1 billion, Efrati reports.

Whether Microsoft bites for that price is questionable, but the company may not be the only one that wants to sniff around Mesosphere. Mesosphere reportedly hired famed Valley deal maker Qatalyst Partners, which could suggests Mesosphere is trying to trigger a bidding war. (We reached out to Qatalyst and asked, we'll update when we hear back.)

In truth, Mesosphere would be valuable to any number of huge tech companies who are trying to build out their cloud computing services: Google, Amazon, IBM, Rackspace, Cisco, Oracle and the list goes on.

Mesosphere offers what it calls a Data Center Operating System (DCOS). It's a commercial version of an increasingly popular free-and-open source project called Mesos that's used by developers. Mesosphere founder Ben Hindman created Mesos while at UC Berkley. Hindman and the other Mesosphere founders brought Mesos into Twitter. Then co-founder Florian Leibert, who previously worked at Twitter, brought it to Airbnb.

benjamin hindman apache mesos mesosphere
YouTube

When developers write apps today, they use something called a container, the most famous one is from a hot startup called Docker. A container lets them easily configure all the settings they'll need for running their app and then they can just toss the app from their development computer to a container in the cloud and the app will run fine.

But once you have thousands or hundreds of thousands of apps running inside their personal containers, how do you manage them all? That's what Mesos and DOCS does.

And for Microsoft, who has banked its future on bringing its massive cadre of Windows developers to its cloud, Azure, a technology like that is tantalizing. Maybe even $1 billion-worth of temptation.

Mesosphere, which declined comment on this story, has raised $49 million in three rounds from VCs like Khosla Ventures, Andreessen Horowitz, Data Collective, and other big names.

Microsoft also had no comment.

Read next

Julie Bort was Business Insider's Editor at Large for the Tech team. She loves investigating stories and shedding light on the tech industry's most amazing people.Here's a small sample of some of Julie's work.Former Pinterest employees describe a traumatic workplace where managers humiliate employees until they cry, Black people feel alienated, and the toxic culture 'eats away at your soul'Sex, tequila, and a tiger: Employees inside Adam Neumann's WeWork talk about the nonstop party to attain a $100 billion dream and the messy reality that tanked itInsiders say WeWork's IT is a patchwork of cheap devices and Band-Aid fixes that will take millions to fixWeWork's toxic phone booths were created in-house by its Powered by We business70-hour weeks and 'WTF' emails: 42 employees reveal the frenzy of working at Tesla under the 'cult' of Elon MuskElon Musk works so many hours at Tesla, employees are constantly finding him asleep under tables and desksHow this woman went from a Pizza Hut employee to a founder of a $4 billion startupAn Oracle insider explains how some salespeople gamed the system to sell more cloudTHE TAKEDOWN OF TRAVIS KALANICK: The untold story of Uber's infighting, backstabbing, and multimillion-dollar exit packagesMicrosoft is in talks to buy GitHub, a startup at the center of the software world last valued at $2 billionThe alarming inside story of a failed Google acquisition, and an employee who was hospitalizedInside Facebook's plan to eat another $350 billion IT marketHow a registered sex offender wound up living in an Airbnb hosting unsuspecting guestsA controversial ex-banker is the person who really runs Twitter — and he's gambling the company's future on one risky betSecret passages and skipped meals: Oracle's CEO gave us a rare peek at what it really takes to run a $37 billion companyHP told some employees to choose between becoming contractors with no benefits or being fired without severance'I felt like we were being extorted': Customer says Oracle tried to strong-arm him into a cloud saleHow the queen of Silicon Valley is helping Google go after Amazon's most profitable businessAirbnb host: A guest is squatting in my condo and I can't get him to leaveLIES, BOOZE, AND BILLIONS: How one of the fastest-growing startups in Silicon Valley history raised $580 million then spiraled out of controlGitHub is undergoing a full-blown overhaul as execs and employees depart — and we have the full inside storyWhen she's not writing for Business Insider, Julie can usually be found on the trails, on my mountain bike, or on my skis, if you know where to look.