Former Avanade Chief Takes the Helm at Cloud-Services Startup Opscode

8/9/11Follow @curtwoodward

Opscode, a young Seattle company that sells cloud-computing management services, has added some executive firepower to help manage its growth—co-founder Jesse Robbins is handing over chief executive duties to Mitch Hill, founding CEO of tech-services company Avanade.

Robbins, an Amazon.com veteran, is staying on board as chief community officer to guide work on Chef, Opscode’s open-source IT management software. And no, Robbins says, this isn’t one of those entrepreneur nightmares where the investors and board members jam a new executive down the founders’ throats.

“I’m sleeping better at night, to be honest,” Robbins says. “It’s been pretty awesome.”

Opscode makes it easier for companies to add cloud computing power by automating a lot of related tasks. Say your company wants to add more computing power—with big vendors like Amazon Web Services and Rackspace, that’s pretty easy. But someone still has to make sure all of those fancy new servers work with your existing computer systems. In the past, that could have meant a lot of tedious coding.

Service providers like Opscode speed up the process by giving IT pros a standard way of plugging cloud computing power into their systems. They’re not the only ones in the field, but Opscode bases its offerings around the customizable, open-source Chef software that it developed.

How does that make money? Opscode sells a hosted service based around the Chef software. It’s also introduced “Private Chef,” which targets companies that need to make sure their information stays on a private network. The hunger for more of those premium services, just a few months after they were introduced, is what drove the Opscode team to look for a more seasoned IT executive.

When the Hosted Chef service became available, Robbins says, Opscode figured their medium and large business customers would buy a certain amount of service, and add slowly after the initial spike. Instead, he says, it “spread almost instantly in those companies,” leaving the small startup sprinting to keep up.

“If I could set my wayback machine to a year ago, we would have staffed up faster to meet that enterprise demand so we could deal with those customers,” Robbins says.

Enter Hill, who has seen this story play out before. “I’ve been working in IT for over 30 years,” he says. “We go through these cycles where we scale up and we scale out, and every time we scale out, we create a huge management problem.”

The match was initially sparked by Bill Bryant of Draper Fisher Jurvetson, a member of the startup’s board. Hill took some time off after stepping down from Avanade in 2008, and started exploring a new career advising startups in the region during 2009 and 2010. That’s how he got introduced to Opscode. But Hill says he eventually realized that he was better as an operations guy than as an early stage investor-type.

Separately, Opscode had begun looking for a more experienced executive to help it manage what looked like big growth with enterprise customers. As they searched for a new CEO, they were increasingly getting familiar with Hill.

“Because Mitch and I spent so long getting to know each other, we’ve had plenty of time to work out the concerns and questions that I think every founder goes through in this transition,” Robbins says. “You start off with a high degree of anxiety and are concerned that maybe the incoming CEO will take things in a diff direction than you. In our case … every one of those concerns has turned around into, ‘Man— I really want him taking that over.’”

Opscode has raised about $13.5 million over its lifetime, from investors including DFJ and Battery Ventures. Hill says Opscode isn’t looking to raise money for the near future, and is more focused on its Private Chef service, which was introduced a couple of months ago and is being shipped to early customers now. Opscode wouldn’t say anything about its revenue figures, but says it sees lots more growth ahead—and like many, it’s hiring, both in Seattle and in a satellite office in Raleigh, NC.

“We think that by the end of this year, we’ll be spending a large amount of time implementing Private Chef to enterprise customers,” Hill says. “For a company that really just started seeing revenue form the hosted platform a year ago, the trajectory from here looks really good.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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