Cloud-Device Startup Nebula Takes Aim at Seattle Engineers

12/13/11Follow @curtwoodward

It’s not just the Silicon Valley giants of technology who are moving into the Seattle area to raid technical talent from Microsoft, Amazon, and others. These days, you’re just as likely to see some well-financed startups wooing the big-company guys with promises of changing the world.

A prime example is Nebula, a cloud computing startup that has about half of its roughly 30-person staff in Seattle. As Xconomy’s Wade Roush wrote in this detailed profile of the company, Nebula is selling a smarter version of a networking switch, one that is integrated with the open-source cloud computing platform OpenStack. Specifically, the Nebula device contains a 10 gigabit Ethernet switch along with access to the OpenStack software platform—a combination the company is calling a “cloud controller.”

Nebula’s device, which is just now being tested by potential customers, will allow companies to cheaply build private cloud computing systems. Nebula’s device uses customized OpenStack software and works with inexpensive, commodity servers, including hardware from the Facebook-sponsored Open Compute Project.

Chris Kemp, Nebula CEO

It’s worth mentioning that Nebula’s CEO, Chris Kemp, is one of the co-founders of OpenStack. He helped get the project off the ground when he was the chief technology officer for IT at NASA, working out of its Ames Research Center in Mountain View, CA.

Kemp’s also no stranger to Seattle. He was a key employee at Classmates.com, and co-founded the vacation rental management startup Escapia before heading to NASA. Another veteran of Escapia and NASA, Devin Carlen, is a Nebula co-founder and its engineering vice president, based in the Seattle area.

When I visited Nebula’s temporary digs recently, Carlen and Kemp were in that tired-but-excited phase of developing a new company and getting the first versions of their product out to testing. Their conference room was peppered with notes and diagrams, piles of hardware, and the occasional wine bottle, as engineers worked intently in an office down the hall. The company’s current hiring plans will put it at about 50 people in the next six months or so, and a bit more than half of the team will probably be based in Palo Alto, CA. But “all the cool kids are in Seattle, of course,” Carlen says with a smile.

“Seattle’s actually been our secret weapon,” Kemp says. “We found it very difficult to bring folks on in the Bay Area. And, as it turns out, Amazon’s a great place to recruit from. Microsoft’s a great place to recruit from.”

Those hires include a pair that Nebula boasted about in a recent press release: principal engineer Tres Henry, a former lead in developing the Amazon Web Services Management Console; and Matt Gambardella, who previously worked for Microsoft designing search engine servers and infrastructure. Nebula also has gotten some talent from Disney, which has a branch in the area, Kemp says.

Nebula hasn’t disclosed how much money it has raised to make those hires, but its investors are a list of very well-known names: Kleiner Perkins Caufield & Byers and Highland Capital Partners, along with early Google investors Andy Bechtolsheim, David Cheriton, and Ram Shriram.

As someone who has been an entrepreneur in both the Puget Sound and Silicon Valley, it was interesting (though not surprising) to hear Kemp’s take on the difference between the two regions. He reinforces a theme you hear often: The Silicon Valley investors are far more willing to take risks than in buttoned-down Seattle.

“If my company were in Seattle, I would get on an airplane and I would talk to guys on Sand Hill Road. Because I can tell you, as somebody who’s talked to every VC in Seattle, was funded by one in Seattle, there is an epic difference. You might even invent a different term—you’d call what happens here something else, because it’s a very different creature,” Kemp says.

“Being able to take Silicon Valley’s money and hire engineers from Seattle seems to be a pretty good recipe,” he adds with a laugh.

Nebula’s current test partners include companies in biotech, finance, energy, and media. The company’s sales pitch is based on revealing just how little the components of big data storage and processing actually cost today. “We’re going to provide a new level of transparency and openness on how infrastructure is bought and sold,” Kemp says. “Like, why does a $50 hard disk cost $600 when you buy it on a Dell server?”

“They make all of their money on memory and hard drives, basically,” Carlen says.

The company is betting that this will resonate strongly as businesses produce ever-greater volumes of critical data, which they won’t want to store in someone else’s cloud-computing infrastructure. “Anybody who seriously competes with Amazon cannot seriously be beholden to Amazon, right? That’s just basic business arithmetic,” Kemp says.

At the same time, companies will be shutting down and shedding the kind of ancillary software—accounting, payroll, customer relations—that has long been run on-site, but is now moving to a software-as-a-service model.

Nebula bets that, in that scenario, smart companies will not want to overpay for “needlessly differentiated” proprietary cloud-computing systems that don’t play well with each other. By tying their device to the emerging open-source standard in OpenStack, and allowing it to integrate with several different kinds of commodity hardware, Nebula is aiming to make a device that drives down cost while working very simply—almost like a consumer electronics device.

“We have a whole bunch of our competitors helping people build 1990s cell phones,” Kemp says. “Nebula is building a sexy, beautiful iPhone that’s going to be simple to use, simple to operate, experience-focused. Plug and play—it’s just going to work.”

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

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