Opscode Expands Overseas as Enterprise Cloud Software Biz Grows
Opscode, a Seattle startup that offers cloud-computing software and services for businesses, is putting some of its recent venture cash to use with expansions in Europe and Asia.
The new European office—which starts with just one London-based employee—will focus on sales and fostering the open-source community participating in Chef, the software system that Opscode created for managing IT resources.
In Japan, Opscode is partnering with another company that will distribute its software and support the open-source community.
Opscode already has seen its service start to catch on overseas, with Europe accounting for about a quarter of the registered users in its open-source community and about 50 paying customers. “We do have a pretty good-sized commercial footprint over there already,” marketing vice president Jay Wampold says.
The company, founded by cloud-computing veterans and headed by CEO Mitch Hill, raised $19.5 million this spring from Ignition Parters, Battery Ventures, and Draper Fisher Jurvetson. The company has doubled its employee count in Seattle since this spring, now counting about 70 people.
Opscode’s software helps businesses manage the array of IT resources at their fingertips—and these days, those resources are growing rapidly.
Providers like Amazon Web Services, Rackspace, and Microsoft offer a wide array of new online computing services and space for rent on their servers, which can offer savings to businesses that don’t want to pay for big piles of computer hardware. That’s a big change from the older days of business computing, when a few huge vendors once dominated the market with suites of end-to-end services.
Bigger companies in particular, however, don’t want to send their most critical information and data outside of their own server networks. But they might use outside cloud-computing resources for day-to-day computing tasks.
And all the while, the amount of data that companies of all sizes need to handle continues to grow, requiring more and more computing power.
Software from providers like Opscode allows IT professionals to set up their cloud-computing resources—and change them more or less on the fly—with a ton of different options. In the past, that may have meant spending a lot of time writing tedious code to make all of those diffuse computing resources communicate effectively with each other.
Opscode makes money on its service by charging for a premium product, called Hosted Chef. Last year, the company made a bigger play for the enterprise by introducing Private Chef, a customizable version of the software that plays to those big-business IT managers who need to keep their critical data within a corporate firewall.
Since the beginning of the year, Wampold says, Opscode has seen its customer base roughly double— and more than half of its enterprise customers buying the Private Chef service are large, Fortune 500 businesses.
Opscode won’t discuss specific financial performance, but the introduction of the enterprise product at the end of last year has grown Opscode’s revenue stream pretty quickly, Wampold says.
“And because you’re typically selling six-figure-plus deals into the enterprise, it was a huge spike in our revenue,” Wampold says. “The Hosted Chef business was doing very well, but the selling price of those deals were relatively small.”