This ex-Rackspace director's startup Gravitational just raised $25 million to 'liberate' customers from Amazon Web Services and Microsoft (AMZN, MSFT)

Business Insider Technology 3 weeks ago

Just as cloud computing companies Amazon Web Services and Microsoft explore new ways to keep customers from going to their rivals, a startup founded by a former Rackspace director is working to make it easier for developers to move applications between clouds.

Gravitational – which just raised $25 million in a Series A funding round led by Kleiner Perkins – wants to "liberate" customers from major cloud providers. The Oakland-based company helps customers package their applications into a single "file" that can be "dragged and dropped" across cloud providers or in a company's own data centers.

The result is they no longer have to be "super-glued" to one cloud, said Gravitational CEO and cofounder Ev Kontsevoy.

"The world doesn't want a single cloud provider," he said.

Kontsevoy's first cloud company, Mailgun, ultimately got acquired by Rackspace in 2012. He worked as Rackspace's director of product and strategy until he left in 2015 and started Gravitational.

Gravitational has 26 employees across offices in Oakland, Seattle and Toronto. Seed investors include YCombinator, S28 Capital, and SV Angel. Its customers include Samsung, NASDAQ and Tickermaster, according to the company. Gravitational declined to reveal its revenue, but said that it's profitable.

How it works

Cloud providers like AWS and Microsoft spend massive amounts of money to invest in cloud infrastructure by buying up servers and data centers. To lock customer's applications into that infrastructure and make it more appealing, they add layers of services so that developers can simply drop code on top and run their application.

Kontsevoy said these middle layers introduce complexity that ties customers to a particular cloud provider and "super-glues" an app to that infrastructure. If your app reliant on an Amazon-specific database product, or a Microsoft-made AI system, it just makes it that much harder to move clouds, after all. That, in turn, makes it harder to shop around for a better deal on your cloud bill, or to simply move providers because you want or need to.

"What's wrong here is your app gets deployed on top – it's just the icing on the cake," he said. "That's what we believe is the root of the problem. Once the app is on top of this layer [companies get stuck], and in the cloud world today, it's just the way for [cloud providers] to protect their moat."

Gravitational uses the open source Kubernetes software for that middle layer, rather than anything that is tied to a particular cloud provider. Kubernetes, started at Google, has since grown to become something of a standard in the cloud computing industry — opening the door for Gravitational's spin on the tech to work with all cloud providers.

Cloud wars intensify

Competition in the cloud computing market is intensifying. While Amazon Web Services still has the biggest market share, longtime runner-up Microsoft has gained traction recently, including winning JEDI, a $10 billion cloud computing contract with the Pentagon for which Amazon was considered a shoo-in.

As that competition heats up, major cloud providers are exploring new ways to keep customers from going to their rivals. Amazon Web Services introduced a new discount model to make it easier for customers to save money — while simultaneously making it harder for them to switch to a competitor's service.

At the same time, cloud companies have been forced to make it possible for customers to use rival cloud computing platforms. Microsoft, for example, recently announced Azure Arc, which allows users to run its security, governance, and data services on its Azure cloud, private data centers, or rival clouds like AWS and Google Cloud.

Experts say cloud providers like Microsoft essentially don't have a choice but to let customers use other clouds because that's what customers want.

"Long-term, [major cloud providers] probably will hate it," Kontsevoy said. "It allows anyone to migrate out of their cloud, out of their data centers and prevents them from gaining the ultimate monopoly they probably all want to become."

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