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Summary:

Joyent will use the cash to fund expansion of its cloud services and take on Amazon, the behemoth in that space. The company hosts its own public cloud services and sells infrastructure that customers use to field their own public or private cloud services.

David Young headshot

Updated: Joyent has netted $85 million in new venture funding to fuel a global expansion of its cloud services. Most of the new money comes from Weather Investment II Group and Accelero Capital, but Telefonica Digital is also investing. Existing Joyent backers include Intel Capital, Epic Ventures, Liberty Global, Greycroft Partners and El Dorado Ventures.

San Francisco-based Joyent fields public cloud services itself but also sells cloud technology to businesses wanting to run their own public or private clouds. This financing round will help the company push that dual cloud strategy harder and take on Amazon Web Services, the giant public cloud service provider.

“We will expand our public cloud service globally in conjunction with Telefonica…. The strategy is to compete with AWS by finding key partners globally — sort of a Star Alliance for cloud computing,” Joyent CEO David Young (pictured) said in an interview.

Joyent, founded in 2004, did not take on venture funding until 2009, when Intel Capital ponied up $8.5 million. Since then, including this $85 million round, it has scored an estimated $115 million in VC money.

The company is now in investment mode, Young said, with plans to staff up its software effort so it can better sell its cloud-enabling technology around the world. “We are unique in that we have our public cloud services and we also bundle our software so other people can build their own private clouds or stand up their own public clouds [with it],” Young said.

That deployment choice differentiates Joyent from public cloud juggernaut Amazon, which runs customer’s technology in its own data centers.

Competing with Amazon is no mean feat; the company rolls out new cloud capabilities continuously. Last week alone, it announced a new NoSQL database service, new single sign-on for the AWS Management Console, and free Windows EC2 micro instances. But Young said Amazon’s fluidity is also its weakness — especially for conservative corporate customers that worry about stability and reliability.

“AWS throws a log of spaghetti against the wall. We innovate starting with our [SmartOS] operating system, hardware designs and how it all fits together, we haven’t pulled a lot of stuff out of Linux or Xen and duct-taped it together. That’s one reason AWS has had a lot of problems with uptime,” he said, citing high-profile AWS outages last year, including one four-day snafu in April.

Joyent also competes with emerging OpenStack-based cloud offerings but Young said Joyent compares favorably against them because of its multi-tenancy smarts. Multi-tenancy allows a cloud infrastructure to run many applications on shared infrastructure securely.

Young said Joyent pairs an open-source mindview with enterprise-class multi-tenancy and support.

“Our operating system and Node.js [server-based JavaScript framework] are open source, but people who understand the demands of the cloud know that your solution has to be competent with multi-tenancy. The feedback is that OpenStack, which is built on old-style hypervisor technologies, is not set up for that sort of multi-tenancy,” Young said.

Joyent has a compelling story on deployment choice and some impressive customers including Uniserve, a Canadian cloud service provider; MyTech,  MiTAC,  a Taiwanese hardware maker; and FirstServer, a Japanese web services company. But taking on Amazon and a growing raft of OpenStack offerings from companies ranging from Internap to Dell to Hewlett-Packard means the competitive landscape will get more difficult.

  1. it’s not “MyTech”, it’s “MiTac”

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    1. apologies. fixing now

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  2. Congratulations David Young, Jason Hoffman, and rest of the Joyent team! This funding is a well deserved reflection of the excellent services, products, and open source projects that you do!

    I am concerned though by your statements, Mr Young, about OpenStack — actually I’m not comfortable with your characterizations of AWS being duct-taped together either — anyway, OpenStack has proven enterprise-class multi-tenancy.

    For our own Cloud OS product called pentOS built on OpenStack, we use the same hypervisor, KVM, that Joyent finished porting to Solaris this past summer, and which they use in production for their Public Cloud.

    If there was at one time meat on Mr. Young’s statement, the OpenStack community, comprised of over 145 companies, many of them the top enterprises in the world, have already addressed it.

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  3. Mudslinging and negative campaigning works for politicians why not for Joyent? Fact check the statement about the AWS outage and you find that it was caused by personnel misconfiguring their storage network and creating a data storm. “AWS throwing spaghetti against the wall” wow, what a great technical description… Come on guys, spend some time talking about the virtues of your system. Leave the trash talking to the NFL and politicians

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