Opsware

» see opsware.com as it lived, on the wayback machine

~ the eulogy ~

Loudcloud is a name most people meet backwards. You learn who Marc Andreessen and Ben Horowitz are from the venture firm with both their surnames on the door, and only afterwards find out that in between Netscape and that firm there was a company which sold hosting by the month and very nearly died doing it. i met it in that order too, years late, long after the name had stopped existing.

It was founded on 9 september 1999, a date the founders picked for looking like 9/9/99. Andreessen came from Netscape and Horowitz from AOL, and they brought Tim Howes, who co-invented LDAP, and In Sik Rhee, who had built the Kiva application server. The first round was $68 million from Benchmark Capital with Morgan Stanley Dean Witter alongside. A second round of $120 million closed in july 2000 and was described at the time as the largest second round anybody had raised.

The offer was simple and it was ten years early. You write the application; we own the racks and the people who get paged at three in the morning. You pay monthly. Customers were the sort of company that existed in 2000 and mostly does not now, names like HomeGain and Acteva. The company called what it sold a cloud, in its own name, in 1999. Nobody else would use that word in this sense for most of another decade.

~ the dossier ~

~ the cloud before the word ~

What made Loudcloud different from the hosting companies around it was that it refused to do the work by hand. Running a customer's servers meant provisioning machines and then keeping their configuration from drifting, and everyone else in that business did that work with people. Loudcloud wrote software to do them and called it the Opsware System. The service was the wrapper; the automation was the actual invention.

That is why the company survives at all in the record. A managed hosting provider from 1999 would be a footnote. A managed hosting provider that accidentally built the first serious datacenter automation product is a company that gets bought for over a billion dollars by Hewlett-Packard eight years later, having thrown away everything else it owned to get there.

~ the six dollar ipo ~

Loudcloud went public on 9 march 2001. It offered 25 million shares at six dollars and raised $150 million. The timing could not have been worse and the pricing said so plainly, because this was a company that private investors had valued far above what the public would now pay. Revenue for the fiscal year ending 31 january 2001 was $15.5 million against a burn rate that made that number look decorative.

Then the customers began to disappear, in the literal sense that the dot-coms buying managed hosting stopped being companies. In may 2001 Loudcloud laid off 133 people, about nineteen percent of the staff. Quarterly revenue crawled from $11.7 million to $14.3 million over the rest of the year and then stopped moving, which is a business neither dying nor working. The stock spent 2001 and most of 2002 below the offer price.

~ the pivot ~

The way out was to sell the company and keep the software. In the summer of 2002 EDS bought the hosting and managed services operation for $63.5 million in cash, hired around 140 Loudcloud staff, and committed to license at least $52 million of software over three years. What remained changed its name to Opsware and went to market as a software vendor with one product and one guaranteed customer.

It then bought its way into a category. Tangram Enterprise Solutions came in december 2003 for asset management, and Rendition Networks was announced in december 2004 and closed on 3 february 2005 to add network device configuration. Storage provisioning arrived with CreekPath in july 2006, run book automation with iConclude in march 2007. Each purchase filled a hole in a suite that was trying to automate an entire datacenter rather than just the servers in it.

~ what replaced it ~

HP announced the purchase in july 2007 at $14.25 a share, $1.65 billion in cash, and closed it on 21 september 2007. It was HP's third largest acquisition to that point, behind only Compaq and Mercury Interactive. The Opsware name went out of use almost immediately and the products became HP Server Automation and HP Network Automation.

The code then traveled further than the company ever did. HP's software business was spun out into Hewlett Packard Enterprise in 2015 and sold on to Micro Focus in 2017, and OpenText bought Micro Focus in 2023. Server Automation still ships inside an OpenText suite, under its fourth owner, a quarter century on from the problem it was written to solve. The near death of the company is the spine of the management book Ben Horowitz later wrote, and the firm those two founded afterwards funded a great deal of what came next. Loudcloud is remembered as the thing that happened before all of that, which is unfair to a company that was describing cloud computing accurately while everybody else was still selling rack space.

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