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VMware Invests $30 Million In Puppet Labs

Today I’m excited to announce that Puppet Labs and VMware have formed a new strategic partnership, after more than a year of working closely together from VMware’s initial investment in our company. This partnership involves VMware investing $30 million in Puppet Labs, as well as a commercial agreement to jointly deliver, market, and sell great products built for our mutual customers. See the official press release for more information. Our shared goal in this relationship is to help IT organizations better manage and automate their infrastructure. Modern IT infrastructure is at a scale we’ve never seen before, yet our customers also have to move faster than ever, and they need to do it all while maintaining the same standards in security, compliance and uptime. Virtualization and cloud technologies, such as those from VMware, are exactly what have enabled these new opportunities, and automation software like Puppet is needed to fully realize them.

Software *IS* Eating The World

When I announced in 2011 that VMware, Cisco and Google Ventures had joined our roster of investors, I discussed the fact that we were in transition from the hype of the cloud to companies drawing out the key cloud features and deploying them internally. As Marc Andreessen said, software is eating the world, and the software-defined data center (SDDC) is how that shows up in infrastructure. For example, VMware acquired Nicira to help enable software management far beyond the systems world, and Puppet Labs worked with EMC to deliver Razor, a bare metal provisioning solution that feels more like cloud provisioning. It is not just the technology that’s changing, though; the change in enterprise IT is fundamental. DevOps is changing how we deliver and maintain critical services, and especially how development and IT teams work together. Also, software is bought differently than it was a decade ago. It used to be standard to have a salesperson come on site, and to take 6-12 months to decide on and implement a new solution. It’s no longer acceptable to have confidential user guides, to conceal from your customers what your software does until they’ve already bought it, and people want to see success in weeks, not years. We think all of these changes - cloud, DevOps, and the consumerization of IT - pose major challenges to the IT management software incumbents, but they are the Puppet Labs’ sweet spot. Fundamentally, this new partnership is about enabling Puppet Labs to continue growing, to keep us in the best position to fill the gap left by the lack of adaptation by the incumbents.

A Fantastic 2012

Today’s announcement continues the great momentum we’ve seen in the 15 months since we announced our Series C round. For example...
  • Product Innovation. Last year saw the 3.0 release of Puppet, our open source product; the first release PuppetDB; the first release of Razor, our bare metal provisioning tool; two releases of Puppet Enterprise, our commercial product; a major update to Puppet Forge, our online content marketplace; and collaborative integrations with OpenStack and Google Compute Engine.
  • Community Engagement. PuppetConf 2012, our annual user conference, had more than 3,000 virtual and on-site attendees; from two Puppet Camps in 2011, in 2012 we grew to 16 worldwide; our recent survey on the state of DevOps elicited participation from more than 4,000 community members; contributed modules on Puppet Forge surged from 200 to now more than 750.
  • Market Adoption. Our products have seen more than 3.5 million product downloads in the last 12 months; Puppet Forge experienced more than 450% growth in downloads since last February; and we’ve been fortunate to grow to more than 700 paying customers.
...and there’s still a lot left to do.

What's Next?

With these new funds we will double-down on product, investing more than we could from organic growth alone. In the IT management stack, there are spaces above and beside us where we're already seeing lots of opportunity. We'll also use these funds for the product interoperability and integration work with VMware (check-out an on-demand webinar showcasing the product interoperability for more). And from a marketing and sales standpoint, there are new countries, continents, and customer segments that’ll be receiving attention sooner than we could otherwise. Looking further out, it’s clear that the disruptive nature of virtualization and cloud, DevOps, and the consumerization of IT create the need for a new, stand-alone IT management company with a different approach. It’s an approach that empowers great people rather than boxing them in, enables rapid change versus gating it, that aligns IT with business goals, that makes great IT operations a competitive advantage. With a tailwind of an engaged and growing community, innovative products, $46 million in total capital raised, and best of all, lots of delighted, paying customers, we will be that company. At the risk of repeating myself, I’ll wrap-up with another round of thank-yous. To our customers and community, for your trust and engagement. To our employees, for the smarts and passion you bring to work every day. To our investors and partners who have joined arms with us on this journey. And to VMware, for the opportunity to expand our relationship and together build great, innovative products that completely transform IT operations. Thanks to you all, and I look forward to working further with you in 2013. - Luke

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