Episode 42: Opsware (with special guest Michel Feaster)

**Ben Gilbert** (0:00)
So, we also grade acquisitions. David and I will each give it a grade, and our guests can opt to either grade or not, especially since you were part of it.

**Michel Feaster** (0:09)
I'm happy to grade.

**Ben Gilbert** (0:10)
Yeah, all right. Welcome back to episode 42 of Acquired, a podcast about technology acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:29)
I'm David Rosenthal.

**Ben Gilbert** (0:30)
And we are your hosts. Today we are covering the 2007 acquisition of Opsware by HP. We have with us a fantastic guest, Michel Feaster. So David will give Michelle's full bio in a minute, but I want to say I'm personally very, very excited to have Michel with us. A lot of people know the story of the deal from the Opsware side, as told in Ben Horowitz's The Hard Thing about Hard Things. So Michel was the Director of Products for the division that purchased Opsware, and is going to share the story from the HP side of that acquisition today. So David, can you tell us a little bit about Michelle's background?

**David Rosenthal** (1:07)
Yeah, so Michel today is the co-founder and CEO of UserMind, which is a unified customer engagement hub based in Seattle and that she founded in 2013 But as Ben was alluding to, a decade ago before UserMind, Michel was working at the opposite end of the tech spectrum from a startup. She was the Director of Product for a division of Hewlett Packard's Enterprise Software Business, where she led the acquisition of Ben Horowitz and Marc Andreessen's legendary company Opsware for $1.6 billion. And most fun flash forward to today, and the tables have turned. Ben Horowitz is now on her board at Usermind on behalf of Andreessen Horowitz, his venture capital firm. And we are honored to have Michel on the show to cover this deal. So thank you for joining us.

**Michel Feaster** (1:59)
Thanks for having me, guys. Really excited.

**Ben Gilbert** (2:01)
Yeah, we appreciate it. Appreciate it. So before we dive in, we want to mention to new listeners of the show, we've got a Slack, and we are over 800 strong. That is at acquired.fm. On the sidebar, you can join us in the Slack and talk all things M&A, tech news, and anytime there's something pretty exciting that happens, like the whole food acquisitions, that's when it really shines and there's lots of great speculation in there. Second is we love reviews. So you can help us grow the show by leaving a review on iTunes, or I'm sorry, on Apple Podcasts, that's what we call it now, and tell your friends. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (2:43)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. Because Crusoe's cloud is purpose-built for AI and run on wasted, stranded, or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (3:09)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (3:14)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, et cetera, and uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (3:33)
Obviously, it's a huge benefit for the environment and for customers on costs since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (3:49)
It's super cool that they can put their data centers out there in these remote locations where quote-unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure, who need to build their data centers close to major traffic hubs where the internet happens because they are doing everything in their clouds.

**Ben Gilbert** (4:05)
Yep. If you, your company, or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusocloud.com/acquired, that's C-R-U-S-O-E cloud.com/acquired, or click the link in the show notes. David, do you want to take us through the acquisition history and facts?

**David Rosenthal** (4:26)
Yeah, as always. As Ben eluded to, we're going to try and focus mostly on the HP side of the story with Michel because much ink has been spilled about the Opsware side. If you haven't heard about Opsware, we totally recommend reading The Hard Thing about Hard Things by Ben. It is such a great book. There's also a really great period piece that Wired did in August 2000, right before the Tech Bubble Burst, all about the company and about Ben and Marc Andreessen, and this being Marc's second act after Netscape. We'll link to that in the show notes. That provides a really good full history of Opsware. To set the stage, I'm going to take five minutes and do a quick, truncated history just so we're all on the same page and can then dive in with Michel about how HP viewed things.