Microsoft tried to buy Mesosphere, a hot cloud-computing startup, for as much as $150 million, but Mesosphere turned them down, reports The Information.
Rumors of a Microsoft-Mesosphere deal surfaced over the summer when it came out that the tech giant was interested in Mesosphere’s technology for managing the growing market for running data centers at super-high efficiency.
Apparently, the deal fell apart when Mesosphere wanted more than the $150 million that Microsoft was willing to offer but couldn’t find another bidder willing to pay its desired price of $200 million, according to the report.
Of note is that Microsoft’s reported $150 million offer is significantly lower than the $1 billion valuation that Mesosphere was said to have given itself during those original talks.
Instead, Microsoft and Mesosphere will continue their technology partnership, which integrates Mesosphere’s flagship Data Center Operating System product with the Microsoft Azure cloud.
DCOS is a commercial version of an increasingly popular free and open-source project called Mesos that’s used by developers. Mesosphere founder Ben Hindman created Mesos while at UC Berkeley. Hindman and the other Mesosphere founders brought Mesos into Twitter. Then cofounder Florian Leibert, who previously worked at Twitter, brought it to Airbnb.
Mesosphere has benefited from the rising tide of “software containers,” a technology that’s trendy with developers for helping them write code once and run it anywhere, on any server infrastructure.
The hottest container software comes from a $1 billion startup called Docker. But Mesosphere’s product helps manage and maintain all of those containers at huge scales, fitting in nicely with Microsoft’s newfound love for containers.
Thanks to this confluence of trends, Mesosphere has raised $49 million in three rounds, from VCs like Khosla Ventures, Andreessen Horowitz, Data Collective, and other big names. The Information report says that Mesosphere is fundraising after a collapsed deal.
Microsoft declined to comment for this story. We’ve reached out to Mesosphere and will update the story if we hear back.