Defying Skeptics, MinIO’s Measured Growth to Open Source Success

“Besides making it much cheaper to experiment, do research and even fail at starting a new company, the cloud is what is enabling the so-called Internet of Things, with billions of sensors measuring huge amounts of data and shaping the performance of connected objects,” wrote The New York Times in a 2014 article titled, “The Era of the Cloud.” That year, Amazon Web Services (AWS)—which annually shared its total number of objects stored in its public cloud—reached two trillion objects stored, more than doubling the previous year’s mark.

Investors, including Deepak Jeevankumar, watched as the cloud’s hockey stick growth rapidly reshaped IT infrastructure—knowing that sweeping change often offered investment opportunities.

“We saw cloud computing propelling two major shifts. One was in enterprise infrastructure, which AWS was leading with S3 and EC2. The other influenced developers, who were increasingly using open source to build new technologies,” said Jeevankumar, now a managing director on the Dell Technologies Capital team.

Aiming to find thought leaders in the space, Jeevankumar learned of Anand Babu (AB) Periasamy. “Not only did AB know how developers think, work, and act—he created a lot of fundamental technologies for the cloud.” And he had a successful exit under his belt. Periasamy had sold Gluster, an open-source, unstructured data management company, to Red Hat for $136 million in 2011.

Jeevankumar met Periasamy and the courtship with him and Garima Kapoor, Periasamy’s eventual co-founder, would last over a series of lunches at Il Fornaio in Palo Alto. There, the three would talk about the state of the enterprise market, its foreseeable growth of data, and their dreams for innovations. They weren’t always aligned.

Periasamy had set his sights on starting a bionic company around neural nets and virtual reality, another hot sector at the time. “I actually blame Garima and Deepak for pulling me into this,” jokes Periasamy today. Together, Kapoor and Jeevankumar focused conversations on the very visible problem within GitHub repositories: developers were seeking affordable alternatives to Amazon S3 and EC2.

And soon, MinIO, an open-source object storage database built to run in public or private cloud environments, was born. Over the next eight years, the company would ride that hockey stick growth to become the de facto open-source object storage database. Today, the company services over 50% of the Fortune 500, including all top 10 US banks, nine of the top 10 automotive companies, and eight of the top 10 US retailers.

Over the next eight years, the company would ride that hockey stick growth to become the de facto open-source object storage database.

Market Headwinds

Like most good ideas, the initial vision wasn’t clear to everyone. Many in the media and investment community questioned MinIO’s decision to build the product to work with the very giant they hoped to unseat.

“(It’s a) plan to become the neutral object storage layer, while still maintaining Amazon S3 object storage compatibility,” Ron Miller of TechCrunch wrote after the announcement of MinIO’s Series A funding. “That may seem like an odd strategy but as [Periasamy] points out, there is a clear market need.”

He and Kapoor, who is now COO at MinIO, were playing a longer game: businesses would continue to expand their object storage needs/capabilities if provided a tool and the right layers of control.

“We saw a world where it’s about data for the business and data at scale,” Periasamy says today. “The problem was not whether customers bought a Supermicro server or a Dell server or they bought EC2 instances on Amazon—it didn’t really matter. What mattered—to us—was that we enable customers to be in control of the data and the technology.”

“Some investors were concerned about the object storage opportunity, others thought perhaps the value had been accounted for,” Kapoor says. “It turns out the market was larger than even we forecasted and that very little of the value had been accounted for, they just couldn’t see it.”

Finding Space in the Cloud

“Developers don’t want to be sold to. They want to learn and make decisions on their own.

With Gluster, Periasamy had learned building an open-sourced community was predicated upon trust. From inception, he and Kapoor aligned on building a culture and product with full transparency.

As they raised capital, Perisamy and Kapoor were honest about their plan to commercialize MinIO. “Most founders want to get revenue as soon as possible,” Jeevankumar says now. “But AB said, ‘I only want to work with investors who help me build a very active community first, who don’t care about revenue in the short term. It might take a year. It might take four years. It might take five years. But, we will get there.’ And he was right.”

Later, Periasamy and Kapoor decided MinIO would not have a sales team—an unheard-of strategy for an enterprise software company. “Developers don’t want to be sold to. They want to learn and make decisions on their own,” said Periasamy reflecting on their choice.

“The buyer had changed quite a bit,” Kapoor says of the increasing trend of engineering teams dictating a company’s technology purchases. “In the enterprise world, it was rare  to find published prices online. Buyers would go through all kinds of hoops to finally engage with a vendor. We were one of the first to publish our plans. We were very transparent to the end user so there is no confusion between street price and what they end up paying. We wanted complete transparency.”

The move also helped the company save an enormous amount on staffing salaries. Periasamy and Kapoor were not only proving that they could capitalize on a hole in the cloud computing market but that they could run a company efficiently. “They had built a very compelling product with less than $3 million spent,” Jeevankumar says. “It would have normally taken $30 million to build a product like that.”

“They had built a very compelling product with less than $3 million spent,” Jeevankumar says. “It would have normally taken $30 million to build a product like that.”

Positioned for the Future

In January 2022, the company officially became a billion-dollar “unicorn” when it raised a Series B of $103 million. As ZDNet noted, MinIO’s bet to become a de facto open-source object storage company, when AWS had seemingly locked up the market, had finally paid off.

Now Kapoor says the company is focused on making the next eight years as full of growth as the first.

“With large language models and AI, data is going to keep growing at an exponential rate,” she says. “A lot of people in our space are still asking about the enterprise-ready applications in that space that will deliver value. To the end customers, there’s a lot of excitement and getting to that enterprise-level application, that’s where the future’s going.”