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Jesse Proudman
Jesse Proudman

Before IBM swooped in to buy Blue Box, the Seattle cloud computing startup entertained at least one other offer. Blue Box founder Jesse Proudman didn’t say who came knocking on the door, but once Big Blue arrived, he knew it was the right fit.

“We explored a number of options, and for us the question was: What organization had the breadth and sheer vision around our technology offering and how we should bring it to market,” said Proudman in an interview with GeekWire today. “As we got deeper in the conversation with IBM, it was a no-brainer that they were the obvious winner.”

The reason?

Proudman said that IBM has a well-defined cloud strategy, one which will help accelerate the Blue Box business model and technology platform.

Here’s more from our interview with Proudman who founded Blue Box 12 years ago as a Web site hosting company and raised $22 million in venture funding starting in October 2012.

It has been a 12-year voyage for you at Blue Box. Why sell out now? “I think it is a pretty negative connotation with the term selling out. The way I have always viewed building a business is that it is about resources, and reach. And I bootstrapped the company for 9 years and I had limited resources. And I raised venture capital, and had more resources…. And, so, to me, an acquisition is an opportunity to take the resources and reach of a much larger global entity and use that to build out the vision and the company. At the same time, it is a nice liquidity event along the way.”

Blue Box founder Jesse Proudman, winner of the 2014 Young Entrepreneur of the Year at the GeekWire Awards.
Blue Box founder Jesse Proudman, winner of the 2014 Young Entrepreneur of the Year at the GeekWire Awards.

What will IBM’s footprint look like in Seattle? “As with any acquisition, a lot of the concrete details will evolve over time.  But Blue Blox will be treated as the private cloud kernel, and we will be growing significantly around the team here and the team we have distributed around the globe. The Seattle office will remain, and we will be increasing our hiring plans. IBM has a number of other resources in Seattle, including Cloudant and so we will be looking at opportunities to pull those teams together where appropriate.”

IBM has such a diverse set of cloud offerings. How do you fit into the puzzle there? “I think IBM has one of the clearest and well defined cloud strategies of any of the major vendors out in the market today. The story is public, dedicated and local, with public being the traditional public cloud, taking on the likes of Amazon, Microsoft and Google. Dedicated meaning a hosted private cloud, like the product we have had in the market for the last 18 months. And local being an on-premises private cloud, like the product we announced at the OpenStack Summit a week ago. And so, the technology at Blue Box will be used to provide the dedicated and local aspects of that strategy.”

Talk about your startup journey, since Blue Box today is a very different company that it was when you founded it in 2012? “I couldn’t be more excited. You look at 12 years in the technology space — particularly in the cloud infrastructure space — and everything here moves so fast. And that is part of what has kept me so interested and engaged over the past 12 years. From the day I founded this company, the desire was to make companies more successful with their Web presence, and whether that was simple Web hosting or managed hosting or the private cloud technology that we built — the goal was still the same: How do we get these new technologies that will make these companies more competitive in the marketplace out to as many companies as possible.”

On what he’s most proud of: “The company has been able to morph over the years…. We didn’t stay stuck in one methodology in business. We were able to adapt the company with the changing realities of the marketplace, and build a product that really satisfies a big need right now.”

Did your bootstrapping ways help or hurt in making those adaptations? Or did you start to adapt after you raised money and had flexibility to try new things? “The reason we went out to raise money was to have the flexibility to build a new product and take some risk. As a bootstrapped company, you are certainly limited to what customers want now, and it becomes much more difficult to build for what customers may want tomorrow. The venture investment we took was to go build that product that we felt could satisfy needs that nobody else in the marketplace was delivering. We see the same opportunity here at IBM. Now, we have the resources to continue to build on this technology and continue to innovate in new areas over the coming years.”

I want to ask about valuation of the deal, but sounds like you are keeping that tight-lipped? “I have been informed that … I can not share that number. I will say that I am thrilled. It is a great return for our investors. It is a great return for our employees. And, it is a great return for me.”

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