No Deal Between Microsoft, Mesosphere

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Mesosphere and Microsoft couldn’t come to terms over a potential buyout of the cloud infrastructure startup, said people briefed on the recent discussions.

Microsoft this summer made an offer of around $150 million for Mesosphere, these people said, but the startup wanted more. It looked for alternative bidders willing to pay more than $200 million, one of these people said, without apparent immediate success.

The companies are still working with one another, with Microsoft making it easier for people who build cloud applications using Mesos to integrate with Microsoft’s Azure cloud platform. Mesos is the open-source software that Mesosphere is trying to commercialize. Apple has started using Mesos across its cloud applications, for instance.

Mesosphere says it is currently fundraising. The new "strategic" round, likely more than $50 million, could include Microsoft and Intel with a premoney valuation north of $300 million, said one person familiar with the discussions. Mesosphere is one of several high-profile startups trying to make money from open-source infrastructure software.

Amir Efrati is executive editor at The Information, which he helped to launch in 2013. Previously he spent nine years as a reporter at the Wall Street Journal, reporting on white-collar crime and later about technology. He can be reached at [email protected] and is on X @amir