Our $100M Series B

I think for the internet to break out of walled gardens, high-quality independent datacenters need to exist -- nobody wants to manage their own datacenters, and nobody wants to rely on Google/Amazon/Microsoft's platforms or (even worse) business products. I hope this continues.

I thought I saw this question answered in a previous thread and the answer was basically “no”, but the question has been avoided a lot.

Aspects of equity compensation would inherently need to be different over time due to valuation, fundraising stage, and so on. However I always thought it was strange that they made a big deal about paying everyone the same base salary but then were silent on the equity comp strategy. Everyone knows that in a job like this the total comp is important.

The old Oxide compensation discussions were interesting. There was discussion about how they thought candidates asking about compensation to be something of a negative signal because they wanted people who weren’t in it for the money, basically. I heard this from a now ex-employee of Oxide who was describing how to navigate their hiring process, so take with a grain of salt.

EDIT: I checked their website again. The compensation link goes to a blog post ( https://oxide.computer/blog/compensation-as-a-reflection-of-... ) which has this section about equity:

> Some will say that we should be talking about equity, not cash compensation. While it’s true that startup equity is important, it’s also true that startup equity doesn’t pay the orthodontist’s bill or get the basement repainted. We believe that every employee should have equity to give them a stake in the company’s future (and that an outsized return for investors should also be an outsized return for employees), but we also believe that the presence of equity can’t be used as an excuse for unsustainably low cash compensation. As for how equity is determined, it really deserves its own in-depth treatment, but in short, equity compensates for risk – and in a startup, risk reduces over time: the first employee takes much more risk than the hundredth.

Which doesn't answer the question.

> Since originally writing this blog entry in 2021, we have increased our salary a few times, and it now stands at $207,264. We have also added some sales positions that have variable compensation, consisting of a lower base salary and a commission component.

Employees apart from the very early ones are likely really getting fucked on equity because oxide explicitly treats candidates asking about equity as a red flag.

Companies structured like this end up turning into a combination of rich people who don’t need money and are just interested in the problem space and then mediocre people who can’t get a better offer. (If you are good, remote work with high TC is definitely available.)

Unless Oxide is giving out huge equity bonuses for good perf (which would make their comp post hypocritical), it’s going to have a continuous talent decline as it grows. There aren’t enough independently wealthy high performers interested in what Oxide is doing to sustain a talent pool.

Are you being snarky and suggesting that employees deserve the same upside that founders deserve?

There are of course benefits to using cloud based VMs and I use them as well. But you are paying a very steep premium for what is a pitiful amount of compute and memory. There's a lot of wiggle room for price decreases and the only thing preventing that is a lack of competition. There's a reason Amazon is so rich: nobody seems to challenge them on AWS pricing. There's value in having them do all the faffing about with hardware of course. That's why companies use them. I'm in GCP; but same principle. I don't want to have to worry about replacing hard disks in the middle of the night, deal with network routers that are misbehaving, cooling issues, etc. That's why I pay them the big bucks. But I'm well aware that it's not that great of a deal.

I used Hetzner a decade ago and paid something like 50 euros per month for a quad core xeon with a raid 1 disks, 32 GB, etc. Bare metal of course. But also, 50 euro. We had five of those. Forget about getting anything close to that with modern cloud providers for anything resembling a reasonable price. Your first monthly bill might actually add up to enough to buy your own hardware. Very tempting. They have beefed up their specs since then. You now get more for less. And they also do VMs now.

But at the high end, I think the market is litterally infinite. Every large company should want this, and want it now. Cloud providers are extremely expensive and, outside of the 1-tier where prices are really outrageous, they perform poorly and often offer little support.

This really feels like the future.

That’s the only thing I can tell is useful about “the cloud”

I can build racks and servers easily, but the challenge is availability and getting past everyone’s firewalls

So the real win is any service that allows for instant DNS table updates and availability of DNS whitelisting.

This is why Google, Msft etc win in email because they have trusted endpoints

Alternative routes with self signed DKIM etc is more or less blocked by default forcing you onto a provider

We need more cloud flare tunnel and local hosting via commercial ISP routes and less new centralized data centers

  > Our system delivers all the hardware and software you need to run cloud…

I'm literally so old that I write programs that run on a server and never think about infrastructure.

And such a clear value statement.

If I could, I'd invest. Sure, they might fail, but they're shooting their shot, and to me it has a clear differentiator that would improve the market for most of their users (if not the incumbents).

https://signalsandthreads.com/the-thermodynamics-of-trading/

I thought that Oxide was based on OpenCompute, which is basically the rack designs that Facebook open sourced, after hiring some Google employees to build their custom data centers. This project started in 2011:

https://en.wikipedia.org/wiki/Open_Compute_Project

https://github.com/opencomputeproject

Google definitely rebuilt the stack from first principles -- the data center was basically a huge embedded system, from power to racks to CPUs/memory/disk/network to kernel to user space to cluster software. (And no, they did not use Kubernetes.)

I have no idea how active the OpenCompute project is -- is Facebook still the main contributor, and are they still releasing their new rack designs?

And I also wonder how much Oxide has diverged from it? At least on the hardware side. On the software side, I guess the Illumos-derived parts and Rust parts are completely different.

Well, when they say they did their own:

    - board designs
    - microcontroller OS
    - platform enablement software
    - host hypervisor
    - switch 
    - integrated storage service
    - control plane

Maybe they only got the mechanical and power stuff from OpenCompute? i.e. the parts that change more slowly

Why does it have to be a public company though?

[0] https://oxide-and-friends.transistor.fm/episodes/rfds-the-ba...

I'm a big proponent of the "writing is thinking" mantra. Unfortunately, in my experience, not all technical leaders value grassroots proposal processes like the Oxide RFDs

Edit: some popup on their page links to https://github.com/oxidecomputer/rfd but it's a 404

Edit2: it's at https://github.com/oxidecomputer/rfd-site

It's more of that we're a young company, so we can only do so much, so quickly. Plus, because we do so much custom work, that all takes time. As we grow and scale up, we'll be able to move forward more quickly on updates on the hardware front.

We don't do "stage 1 interviews", we only do interviews as the very final step in the process, when we've narrowed things down to a handful of people. That initial packet is like 85% of the process.

I didn’t realize at the time, but Oxide’s application process was the best form of interview prep I’ve done. The process forced me to thoroughly document my values and career accomplishments. In later non-Oxide interviews, I effectively recited what I had written my materials. In that way, it has felt less one-sided than every other company application process I’ve gone through. I was able to take away an artifact from the experience, versus being filtered out via a coding challenge. It’s also been rewarding to reflect on my submission from years ago to see how my mindset and skills have evolved.

If you have any interest in working in the pediatric telemedicine space, I encourage you to email me your application. We accept Oxide materials. I’m happy to provide feedback as a hiring manager. My email and our company website are in my bio.

I think it brings an interesting point actually.

"Who will buy these", the obvious answer is anyone with a need, but the "standard pizzabox" server is ubiquitous for the same reason that x86 and miniPC's outcompeted mainframes.

((controversial take warning))

Mainframes are objectively better at high uptime and high throughput than rube-golderging a bunch of semi-reliable x86 boxes together, yet, the ubiquity of cheap x86 hardware meant that the lions share of development happened on them.

People could throw a pentium 2 PC in a corner and have it serving web traffic, and when things started growing too much you could add more P2 machines or even grab a Xeon 4socket machine later down the line.

This isn't possible with mainframes, and thus, people largely don't mess with them.

The annoying thing is that this kind of problem has some kind of stickiness effect. If you need a server, and then another, you buy them as you need them and if you're already 20 pizza boxes in; it's a pretty big ask to rip them all out and moving to a different vendor entirely than staging replacements one after another.

So I guess their target audience is the "we don't want to touch cloud" organisations that have a good IT spend that are willing to change vendors?

I don't think I've worked for any of those.

(FD: I'm actually a fan of the Oxide team, and the concept, and I would buy into the ecosystem except I have needs that are at most 3 servers at a time)

> An oxide rack has a minimum cost of something like 600k not including all the infra you need to run a rack, maintenance, and then needing to upgrade

So maybe not super useful for people who are looking to do some home-lab stuff or even setups for SMBs.

Edit: Another thread: https://news.ycombinator.com/item?id=36552556

> My guess is that a base config would be somewhere between $400K to $500K but could very definitely go up from there for a completely "loaded" config.

(other people's) previous guesstimates were 500k - 1M. It does look like you can order it partially provisioned (compute wise I'm guessing) and expand later.

[0] https://news.ycombinator.com/item?id=38498840

Yes.

> Then how does it bring cloud scalability?

You buy an entire (or half) rack at a time, and then can treat the entire thing as one elastic pool of resources, you do not need to manage the individual sleds within the server yourself. Your interface to the rack is similar to a VPS provider, it's "give me a new vm with these specs."

Happy to elaborate if you have more questions.

USIT > U.S. Innovative Technology (“USIT”) is an investment firm that backs growth-stage commercial companies with critical technologies relevant to the national interest, including, artificial intelligence, future of compute, new industry, space & communications, bio & healthcare, and defense tech. USIT was founded by American technologist and visionary investor Thomas Tull.

joined by: Riot Ventures, Eclipse, Jane Street

I was happy to learn about Sweater Ventures https://www.sweaterventures.com/our-story (and their kind) which are opening up access to investments, and also helping ensure the entry price is quite low (for example I invest $50 a month with them) .

It is my hope that in the future you will be able to order a micro fraction of any company as easily as you could a starbucks.

And IMO part of that equation might be to have the state start to work against contracts which restrict your rights on your own property (essentially contracts restrict when you can sell your shares, usually not until IPO or a company organized liquidity event)

> With growing customer enthusiasm, we were increasingly getting questions about what it would look like to buy a large number of Oxide racks. Could we manufacture them? Could we support them? Could we make them easy to operate together?

i.e. they need the capital in order to be able to satisfy large orders on sane timeframes - but that's very expensive when you're a hardware business.

https://oxide.computer/remote-access

> It seems like this is only tailored to large enterprise sales.

Since we sell half or full racks at a time, it's true that we're geared towards larger companies, as small shops just don't need that much computer.

> The only other option is just using them as your AWS replacement.

That's the use case, yep!

#1: Don't expect to see it until after AMD or someone else makes a product that actually manages to compete against Nvidia. Nvidia is pretty hostile to not running their low-level software stack, and Oxide is all about the legacy of Solaris.

#2: AMD MI400 or relative will be an extra chipset on future server motherboards (not a separate PCI card). Simultaneously, the boundary between "CPU vector processing" and "GPU used for transformers" will blur, and the chipsets will slowly merge into chiplets in one package.

#3: AMD MI400 and such AI accelerators will be primarily sold as full racks with its own custom "networking" (UALink switch), and the actual host CPU on those devices will be lower specs and mostly relegated to setup and metrics of the AI work, much like storage and networking appliances are built, AI workload will not even pass through the host CPU. I'm not sure Oxide can compete in that world. The "business logic CPUs" will reside in a different rack.

[0] https://oxide-and-friends.transistor.fm/

Do new internet users not know that the landing page usually contains information about the product they're talking about in their blog posts? 99% of the cases you can find what you're looking for on the landing page, and it took me a whole of 30 seconds to get here, writing this comment took longer time.

And then as a follow up you have to explain that

- they sell an entire rack full of servers

- they're the only ones that do this. Normally you have to buy all the pieces and put it together yourself, or pay someone to put it together for you but all the parts are kind of designed on their own by different companies so it's kind of a mess. Oxide makes one big rack with like 16-32 servers and it's all designed by them and just works, so you just plug it in and you have servers you can put a bunch of vms on. Oh and they're huge, each one literally costs like a million dollars

Company Name Single line Headline

Problem Our Solution

Gives you the entire company premise and product description.

Seems pretty clear to me.

https://artemis.sh/2022/03/14/propolis-oxide-at-home-pt1.htm...

(The author of this blog post now works for Oxide!)

"Our thesis is [...] and that a large, durable, public company could be built by whomever pulled it off."

So the goal is an IPO.

Also, what they do is very capital-intensive, so I’m not surprised that they’re raising more money.

That's the high level, happy to elaborate if you have more questions.

It’s a 7-foot tall rack with compute sleds, storage sleds, and network sleds. It has its own BMC design, its own power design, its own physical connectivity design, its own virtual networking design, its own hypervisor (although it’s based on Bhyve), its own OS (although it’s based on Illumos), and its own API to spin things up and configure them.

As I think of it, it’s basically a private cloud in a box and The Register wasn’t far off.

Oxide is kind of like Sun Microsystems, building polished vertically integrated monster machines, e.g. Sun E10k.

* https://en.wikipedia.org/wiki/Sun_Enterprise