VMware is acquiring CloudHealth, whose multi-cloud management platform works across Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform, for a reported $500 million.
The Boston-based CloudHealth touts its technology as enabling organizations to manage cloud cost, usage, security and performance from a single interface. While neither company disclosed financial terms of the deal, Reuters estimated the price tag based on input from knowledgeable sources.
VMware CEO Pat Gelsinger announced the acquisition in a keynote this week at VMworld 2018 in Las Vegas, positioning the deal as good news for VMware’s managed service providers (MSPs).
Gelsinger said:
“We will take CloudHealth and we're going to make it a fundamental platform and branded offering from VMware. We will be enabling through our enterprise channels as well as through our MSPs and VMware Cloud Provider Program partners as well. CloudHealth's technology makes it easier for enterprises to manage services on cloud providers other than AWS, with which VMware has a standing partnership, can only help MSPs sell the platform."
Raghu Raghuram, VMware’s chief operating officer for products and cloud services, said the transaction helps customers manage across a hybrid and multi-cloud environment. “With the addition of CloudHealth Technologies we are delivering a consistent and actionable view into cost and resource management, security and performance for applications across multiple clouds,” he said in a blog post.
CloudHealth: Where It Fits In VMware
VMware intends to combine the CloudHealth platform with its existing Wavefront, Secure State, and Cloud Automation services, enabling it to deliver insights and analytics, security and compliance and automation capabilities. “We now have a single platform that unites discrete data from all your tools, services, and environments, to give your business a truly holistic perspective, operational clarity and power to operate your clouds,” Raghuram said. "Together, these capabilities define the VMware Cloud Operations Platform," he said.
The six-year old CloudHealth, which to date has landed some $86 million in investment capital, including its recent $46 million Series D round led by Kleiner Perkins, is buoyed by rosy projections for the cloud systems management software market. Researcher MarketsandMarkets is forecasting the segment to grow nearly four-fold to $15.3 billion by 2021, climbing at an eye-popping 31 percent compound annual growth rate.
VMware expects the deal to close this quarter. CloudHealth, which brings more than 3,000 customers to VMware including Yelp and Dow Jones, will continue to operate in Boston.
In describing the CloudHealth platform, Raghuram borrowed the term “pit crew” from car racing, referring to the team of people who fix a driver’s car during a race. “Think about the thousands of objects and services created and used, hundreds of clouds accounts in an organization, multiple projects and owners and teams, and last but not least the diversity and idiosyncrasies of the individual clouds themselves,” Raghuram wrote. “This really exposes the need for a unifying, common and consistent operations layers across the clouds! Something like a pit crew headed by a crew chief.”
