VMware’s CloudHealth Technologies acquisition closed Thursday after a whirlwind 18-month courtship. Joe Kinsella, CTO and CloudHealth co-founder, said it all started with a meeting to discuss a VMware-CloudHealth technology partnership. And then VMware’s “strategy shifted when they realized this was an area they needed to own for multi-cloud management,” Kinsella said.
VMware CEO Pat Gelsinger first announced the CloudHealth deal on stage at VMworld in August. CloudHealth, Gelsinger said, gives VMware “the most complete set of multi-cloud management tools in the industry.”
The companies won’t disclose the purchase price, but reports put it at about $500 million.
SDxCentral caught up with Kinsella on Oct. 4, the day the acquisition closed and Kinsella’s first official day as a VMware employee. He said CloudHealth, founded in 2012, allowed him to merge his two professional passions: IT management and cloud computing. The startup, whose multi-cloud management and operations platform supports Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform, grew to more than 3,000 customers including Yelp, Dow Jones, Zendesk, Skyscanner, and SHI. It also raised $85.7 million, most recently scoring $46 million in a June 2017 Series D round.
“Everything just clicked, this message of managing your cloud infrastructure, and cost management and security and compliance,” Kinsella said. “Before being acquired by VMware we were on the path to becoming a public company.”
Inside the Deal
And then 18 months ago he met with a VMware senior vice president in charge of partnerships.
“We thought there was a lot of energy, and we walked out of that meeting thinking VMware should OEM our platform,” he said. So the CloudHealth team got to work on that project until VMware’s strategy shifted from partnering to purchasing.
“In May, we started to really engage. We had to [decide] is this something we want to do.” Kinsella remembered. From the CloudHealth perspective, the growing importance of hybrid cloud sealed the deal.
“VMware’s been the single greatest provider of IT infrastructure in the last couple of decades,” Kinsella said. “CloudHealth was born as public-cloud first. We started in two different worlds but we had customers pulling us into the data center and VMware was being pulled into the public cloud. Our two worlds were being pulled together.”
VMware’s Public Cloud Strategy
At VMworld, Gelsinger said VMware plans to roll its existing cloud automation, compliance, and governance tools into a new CloudHealth suite. “We will make CloudHealth the cloud operations health platform of choice,” he said.
And then last month at the Deutsche Bank Technology Conference, Rajiv Ramaswami, VMware’s COO for products and cloud services, provided more details about the virtualization giant’s public cloud strategy. CloudHealth, he said, plays a starring role.
“With CloudHealth, our rationale is that it provides us that framework and foundation to go build a full set of services to provide management, operations, security, compliance, cost management, across all of these public clouds,” Ramaswami said.
According to Kinsella, VMware also plans to go after managed service providers with its new CloudHealth product line. “We really believe that managed services are going to be a way that many segments are going to consume public cloud and private cloud,” he said. “You will see some exciting things as a result of this partnership between CloudHealth and VMware.”
Cloud’s Next Phase
He also discussed the next phase of cloud computing. In this phase, the proliferation of multi-cloud will create a divergence — not a convergence — of cloud providers.
With infrastructure-as-a-service (IaaS), compute and storage across public clouds are similar, Kinsella said. But as you move to platform-as-a-service (PaaS), and add machine learning and big data services, “there’s really a fantastic diversity that’s occurring across these clouds,” he said. “I’m watching customers start to treat the cloud as a composable service. They take a few services from one public cloud and a few services from another public cloud and they combine them into one business application.”
For example, a CEO of a medical imaging company created a business service that used multiple software-as-a-service (SaaS) products, Amazon S3 for storage, and Google’s machine learning services. “He had multiple-different cloud providers, but for him is was just one, cohesive business application that his customer received,” Kinsella said.
Admittedly, this cloudy vision is self-serving because it requires a comprehensive multi-cloud management tool like CloudHealth.
“What it means is the complex world we’ve been living in since the advent of the public cloud is going to get a lot less complex,” Kinsella said.“VMware eliminates the complexity inside your data center. CloudHealth was born to eliminate complexity in your public cloud. And the combination of the two companies is there to do both across your multi-cloud.”
CloudHealth CTO and co-founder Joe Kinsella.