GigaSpaces said it will spin off its Cloudify orchestration and cloud management business.
Privately held GigaSpaces said the move is driven by Cloudify’s success in the enterprise cloud market and more recent focus on the carrier network orchestration space. GigaSpaces noted Cloudify has posted 100 percent year-over-year growth, and signed “numerous deals with Tier-1 enterprise and telecommunication providers through the first half of this year.”
The business unit will leave the nest with its engineering, product, and marketing teams. Those teams will maintain their existing offices in New York City, Silicon Valley, and Tel Aviv.
GigaSpaces last year moved all of its products into open source, with a corresponding shift in its business model. Cloudify took advantage of the move by launching its Apache Project Aria orchestration platform. The Aria Project was formed to boost adoption of the Topology and Orchestration Specification for Cloud Applications (TOSCA) standard, which Cloudify uses to model every aspect of an application.
The platform supports private cloud environments like OpenStack and VMware; public clouds like Amazon Web Services (AWS), Microsoft Azure, and Google Compute Platform; and container technologies like Docker, Docker Swarm, Kubernetes, and Mesos. Some operators also use the company to manage their network functions virtualization (NFV) infrastructure.
Cloudify updated its platform earlier this year in a move to better address the needs of IT managers and developers. The current version includes two product lines targeting the enterprise and service provider space.
“It was always our plan to eventually spin off Cloudify,” said company CTO Nati Shalom in a statement. “Based on the impressive growth of the open source Cloudify project, and increased market penetration of the commercially supported Cloudify product, it has become clear that now is the time to do so. This strategic move gives us the freedom to accelerate engineering development in both product lines.”
Prior to the latest update, analyst firm Global Data judged the Cloudify platform “very strong” in an assessment of NFV management and orchestration (MANO) products. Other highly touted NFV MANO vendors in the Global Data report included Huawei, Netcracker, Nokia, and ZTE.
Analysts agreed that Cloudify’s growth put pressure on GigaSpaces to make the move.
“The move is a positive one as growing companies like GigaSpaces need the focus to differentiate themselves from the competition,” said Edwin Yuen, analyst with Enterprise Strategy Group. Yuen added the issue “came to a head as Cloudify has grown and expanded beyond the orchestration layer to support and help deployments that may leverage” other GigaSpaces platforms.
“What it really does is remove the question that’s asked by customers, which is how the two products are related and do I need to use GigaSpaces to use Cloudify and vice versa,” Yuen added. “The spinoff clears that position up.”
What About GigaSpaces?
GigaSpaces said it will remain focused on its XAP and InsightEdge product lines.
XAP is the company’s software line for in-memory computing. InsightEdge is an analytics tool that leverages the Apache Spark cluster computing project.
If Cloudify was so successful, why would GigaSpaces look to set it free? GigaSpaces CEO Zeev Bikowsky said that the spin will “enable greater clarity and focus for our current and possibly future investors.”
Yuen said that clarity is important for investors, and is likely to lead to new financing down the road.
“The difficulty in finding financing, for the older combined company, was the same question that customers were asking: what’s the relationship between the product lines and how do they help each other,” Yuen said. “If they don’t, then investors that have a specific focus on one product line or another will see the additional products as a negative. This spinoff gives clarity for the investors on the direction that each company is going in and where the investments will be made to grow those products. I would expect to see one, if not both companies, to announce some new funding in the near future.”