VMware scooped up Kubernetes-focused Heptio in a move that bolsters its push into that open source ecosystem and continues the merger and acquisition frenzy around the container orchestration platform. The deal also boosts VMware’s position outside of its traditional virtual machine (VM) focus.
Paul Fazzone, senior vice president and general manager of VMware’s Cloud Native Apps Business Unit, said the Heptio acquisition was based on growing Kubernetes demand from enterprise customers. He said the company sees Kubernetes as being the basis for cloud-native and cloud-agnostic infrastructure.
Heptio will be folded into VMware’s Cloud Native Apps Business Unit. Fazzone said that more complete integration plans, including those for Heptio’s executives, would be announced closer to the deal being finalized. That is scheduled to happen by the middle of next year.
Craig McLuckie, CEO and co-founder of Heptio, said that the deal will boost its ability to broaden its reach into the enterprise space. He mentioned that Heptio was limited by internal resources and that tapping into VMware’s already established market reach was required to expand Heptio’s operations.
McLuckie also noted that VMware led the virtualization disruption in the enterprise space. And that made it a good partner to lead a similar disruption that is happening with Kubernetes as the basis for cloud-native infrastructure.
Heptio CTO Joe Beda and McLuckie formed the company having both been involved at Google on its Compute Engine and the platform that eventually became the open source Kubernetes project. Both remain active in the Kubernetes community.
Financial terms of the deal were not released. Heptio had raised $33.5 million in funding since its founding. That included a $25 million Series B round late last year. Investors include Madrona Venture Group, Accel Partners, and Lightspeed Venture Partners.
As a possible frame of reference, Red Hat earlier this year acquired container platform provider CoreOS for $250 million. CoreOS’ flagship product was its Kubernetes-based Tectonic platform that has since been integrated into Red Hat’s OpenShift platform. CoreOS has raised just under $50 million in funding prior to being acquired.
Red Hat, in turn, was acquired last week by IBM for $34 billion.
VMware’s Kubernetes Expansion
VMware earlier today announced a number of new container and Kubernetes initiatives as part of its VMworld Europe event. And that deeper integration comes as containers and Kubernetes continues to encroach onto the vendor’s VM business.
Dan Kohn, executive director of the Cloud Native Computing Foundation (CNCF), recently said the group is focused on seeing if Kubernetes could replace OpenStack and VMware as the basis for cloud native infrastructure. The Kubernetes Project is hosted by CNCF.
A Redmonk survey from last year found 71 percent of the Fortune 100 organizations use containers, and more than 50 percent of Fortune 100 companies use Kubernetes as their container orchestration platform. The research firm noted that as of the first quarter of this year, “Kubernetes is arguably the most visible of core infrastructure projects.”
“Kubernetes has gone from curiosity to mainstream acceptance, crossing any number of chasms in the process,” wrote Redmonk co-founder Stephen O’Grady in a blog post. “The project has been successful enough that even companies and projects that have competing container implementation strategies have been compelled to adopt it.”
Analysts had been concerned about VMware’s positioning in terms of container adoption. However, some have noted that many enterprises are likely to run their initial container deployments on VMs due to convenience and familiarity.
“We believe VMware continues to underplay the container movement,” said Gregg Moskowitz, managing director and senior research analyst at Cowen & Company in a recent report. “The good news for VMware is that we think most organizations will initially deploy containers within a vSphere environment. That should enable them to navigate the container threat over the medium term. Nevertheless, there is some long-term risk for vSphere in our view.”
Fazzone said he did not see the move as being defensive, and the company has been aggressive in terms of adding Kubernetes and container support to its portfolio.
VMware in June launched its hosted Kubernetes Engine (VKE) software-as-a-service (SaaS) platform. It’s designed to helps with deployment and scaling that more closely aligns with actual resource usage as a way to control costs and allows enterprises to avoid having to hire specialized workers to handle their Kubernetes plans.
The company also offers the Pivotal Container Service (PKS) that was launched last year in partnership with Google and Pivotal. That platform is a self-managed Kubernetes container service that runs on VMware’s vSphere and Google Cloud Platform (GCP). Customers can deploy and operate Kubernetes clusters regardless of where PKS is deployed on either private or public clouds.
Bill Shelton, vice president of product management at VMware, explained that its vSphere and PKS platforms are based “on more traditional VMware delivery models.” VKE, by contrast, is a pure SaaS service that is available only on public clouds.