The business impetus for hybrid platforms that has spawned the multi-cloud container environments I recently discussed has also sparked realignments in several product categories including application and cost management software, IT automation software and application development tools. Two recent events illustrate the phenomenon:
- The work by Microsoft and Chef to create integrations between Azure and multiple Chef automation and governance products.
- The acquisition of RightScale, a pioneer in cloud infrastructure and cost management, by Flexera, a provider of software asset and vulnerability management products.
Neither of these items is particularly momentous outside of their respective market niches, but together with other recent events, they illustrate that the dichotomy between traditional private enterprise software and infrastructure and public cloud services is blurring into merged systems capable of spanning multiple operating environments.
Other notable announcements illustrating the merging of traditional and cloud software include:
- Other acquisitions of cloud cost management products by Microsoft (Cloudyn) and VMware (CloudHealth)
- Recent joint announcements at Microsoft Ignite like the Open Data Initiative with SAP and Adobe, the SAP Data Custodian on Azure
- The expansion of SAP product support on Google Cloud
- Oracle continues to blend its on-premise and cloud services as it navigates to a world of hybrid enterprise applications and infrastructure. Indeed, Chairman Larry Ellison and CEO Mark Hurd spoke at length about the company's strategic migration to cloud software on the company's Q1 2019 earnings call where Ellison characterized the situation this way (emphasis added),
"People are bringing their own database license to the cloud. So, what we’re seeing is, they want to use autonomous database in the cloud. Autonomous database requires the multi-tenancy option and it requires real application clustering option. And they’re trying it. They try it, they’re getting great performance, they’re going terrific availability. They go back and then to do a license deal where they acquire the pieces that are missing on multi-tenancy and real application clusters, and then they lift their entire license from on-premise and move it to the cloud. And we think that’s maybe the vast majority of our cloud. Our database cloud customers are going to be taking their existing on-premise license, augmenting it with certain new features required for autonomous database and then buying the infrastructure piece in the cloud while bringing their own license."
Details on two recent announcements from Chef and RightScale illustrate the business opportunities and concomitant complexities of blending cloud services and traditional enterprise software.
Chef, the company, has quietly expanded Chef the open source configuration management software into a full suite of infrastructure, application and software compliance tools known as Chef Automate. Besides the Chef infrastructure-as-code (IaC) tool, Automate includes modules for policy profiles and compliance auditing (InSpec) and application refactoring and deployment (Habitat). While the core Automate tools are open source and usable on any platform, integrating them with a particular cloud environment requires some work, hence the importance of Chef’s collaboration with cloud vendors. Automate is already available on AWS as a version of the OpsWorks service. At Microsoft Ignite, the company announced even broader integrations with Azure, specifically:
- Chef Automate 2.0 will be available as an Azure managed service, including the required Chef server, OS and app updates and data backup, that can be deployed in under an hour.
- Integration of Chef Workstation, the client interface to the configuration management system, with the Azure Cloud Shell to enable running Chef commands without leaving the Azure UI.
- InSpec integrations that enable policy scans and compliance checks of Azure resources, including Azure instances not managed by a Chef server. Chef has also developed compliance profiles to validate Azure configurations meeting the Center for Internet Security (CIS) security benchmarks, a 200+ page document that details secure configurations for a variety of system designs.
- Habitat support for Azure environments that greatly simplify the refactoring and deployment of legacy applications to Azure using VMs or containers, while providing the hooks allowing applications to use native Azure services like CosmoDB or AzureSQL without recoding.
While some of these features duplicate those already available in Azure’s native Automation service, Vikram Ghosh, Chef’s VP of cloud partnerships says its compliance product is a crucial differentiator, while the Cloud Shell integration appeals to existing Chef customers that want to migrate workloads to Azure.
Flexera, a purveyor of software asset management (SAM) and vulnerability assessment and mitigation software just announced that it has acquired RightScale, the company best known for its price comparison tool for cloud services (which I've discussed here) and annual cloud user survey (my most recent commentary here). The combined organizations yield a technology asset and service management portfolio that spans traditional on-premise hardware and software, along with cloud-based infrastructure and SaaS.
According to Flexera CEO Jim Ryan, 60 percent of his customer's IT budget goes to software, hardware and cloud services, with the cloud being the fastest growing segment. While Flexera customers currently use its products to manage on-premise spending, Ryan says they "have been very clear on their desire to manage public cloud costs with Flexera, just like they do for desktop, datacenter, SaaS and other IT assets." As Ryan evaluated cloud management platforms for potential acquisition, he found that RightScale differentiated itself by not only being able to track spending, but set and enforce policies to prevent overspending from reoccurring. “RightScale can turn the insight into action,” Ryan said.
Ryan also wanted to significantly boost Flexera’s cloud software and service development expertise and found that RightScale’s workforce of “meat-eating cloud types is a great enhancement to our engineering teams and company culture.” From RightScale's perspective, the combined company gives it the resources and access to an existing SAM portfolio needed to expand its customer base and deal size.
The Flexera-RightScale deal is the latest acquisition of a cloud service and cost management specialist by a larger, established IT vendor. Last year saw Microsoft acquire Cloudyn and Cisco buy Cmpute.io (aka 47Line Technologies). Cisco's head of M&A aptly noted that as enterprises moved more workloads to multiple cloud vendors, the management complexity and lack of complete usage tracking created uncontrolled spending, adding "With a multi-cloud strategy, customers need to budget, buy, and consume differently."
These buyouts of previously independent cloud management products create a potential problem for organizations building multi-cloud capabilities since they risk skewing the tools’ feature sets and recommendation algorithms to towards the products of the acquiring vendor, be it Microsoft, Cisco or VMware. As Kim Weins, RightScale’s VP of marketing correctly points out, using a vendor-agnostic management offering and not one owned by a company “with a horse in the race” is imperative for organizations using multiple cloud vendors.
A similar dynamic of product consolidation and blending is playing out in tools designed for software developers, DevOps teams, systems and database analysts and IT asset managers. While the details vary, each group suffers from the inefficiencies of operating in an IT world bifurcated between traditional, private systems and public cloud services. As the reality of enterprise IT becomes hybridized between the two, expect to see an increased pace of mergers, partnerships and blended portfolios that span the old and new worlds.