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Red Hat Buys CoreOS for $250M, Building Kubernetes Muscle

Red Hat is shelling out $250 million to buy container management pioneer CoreOS, broadening Red Hat's Kubernetes support.

Red Hat Inc. (NYSE: RHT) is looking to use CoreOS's resources to broaden its open source toolkit to allow enterprises to deploy applications anywhere in a public, private or hybrid cloud environment, according to a statement from Red Hat announcing the acquisition Tuesday afternoon. (See Red Hat to Acquire CoreOS, Expanding Kubernetes & Containers Support.)

CoreOS launched in 2013 with a mission of providing organizations of all sizes with webscale infrastructure for updating and patching servers and reducing downtime and security vulnerabilities.

Red Hat sees CoreOS as bringing several complementary capabilities to OpenShift, Red Hat's own Kubernetes platform, Joe Fernandes, Red Hat senior director of product management for OpenShift, tells Enterprise Cloud News. (See Red Hat's OpenShift Online Revamped for Containers.)

CoreOS provides Tectonic, which automates Kubernetes management and operations, and will enhance those capabilities for OpenShift, Fernandes says.

CoreOS will provide Red Hat with considerable Linux expertise, Fernandes says; CoreOS's first product was CoreOS Container Linux, which competed with Red Hat Enterprise Linux.

And CoreOS also provides Quay, an enterprise-ready container registry.

Red Hat, 2004. Photo by Igelball at German Wikipedia GFDL or CC-BY-SA-3.0, via Wikimedia Commons
Red Hat, 2004. Photo by Igelball at German Wikipedia GFDL or CC-BY-SA-3.0, via Wikimedia Commons

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But the acquisition isn't really about containers; containers are just the enabling technology, Fernandes says. "This is really about enabling hybrid and multicloud solutions," he says. Enterprises now manage traditional and cloud-native apps running on-premises and in public, private and hybrid clouds. "That's what we're trying to enable with OpenShift, our container platform, and that's what this acquisition will help us accelerate."

CoreOS has 130 employees, with a primary office in San Francisco and offices in Berlin and New York, NY, all of which will be coming to Red Hat.

Previous notable Red Hat acquisitions include ManageIQ for orchestration, acquired for $104 million in 2012; FeedHenry, with a mobile application platform, acquired for $82 million in 2014; Ansible, for configuration management and orchestration, in 2015; and 3Scale for API management in 2016. (See Red Hat Buys 3Scale for API Management.)

Red Hat's most recent acquisition was Permabit Technology in August; that company specializes in storage optimization. (See Red Hat Acquires Data DeDup Specialist Permabit.)

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— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Visit my blog Follow me on Facebook Editor, Enterprise Cloud News

kq4ym 2/7/2018 | 8:28:40 AM
Re: Congrats On it's way to acheive a $3 billion revenue stream it's going to certainly find some disruption in the workforce and who's staying and leaving. Redhat has certainly been on an acquisition jag the last few years and it will be interesting to see how managers handle the mix and determine who stays or not.
Michelle 1/31/2018 | 8:51:04 PM
Re: Congrats Indeed. Mergers can be tough for employees when companies begin to cut costs. We shall see how it goes with this one!
[email protected] 1/31/2018 | 3:05:00 PM
Re: Congrats Michelle its true integration of staff and products is always harder than it seems. Many acquisitions become painful very quickly for both parties.
Michelle 1/30/2018 | 9:59:40 PM
Re: Congrats It's always interesting to see what happens next. A great many of acquisitions end popular products. I hope this one works out. 
[email protected] 1/30/2018 | 9:47:30 PM
Re: Congrats I agree and its shaping up to be the year of acquisitions which is good to see, companies investing in extending their capabilities through acquisition rather than sitting on piles of cash.
Michelle 1/30/2018 | 9:22:42 PM
Congrats This sounds like a good match. I look forward to the future of OpenShift, in particular. I think this really will help RedHat meet the needs of its customers.
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