Sponsored By

Here's What VMware Paid for Kubernetes Startup HeptioHere's What VMware Paid for Kubernetes Startup Heptio

VMware paid a hefty premium over Heptio's funding to advance its open source containers strategy.

Mitch Wagner

December 17, 2018

3 Min Read
Here's What VMware Paid for Kubernetes Startup Heptio

VMware paid $550 million to acquire Kubernetes startup Heptio -- more than ten times Heptio's total funding -- in a deal that closed last week, as VMware seeks to enhance its multicloud toolkit.

VMware Inc. (NYSE: VMW) entered into a definitive agreement to acquire Heptio for cash and assumed unvested equity awards, according to a Securities and Exchange Commission (SEC) filing Monday, Dec. 10.

Specifically, VMware plans to use Heptio assets to enhance its existing Pivotal Container Services (PKS) portfolio. PKS is a Kubernetes lifecycle management platform for which VMware partners with Pivotal ; both companies are controlled by Dell Technologies.

Heptio tools will augment VMware PKS, a packaged enterprise software suite, and VMware Cloud PKS, a Kubernetes multi-cloud service currently in beta, according to a blog item posted Tuesday by Paul Fazzone, senior vice president and general manager of the VMware cloud native apps business unit. VMware will enhance Heptio's tools with enterprise capabilities for disaster recovery, auditing, diagnostics and traffic delivery. These capabilities will be available to users running Kubernetes on vSphere for hybrid cloud or using Kubernetes on public cloud.

Figure 1:

"We are committed to Kubernetes -- both the technology and the community," Fazzone says. "Kubernetes represents the next frontier of infrastructure modernization, and we will be focused on helping customers gain meaningful business value from Kubernetes regardless of where and how they choose to operate it." (See VMware Climbs On the Istio Train for Kubernetes Management.)

The acquisition is a substantial payday for Heptio's investors; the company has raised $33.5 million funding in two rounds since its 2016 founding, most recently last year. The company was founded by Joe Beda and Craig McLuckie, two Google (Nasdaq: GOOG) alumni who helped create Kubernetes. VMware announced the acquisition last month. (See VMware Swings to Kubernetes.)

Multi-cloud and Kubernetes are driving significant M&A activity. IBM Corp. (NYSE: IBM) plans to acquire Red Hat for $34 billion to beef up its multi-cloud and open source cultures. And Red Hat itself bought Kubernetes toolmaker CoreOS for $250 million in January. (See IBM-Red Hat: A Crazy Plan That Might Work, How Red Hat Could Give IBM's Telco Strategy a New Lease of Life and Red Hat Buys CoreOS for $250M, Building Kubernetes Muscle.)

VMware has been navigating a multi-year transition from its roots in on-premises, data center, server virtualization to a multi-cloud future. It's been using acquisitions to drive that change. It acquired Nicira for software-defined networking in 2012 for $1 billion, and VeloCloud for SD-WAN last year, for $449 million. (See What VeloCloud Cost VMware , VMware to Acquire SD-WAN Startup VeloCloud and VMware to Buy SDN Startup for More Than $1B.)

Related posts:

— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Follow me on Facebook Executive Editor, Light Reading

About the Author(s)

Mitch Wagner

Executive Editor, Light Reading

San Diego-based Mitch Wagner is many things. As well as being "our guy" on the West Coast (of the US, not Scotland, or anywhere else with indifferent meteorological conditions), he's a husband (to his wife), dissatisfied Democrat, American (so he could be President some day), nonobservant Jew, and science fiction fan. Not necessarily in that order.

He's also one half of a special duo, along with Minnie, who is the co-habitor of the West Coast Bureau and Light Reading's primary chewer of sticks, though she is not the only one on the team who regularly munches on bark.

Wagner, whose previous positions include Editor-in-Chief at Internet Evolution and Executive Editor at InformationWeek, will be responsible for tracking and reporting on developments in Silicon Valley and other US West Coast hotspots of communications technology innovation.

Beats: Software-defined networking (SDN), network functions virtualization (NFV), IP networking, and colored foods (such as 'green rice').

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like