VMware spends $4.8B to grab Pivotal, Carbon Black to secure, develop integrated cloud world

All things cloud are major topics of conversation at the VMworld user conference next week, ratcheded up a notch by VMware’s $4.8 billion plans to acquire cloud development firm Pivotal and security provider Carbon Black.

VMware said during its quarterly financial call this week it would spend about $2.7 billion on Pivotal and its Cloud Foundry hybrid cloud development technology, and about $2.1 billion for the security technology of Carbon Black, which includes its Predictive Security Cloud and other endpoint-security software.  Both amounts represent the enterprise value of the deals the actual purchase prices will vary, experts said.

VMware has deep relationships with both companies. Carbon Black technology is part of VMware’s AppDefense endpoint security. Pivotal has a deeper relationship in that VMware and Dell, VMware’s parent company, spun out Pivotal in 2013.

“These acquisitions address two critical technology priorities of all businesses today – building modern, enterprise-grade applications and protecting enterprise workloads and clients. With these actions we meaningfully accelerate our subscription and SaaS offerings and expand our ability to enable our customers’ digital transformation,” said VMware CEO Pat Gelsinger, on the call.

With regards to the Pivotal acquisition Gelsinger said the time was right to own the whole compute stack. “We will now be uniquely positioned to help customers build, run and manage their cloud environment, and customers can go one place to get all of this technology,” Gelsinger said. “We embed the technology in our core VMware platform, and we will explain more about that at VMworld next week.”

On the Carbon Black buy Gelsinger said he expects the technology to be integrated across VMware’s produce families such as NSX networking software and vSphere, VMware’s flagship virtualization platform.

“Security is broken and fundamentally customers want a different answer in the security space. We think this move will be an opportunity for major disruption.”

Patric Morley, president and CEO of Carbon Black wrote of the deal: “VMware has a vision to create a modern security platform for any app, running on any cloud, delivered to any device – essentially, to build security into the fabric of the compute stack. Carbon Black’s cloud-native platform, our ability to see and stop attackers by leveraging the power of our rich data and behavioral analytics, and our deep cybersecurity expertise are all truly differentiating.”

Both transactions are expected to close in the second half of VMware’s fiscal year, which ends Jan. 31.

VMware has been on a massive buying spree this year that has included:

• Avi Networks for multi-cloud application delivery services.
• Bitfusion for hardware virtualization.
• Uhana, a company that is employing deep learning and real-time AI in carrier networks and applications, to automate network operations and optimize application experience.
• Veriflow, for network verification, assurance, and troubleshooting.
• Heptio for its Kubernetes technology.

Kubernetes integration will be a big topic at VMworld, Gelsinger hinted. “You will hear very specific announcements about how Heptio will be used. [And] we will be announcing major expansions of our Kubernetes and modern apps portfolio and help Pivotal complete that strategy. Together with Heptio and Pivotal, VMware will offer a comprehensive Kubernetes-based portfolio to build, run and manage modern applications on any cloud,” Gelsinger said.

“VMware has increased its Kubernetes-related investments over the past year with the acquisition of Heptio to become a top-three contributor to Kubernetes, and at VMworld we will describe a major R&D effort to evolve VMware vSphere into a native Kubernetes platform for VMs and containers.”

Other updates about where VMware vSphere and NSX-T are headed will also be hot topics.

Introduced in 2017, NSX-T Data Center software is targeted at organizations looking to support multivendor cloud-native applications, bare-metal workloads, hypervisor environments and the growing hybrid and multi-cloud worlds. In February the company anointed NSX-T the company’s go-to platform for future software-defined cloud developments.

VMware is battling Cisco’s Application Centric Infrastructure, Juniper’s Contrail system and other platforms from vendors including Pluribus, Arista and Big Switch. How NSX-T evolves will be key to how well VMware competes.

The most recent news around vSphere was that new features of its Hybrid Cloud Extension application-mobility software enables non-vSphere as well as increased on-premises application workloads to migrate to a variety of specific cloud services. Introduced in 2017, VMware HCX lets vSphere customers tie on-premises systems and applications to cloud services.

The HCX announcement was part of VMware’s continued evolution into cloud technologies. In July the company teamed with Google to natively support VMware workloads in its Google Cloud service, giving customers more options for deploying enterprise applications.

Further news about that relationship is likely at VMworld as well.

VMware also has a hybrid cloud partnership with Microsoft’s Azure cloud service.  That package, called Azure VMware Solutions is built on VMware Cloud Foundation, which  is a packag of vSphere with NSX network-virtualization and VSAN software-defined storage-area-network platform. The company is expected to update developments with that platform as well.

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