This year has been a record setting year for tech acquisitions, many of which are related to cloud-based services. Palo Alto networks acquired startup Redlock to bolster its cloud security offerings. Apptio was acquired by private equity for $1.94 billion, and one of their core products is analyzing and optimizing cloud expenses. Adobe acquired cloud marketing automation giant Marketo for $4.75 billion, and, of course, IBM acquired Red Hat for $34 billion in the largest tech acquisition of all time.
If you’re an enterprise IT executive who plans to make a big bet on the cloud, you’ve got to be feeling pretty confident right now: these acquisitions, combined with announcements from the likes of Alibaba and Salesforce that they will be embracing cloud as their primary business model, indicate a quorum of faith in the cloud across the business landscape. Let’s break down some of these acquisitions and what they mean for the future of the cloud.
Palo Alto networks was originally a firewall vendor but has since branched out into the full spectrum of IT security. With security being such a high priority for enterprises, it makes sense for them to bolster their cloud security offerings by acquiring RedLock. There have been cases where data in the cloud has been exposed to hackers because of bad configurations and insecure practices put in place by vendors, RedLock makes it easier for Palo Alto Networks to spot these vulnerabilities and patch them up easily. To paint a picture of how important cloud security is, RedLock was acquired after being out of stealth mode for just one year.
This acquisition gives a sense of déjà vu: Vista Equity firm acquired cloud marketing automation giant Marketo for $1.79 billion in 2016, and then sold Marketo to Adobe two years later for a hefty $3 billion profit. Vista is known for making strong bets on SaaS and cloud, and Apptio fits their profile to a tee.
Apptio offers cloud business management software, with some handy features like cloud cost management. Someone filling the relatively new job title, Cloud Cost Manager, would probably find this software to be very valuable. Every company working with a large CSP like AWS or Azure will need to optimize costs. The fact that Vista Equity has made this acquisition implies they strongly believe in the growth of cloud spend across the board.
After acquiring Magento, a cloud ecommerce platform, less than a year ago, Adobe continues to beef up their presence in digital marketing with Marketo. The synergy is there: Adobe Creative Cloud is probably the most used design suite out there, and Adobe Analytics is a hyper-premium analytics suite for marketers, similar to Google Analytics 360. Adding ecommerce and marketing automation to the stack rounds out their offerings nicely. I wouldn’t be surprised to see Adobe pick up or build a cloud CRM somewhere along the line to give themselves a complete digital marketing and customer experience management suite.
Last but not least, and in fact most, IBM has acquired RedHat in the largest tech acquisition of all time. Ginni Rometty, IBM, Chairman, President, and CEO, said in a statement: “The acquisition of Red Hat is a gamechanger. It changes everything about the cloud market. IBM will become the world’s number-one hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their business.”
This is an ambitious move for IBM, who has aspired to be a cloud leader for a long time now. Earlier this year they beefed up Netezza, their cloud data warehousing offering, adding features like integrated analytics. This deal shows that IBM is all-in on the cloud, and means the cloud is probably a safe bet.
To reiterate: If you’re an IT executive considering taking your company to the cloud, there’s a lot of evidence suggesting you’ll find the value and support you’ll need there. Almost every major tech company is placing huge bets on the cloud because they’re confident that it’s what’s best for their customers. Several fortune 500 companies have recently modernized their data infrastructure, or are actively doing so (about 76%, in fact). Even the US Government, who traditionally waits for an industry to mature before adopting new technology, has moved over half of its agencies into the cloud – and is currently running a $10 billion RFP to see who gets to be the official cloud of the Pentagon.
Do you have an observation or opinion about what these acquisitions mean for the cloud? Let me know in the comments.