VMware surprised many customers and industry watchers at its annual user conference, VMworld 2018, held this week, with its acquisition of CloudHealth Technologies, a multi-cloud management tool vendor. This went down only days before CloudHealth cut the ribbon on its new Boston headquarters. Joe Kinsella, CTO and founder at CloudHealth, spoke with us about events leading up to the acquisition, as well as his thoughts on the evolution of the cloud market.
Why sell now? And why VMware?
Joe Kinsella: A year ago, we raised a [Series] D round of funding of $46 million. The reason we did that is because we had no intention of doing anything other than build a large public company — until recently. A few months ago, VMware approached us with a partnership conversation. We talked about what we could do together. It became clear that the two of us together would accelerate the vision that I set out to do six years ago. We could do what we set out to do faster, on the platform of VMware.
How will VMware and CloudHealth rationalize the products that overlap within the two companies?
Kinsella: The CloudHealth brand will be a unifying brand across their own portfolio of SaaS and cloud products. That said, in the process of doing that, there will be overlap, but also some opportunities, and we will have to rationalize that over time. There is no need to do it in the short term. [VMware] vRealize and CloudHealth are successful products. We will integrate with VMware, but we will continue to offer a choice.
What was happening in the market to drive your decision?
Joe KinsellaCTO and founder, CloudHealth Technologies
Kinsella: Cloud management has evolved rapidly. What drives it [is something] I call the ‘three phases of cloud adoption.’ In phase one, enterprises said they would not go to the public cloud, despite the fact that their lines of business used the public cloud. Phase two was this irrational exuberance that everything went to the public cloud. [Enterprises in phase three] have settled on a nuanced approach to leverage a broad portfolio of cloud options, which means many public clouds, many private clouds and a diverse set of SaaS products. Managing a single cloud is complex; managing [such] a diverse portfolio is incredibly complex.
What’s your view today of cloud market adoption and how the landscape is evolving?
Kinsella: Today, the majority of workloads still run on premises. But public cloud growth has been dramatic, as we all know. Amazon remains the market leader by a good amount. [Microsoft’s] Azure business has grown quickly, but a lot of that growth includes the Office 365 product as well. Google has not been a big player until recently. It’s only been in the past 12 months that we felt the Google strategy that Diane Green started to execute in the market. Alibaba has made some big moves and is a cloud to watch. Though Amazon is still far ahead, it’s finally getting competitive.
But customers don’t really just focus on one source anymore, correct?
Kinsella: I’ve talked about the concept of the heterogenous cloud, which is building applications and business services that take advantage of services from multiple service providers. We think of them as competitors today, but instead of buying services from Amazon, Google or Azure, you might build a business service that takes advantage of services from all three. I think that’s the future. I believe these multiple cloud providers will continue to exist and be differentiated based on the services they provide.