Deals part of VMware’s push to grow capabilities in modern workloads and the cloud
VMware announced this week that it’s buying cloud-focused cybersecurity vendor Carbon Black for $2.1 billion and fellow Dell Technologies business Pivotal for about $2.7 billion, the latest in a spree of acquisitions in recent months by the company.
The Lowdown: Coming just days before the kickoff of VMware’s VMworld 2019 show in San Francisco, the latest acquisitions are part of VMware’s larger push to build out its capabilities around modern enterprise workloads and the cloud and enable it to grow more beyond virtual machines (VMs).
The Details: Carbon Black brings to VMware a cloud-native security platform that uses Big Data and behavioral analytics in its endpoint protection offerings. VMware will use Carbon Black’s platform with its own security solutions, such as AppDefense, Workspace ONE, NSX, and SecureState, to enhance security for applications running on devices in the cloud. Over the past several years, VMware has worked to build out its cloud capabilities, and cloud is expected to be a major part of VMware’s message at the conference next week.
Pivotal is a DevOps company that’s leveraging containers and the Kubernetes orchestration technology to help enterprises build modern workloads and accelerate their migration to the cloud. The company recently launched its Pivotal Spring Runtime for Kubernetes and is readying the Pivotal Application Service for Kubernetes. It also has collaborated with VMware in the past, including on the VMware Pivotal Container Service.
Both deals are expected to close by the end of January 2020. They were announced the same day VMware said that revenue for its second fiscal quarter grew year-over-year by 12% to $2.44 billion.
The Impact: VMware has worked to expand its reach in the industry beyond its virtualization roots. In the cloud space, the company’s portfolio includes the VMware Cloud Foundation platform, which includes vSphere, vRealize, vSAN, and NSX. And despite its history in VMs, VMware has embraced Kubernetes – with this year’s acquisition of Heptio, for example. It also has become a top-three contributor to Kubernetes. The addition of Carbon Black’s cloud security technology will be a boon for VMware’s MSP partners and systems integrators as they advise their customers’ cloud strategies.
Background: VMware has been rapidly adding to its portfolio through acquisitions. Earlier this month, the company reportedly bought serverless computing security start-up Intrinsic and network security vendor Veriflow. Earlier this summer, it bought Bitfusion and Uhana, both in the artificial intelligence (AI) world; cloud application delivery vendor Avi Networks; and Bitnami, another container- and Kubernetes-focused business.
The Buzz: “Building on another solid quarter, we’re thrilled about announcing our intent to acquire Pivotal and Carbon Black,” said VMware CEO Pat Gelsinger. “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.”
“We’re pleased with our strong financial performance in Q2, which reflected broad-based strength in all three geographies,” said Zane Rowe, executive vice president and CFO at VMware. “Our cloud strategy and strong hybrid cloud and SaaS growth will substantially accelerate as we bring Pivotal and Carbon Black into the portfolio.”
“We now have the opportunity to seamlessly integrate Carbon Black’s cloud-native endpoint protection platform into all of VMware’s control points,” Carbon Black CEO Patrick Morley said. “This type of bold move is exactly what the IT and security industries have been looking to see for a very long time. We look forward to working with the VMware team to continue delivering a modern security cloud platform to customers around the world.”
“The time is ideal to join forces with VMware, an industry leader who shares our commitment to open source community contributions and our focus on adding developer value on top of Kubernetes,” said Rob Mee, CEO of Pivotal. “VMware has a proven track record of helping organizations run and manage consistent infrastructure in support of mission-critical applications, and our two companies have already built a strong foundation on our successful VMware PKS collaboration.”