UPDATED 21:04 EDT / AUGUST 27 2018

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VMware buys CloudHealth to bulk out its nascent cloud services

While VMware Inc. was busy pushing its multicloud credentials with the announcement of a “digital foundation” of software and storage virtualization platforms, the company also made a notable acquisition designed to further that strategy.

The company on Monday said it’s acquiring CloudHealth Technologies Inc., which sells a “cloud operations platform” to help analyze the cost, performance, usage and security of computing environments across multiple public cloud platforms, including Amazon Web Services, Microsoft Azure and Google Cloud Platform.

VMware didn’t say how much it’s paying for CloudHealth, but Reuters nailed the price at around the $500 million mark. VMware expects the deal to close in the current quarter.

In a blog post, Raghu Raghuram, VMware’s chief operating officer of products and cloud services, said the idea was to combine CloudHealth’s platform with its Wavefront service and newly announced Secure State and Cloud Automation services. With that, VMware will be able to offer a comprehensive platform to manage all of its customer’s multicloud needs, Raghuram said.

“CloudHealth delivers benefits to our customers across cost management, resource optimization, granular visibility and reporting,” he wrote.

The executive explained that Wavefront is used to generate insights and analytics at scale for cloud-native applications, while Secure State, which was also announced Monday and is currently in beta, helps customers adhere to configurations and compliance requirements. As for VMware Cloud Automation, this provides “infrastructure-as-a-code” capabilities that help developers to build and deploy apps more easily.

Analyst Holger Mueller of Constellation Research Inc. said the acquisition was an encouraging sign in light of VMware’s overall cloud strategy, since previously it has simply resorted to putting its virtualization software out there in the public cloud, most notably with AWS.

“Multicloud is a reality for most enterprises, so acquiring assets is a jumpstart for VMware,” Mueller said. “Now we have to see what VMware will do with its new multicloud capabilities. There may be cases where CIOs want VMware, as their trusted partner for on-premises workloads, to advise on where to put that workload in the public cloud.”

VMware will also benefit from CloudHealth’s significant customer base that includes around 3,000 enterprises, including notable firms such as Yelp Inc., Dow Jones & Co., Skyscanner Ltd. and Zendesk Inc.

Image: Enterprise 2.0 Conference/Flickr

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