UPDATED 16:30 EST / MAY 16 2019

Cloud dollars costs CLOUD

Apptio buys Cloudability as cloud cost-management market heats up

Apptio Inc., which makes software that helps companies get a tighter grip on their information technology expenses, has signed a deal to acquire Cloudability Inc., an eight-year-old startup that specializes in tracking costs across multiple clouds.

Terms weren’t announced, but Apptio said the acquired company’s specialty fits snugly into its existing Apptio Cloud Business Management service for hybrid IT management.

“Even though there are some minor overlaps, the two technologies have a lot of complementary features,” said Apptio Chief Executive Sunny Gupta. “The plan is to bring its best-of-breed capabilities to our customers.”

Cost accounting has been a growing area of concern for cloud customers as their use of cloud services expands along with the population of users. The difficulty of policing the use of cloud resources can lead to such wasteful actions as server instances being left running long after they’re needed or overprovisioning of resources.

“We see even smaller teams running tens of millions of discrete instances in a year,” said Cloudability CEO Mat Ellis. “When you scale that to a large enterprise, it’s something you can’t imagine.”

As a result, the big players have been getting on board. VMware Inc. purchased CloudHealth Technologies Inc. last summer and to add that company’s cost management capabilities to its growing multicloud lines. Flexera LLC picked up RightScale Inc. a few weeks later.

Apptio said Cloudability’s Financial Operations Platform manages more than $9 billion in enterprise cloud spending across the three major public cloud platforms. The Portland, Oregon-based startup has about 250 customers and has raised nearly $40 million, with its last funding round closing nearly three years ago. The company was beginning to wade back into the capital markets when Apptio called and “this was easily a better option than raising a Series C,” Ellis said.

Apptio said it plans to integrate Cloudability’s strengths in DevOps, including reserved instance planning, predictive forecasting and integration with popular workflow platforms. Gupta said the acquired company’s customers are also ideal candidates to upgrade to Apptio’s broader cost management features.

“Cloudability is where they start their cloud journey, but a natural extension of that is budgeting, forecasting, optimizing and benchmarking,” he said. “This is one of many acquisitions that relate to how we want to construct Apptio as a common system for managing all kinds of technologies.”

Founded in 2007, Apptio went public in 2016 and was taken private again last fall in a $1.94 billion acquisition by Vista Equity Partners LLC.

Cloudability co-founder J.R. Storment provided detail about how the company’s services work in an interview in February on theCUBE, SiliconANGLE’s video studio:

Image: Pixabay

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