Red Hat continues OpenStack push with latest acquisition

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OpenStack holds the promise to provide a common cloud standard across on- and off-premise environments that is both simpler and more scalable than current data center architectures, and provides an alternative to Amazon AWS. But for the CIOs in the trenches, the sheer effort required to set up the platform creates deployment headwinds. As a result, more organizations are turning to outside help from services organizations, a trend that is only expected to accelerate as the project gains wider recognition in the corporate world.

To capitalize on the growing demand for professional services in the OpenStack ecosystem, Red Hat is acquiring eNovance, a French implementation specialist that currently ranks as the only European member of OpenStack Foundation to have achieved Gold status. The deal, which is valued at roughly $95 million in cash and stock and is expected to close later this month, builds on an extensive strategic partnership between the two firms that was announced last November. It also comes less than three months after the Linux distributor shelled out $175 million for Inktank, a startup founded by the developers of the Ceph software-defined storage component of OpenStack to commercialize the technology.

Established in 2008 by three former Linkbynet employees, eNovance started out managing web applications for enterprises and eventually branched off into helping telcos and other large tech-savvy organizations set up their OpenStack environments. That move paid dividends, with the firm now boasting nearly 200 clients including Cisco, Alcatel-Lucent, Ericsson and Orange.

The company’s services span the entire implementation lifecycle, according to its website, from the initial assessment phase to the process of tailoring the cloud platform to meet the specific needs of the customer and then rolling it out.  It also offers training and support as well as a reference architecture called Accelerator Pod that was developed as part of its partnership with Red Hat with the goal of delivering a scalable data center module that can be tweaked based on the intended workload.

For Red Hat, the acquisition kills two birds with one stone. First and foremost, bringing eNovance into the fold puts it in a better position to monetize OpenStack with a more comprehensive consultancy offering. And second, the deal buys it an expanded foothold in Europe, which has historically trailed behind the U.S. in technology adoption but is nonetheless witnessing rising interest in the cloud platform.

Red Hat has been expanding its total available market beyond Linux (e.g. into storage) and is now positioning itself as a major OpenStack player. The acquisition of eNovance appears to be a move to solidify Red Hat’s position in the Open Stack market, especially in Europe. The company has been criticized by partners for not certifying OpenStack solutions that don’t use the Red Hat Linux distro. Red Hat has publicly stated that it will provide support for any customer using its Linux distribution but has been reticent to commit to full certification for non-Red Hat Linux-based OpenStack solutions.

The sands of “the cloud” are shifting and OpenStack seems to be elbowing its way into the enterprise with Red Hat as an early contender.

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