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Cloud Expo: Article

Red Hat Buys ManageIQ for $104 Million

It brings Red Hat the real-time cloud management and automation it lacks

Red Hat has bought itself a Christmas present - privately held ManageIQ.

It's paying $104 million in folding money for the pleasure of what appears to be a made-to-measure glove. The two seem to be a perfect fit. The deal might close by the end of the year.

Red Hat approached the six-year-old UK-based start-up around September when ManageIQ, already a Red Hat partner, was starting to look around for more money to finance a deeper plunge into the channel.

ManageIO says it's "channel-ready" now and eager to get out there and mix it up.

It brings Red Hat the real-time cloud management and automation it lacks. It's in the center of Red Hat's three hot buttons: Red Hat's KVM Enterprise Virtualization, CloudForms, Red Hat's hybrid IaaS solution, and OpenStack. It's got a hybrid cloud bias, which should suit Red Hat to a "T," since it's bet the farm on hybrid. And it says it can set up its tent in an enterprise and help coax the user off Red Hat's hereditary enemy VMware and on to Red Hat's cheaper alternative.

It can also, by the way, handle Amazon Web Services and Microsoft.

ManageIQ's co-founders CEO Albion Fitzgerald and chief product officer Joe Fitzgerald say they feel at home in Red Hat's culture and mean to stay there. The company will be handled at least initially as a free-standing subsidiary and all its distributed people representing, say, less than 100 folks will become Red Hat employees.

ManageIO can enable organizations to deploy, manage and optimize private clouds, virtualized infrastructures and virtual desktops.

It offers "unified by design" single-pane of glass solutions - built on it Adaptive Management Platform - that are supposed to be quick-to-deploy and easy-to-use, reducing the cost and complexity of enterprise clouds.

The stuff tightly couples provisioning with configuration, resource and workload automation.

It can provide integrated lifecycle management of activities such as server and storage provisioning, workload optimization, policy-based compliance, chargeback, virtual machine lifecycle management, discovery and control, and analytics across heterogeneous private clouds and virtualized datacenters. It's all scalable.

Red Hat said the acquisition would have no material impact on its fiscal year ending February 28. It expects operating expenses will increase by approximately $2 million a quarter and stock-based compensation and amortization expenses will increase by an equal amount.

The traditional management outfits reportedly can't do what ManageIQ can do. Legacy stuff ain't cloud-worthy. The acquisition, whose founders sold Novadigm to HP back in 2004, claims Fortune 1000 clients such as Pitney Bowes.

Supported integrations include ServiceNow, CA, Microsoft Systems Center, BMC, HP, F5 and NetApp, as well as RESTful and SOAP-based management Web Services.

Red Hat said "ManageIQ positions us deeper in the cloud management market which analysts estimate will be a $3 billion market by 2016."

Concomitant with the ManageIQ announcement, Red Hat released its fiscal Q3 numbers.

Revenue in the November quarter rose 18% to $343.6 million for an EPS of 29 cents. Analysts were modeling 29 cents on $338 million. Billings were $378 million, above the $372 million consensus.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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