With $500m purchase of CloudHealth, VMWare looks for a brighter future

Dell subsidiary VMWare bought CloudHealth’s multi-cloud platform for $500m to cater to clients using several clouds

August 28, 2018

VMWare, a software subsidiary of Dell, bought Boston-based startup CloudHealth for $500m. 

CloudHealth, which provides multi-cloud management software, will give VMWare the flexibility to cater to large enterprise companies that don’t store all of their business in a single cloud.

Everyone has got their head in the clouds…

More large businesses are shifting data off their own servers and onto large public clouds hosted by Amazon, Microsoft, and Google. 

But since 91% of enterprise businesses distribute data across more than one cloud, many companies struggle to make sense of data that is stored across different platforms.

That’s where CloudHealth comes in: It provides multi-cloud management software that makes it easier to transfer information back and forth, manage costs, and maintain consistent security.

Staying on top of the cloud (management industry)

As a company that offers a wide variety of services (desktop, server, and cloud management software; storage; application management) to a wide variety of companies, VMWare needs to make sure that it can serve businesses regardless of their cloud status.

In this deal, VMWare not only gets CloudHealth’s 3k lucrative clients (Dow Jones, Yelp, Pinterest), but it also gets the toolkit it needs to offer existing clients better support as they float between their several clouds.

With this CloudHealth purchase, VMWare cements its lead in the cloud systems management industry (separate from the cloud storage industry, which Amazon dominates). VMWare currently holds 21% of the $5.4B market, followed by Microsoft with 14%. 

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