Red Hat Is Buying IT Automation Startup Ansible, For $150M

Next Story

Klook, An App For Booking Travel Activities Across Asia, Raises $5M

Open source giant Red Hat is making another acquisition to build out its enterprise IT portfolio: today the company announced that it would buy Ansible, an IT automation solutions specialist that helps companies build and manage hybrid IT deployments across the cloud and on-premise solutions.

The acquisition had been rumored to be in the works for a price of over $100 million but a source very close to the deal tells us that the price is close to $150 million. Officially, Red Hat is declining to disclose the price of the deal, which should close this month; but we’ve been told that while Red Hat was very aggressive in trying to close this deal, others were starting to approach the company as well.

The price is a great return considering that Ansible, based out of Santa Barbara and founded in 2013, had raised a mere $6 million, mostly from Menlo Ventures and partner Doug Carlisle with also an investor.

Ansible has made a name for itself as a specialist in OpenStack clouds — earlier this year it spearheaded a partnership with Cisco, HP, CSC and RackSpace in aid of this. Red Hat’s acquisition of Ansible is the company’s signal of how it hopes to expand further into OpenStack itself, as part of its wider ambitions in hybrid cloud management, OpenStack and containers.

Specifically, the acquisition will help Red Hat build up its offerings for dev ops and the growing trend of developers being able to quickly write code or updates to existing code and deploy it quickly and frequently — a common practice among tech companies like the Twitters of the world and now becoming more common with other businesses.

“Anible is very good at providing a way to automate that,” Carlise at Menlo said, saying this was part of the rationale for Red Hat being interested. 

“Ansible is a clear leader in IT automation and DevOps, and helps Red Hat take a significant step forward in our goal of creating frictionless IT,” said Joe Fitzgerald, VP at Red Hat, in a statement.

“We’re thrilled that Red Hat, a global leader in open source, has chosen Ansible to tackle the future of IT automation and systems management. This is a strong validation that Ansible’s simplicity, enterprise customer base and robust community is winning in enterprise IT automation, from compute to networking to cloud to containers,” said Saïd Ziouani, co-founder and CEO, Ansible, in a statement.

You can read more about Red Hat’s acquisition rationale here. But as our own Frederic Lardinois has pointed out, OpenStack is complex and what Anisble is trying to bring is a simplified approach to the architecture.

Ansible is known for being among the generation of IT platforms that does away with a lot of the technicalities of deploying code, where you can nearly command in “English,” as one person described it to me.

“Unlike competing solutions [Ansible] does not require any special coding skills, removing some of the most significant barriers to automation across IT,” Red Hat noted in its announcement of the acquisition.

Areas covered by Ansible’s tech include the ability to deploy and manage applications across private and public clouds; speed service delivery through DevOps initiatives; streamline OpenStack installations and upgrades; and accelerate container adoption by simplifying orchestration and configuration, Red Hat said.

Red Hat today also provided a brief update to its earnings as part of the news. It says the acquisition is expected to have no material impact to Red Hat’s revenue for the third and fourth quarters of its fiscal year. Non-GAAP operating expenses for fiscal 2016 will be increased by $2 million, or ($0.01) per share, in Q3 and $4.0 million, or ($0.02) per share, in Q4 as a result of the transaction.

Red Hat went public back in 1999 and this is its 14th acquisition.