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June 20, 2014

Wheelings & Dealings: Red Hat Acquires OpenStack Integrator to the Tune of $95 Million

Leading global IT network and service provider, Red Hat (News - Alert), has just finalized their intentions to purchase eNovance, the OpenStack systems integrator for the French national cloud, and Cloudwatt. The two companies have been working closely together since 2013, but this final takeover cements the relationship between the two companies, as Red Hat will be using their resources to deliver easy to deploy OpenStack Solutions. Through a combination of stocks and direct cash payments, the transaction is valued at around $95 million.

eNovance was founded six years ago in 2008, and ultimately became one of the leading contributors to Openstack, an endeavor to create a publicly accessible cloud storage space. In addition to Cloudwatt, eNovance includes groups like Ericsson and Cisco (News - Alert) among their customer base. About a year ago the company started working with Red Hat to aid customers that had subscribed to both companies, and to steer those customers toward participating in the OpenStack project. They had also forayed into network functions virtualization projects and embedded them into OpenStack in order to keep it up to date with the latest and greatest innovations in digital communication.

The agreement was split into both stocks and cash, with Red Hat paying approximately $68 million in cash, with the remaining $27 million being payed in Red Hat company stock. This acquisition will result in Red Hat's ability to leverage the eNovance network to deliver their own OpenStack solution to areas that were previously serviced by the company. Unsurprisingly, Red Hat also made an official statement saying it would not support Linux deployments of OpenStack that were not affiliated with Red Hat. The company had previously been working with a different integrator called Mirantis, but the companies have now severed ties and gone their separate ways, as Mirantis was aiming at delivering their own OpenStack distribution.


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