Behind the Deal: Under VMware, CloudHealth Aims to Be Household Name

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become a bigger independent player? “Time will tell,” Axbey responded, although he seems to like his chances with the new parent company.

“Our plan is to go into VMware and be the centerpiece of their cloud strategy,” Axbey said. “We think it’s a huge accelerant for the company.”

Axbey cited the additional resources VMware will provide, including a larger global reach and a deeper bench of customers and partners. The Palo Alto, CA-based company, which sells virtualization software and cloud tools and services, generated $7.9 billion in revenue last year and turned a profit of $570 million. As of this writing, it has a market cap of nearly $63 billion.

One of the important pieces of the deal is that CloudHealth will operate as a VMware division and keep its brand name, CloudHealth executives said. “We stand a chance of being a household name [in] computing,” Axbey said.

But achieving that will likely require strong business execution and staying ahead of the technology curve. In the coming years, one of the focuses for CloudHealth’s engineers will be developing machine learning tools and related technologies aimed at automating more of the “optimization” of businesses’ cloud operations, Kinsella said.

“We want to free enterprises of the heavy lifting of managing workloads and applications [so they can] focus on their business services,” Kinsella said.

Dan Phillips

For Phillips, a veteran of five startups, a key takeaway from CloudHealth’s exit was that the founders had worked together for years, mostly in IT infrastructure management, and had surrounded themselves with an “ecosystem” of expert partners. Much of what CloudHealth’s founders learned in previous technology cycles has been “so valuable” in the cloud era, even though the tools and market have evolved, Phillips said.

“You want to pick an area of domain expertise, and you want to stay with it and ride that for your career,” Phillips said. It’s going to “recreate itself over and over and over. There’s no need to do something different—it’s going to completely change anyway.”

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Jeff Bauter Engel is Deputy Editor, Tech at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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