- IBM is acquiring Kubecost to boost its FinOps capabilities
- One company exec said Kubecost's tools overlap with IBM's existing assets but in complementary ways
- The exec added IBM will likely hire more engineering talent in the near future to chase more FinOps opportunities
Cloud cost cutting is hotter than ever, and IBM is hoping its latest acquisition will position it as the go-to partner for enterprises. The tech giant scooped up Kubernetes-focused cost management platform Kubecost this week in a bid to strengthen its FinOps capabilities.
But if the reasoning behind the deal sounds familiar, that’s because it is.
As AvidThink Founder Roy Chua noted in an email to Fierce, Kubecost “complements but also overlaps” with existing IBM assets and capabilities. And, in fact, several of those assets were also recent acquisitions.
“IBM now has multiple assets that overlap — Kubecost, Apptio Cloudability, Turbonomic, and then on the automation/orchestration side Red Hat Ansible, Hashicorp Terraform, Pliant, Cloud Pak for Network Automation (CP4NA), all of which could benefit from their WatsonX AI technologies,” he noted. “That will have to be sorted out in time with clear positioning targeting different market segments and use cases.”
Indeed, IBM Apptio’s Chief Product Officer Eugene Khovostov acknowledged on a call with Fierce that there is overlap between Kubecost, Apptio and Turbonomic but insisted the assets are more complementary than redundant.
For instance, he said, Apptio offers capabilities to control technology spending – including across infrastructure, vendors, contractors and employees – but is focused on the cloud. Kubecost, in contrast, is laser focused on controlling Kubernetes container costs across environments – be they in the cloud or on premises. Put the two together and you have something much more comprehensive, especially for clients with hybrid environments.
And yes, Khovostov said, Kubecost has optimization capabilities to help enterprises save money, but those features will be more powerful when combined with, say, Turbonomics’ optimization automation tools.
Asked about whether the overlap will lead to layoffs, Khovostov said the opposite is actually true.
“Will there be rationalization of which particular component or microservice works better in one area or the other? Of course. But there is plenty of innovation work” to be done, he said.
“We’ll be keeping those folks around, and we’ll in fact probably be adding more engineering capacity in 2025 and beyond to this area.”
IBM will likely need the muscle. Chua noted that cloud cost control has become so important that Amazon CTO Werner Vogels gave a speech about the “Frugal Architect” at the company’s re:Invent conference last year.
“I'd expect the hyperscalers themselves to provide more and more tools in this space, along with the other cloud cost management vendors like Broadcom, Flexera, Morpheus Data, CloudZero and Virtana,” Chua said.
Putting the pieces together
Arun Chandrasekaran, Distinguished VP Analyst at Gartner, told Fierce that Kubecost will be most closely integrated with Apptio "for the simple reason that Apptio has mindshare with FinOps buyers." But he argued there are other business units within IBM that could also benefit from Kubecost's capabilities. Namely, IBM Consulting and Red Hat.
"Red Hat is in a large sense IBM’s container and Kubernetes provider and platform strategy and there are a lot of synergies they could explore between Red Hat and Kubecost," he said. "Red Hat is selling this very large, enterprise-grade Kubernetes platform, and I think the ability to upsell FinOps along with OpenShift with Kubecost is a tremendous opportunity for IBM."
And who might it upsell to? Chandrasekaran pointed to financial services, healthcare and other market verticals that tend to build their own software using container tools like Kubernetes.
Khovostov said integration is expected to be quick once the Kubecost deal closes. “We’re not talking years or quarters. We’re talking in 2025 people will see this come together,” he said.
But as Chandrasekaran noted "with any large company acquiring a small startup the challenge is always can they maintain that culture and innovate like a startup."
Open source plans
Chua pointed out the deal also raises questions about Kubecost’s continued participation in open source Linux Foundation initiatives, such as the OpenCost project. The market, he said, will be paying close attention to what IBM does on this front as well as with Hashicorp’s products once both deals close.
As far as Kubecost is concerned, Khovostov said IBM “absolutely” plans to continue to contribute to and invest in OpenCost.
“We believe in the open source approach and continuing to push that forward,” he concluded.