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Red Hat tries CoreOS on for size – and buys

Open-source firms hook up for $250m

Enterprise Linux biz Red Hat on Tuesday said it has reached an agreement to acquire CoreOS, a maker of open source container software, for $250 million.

CoreOS, a 130-person San Francisco company founded in 2013 by CEO Alex Polvi and CTO Brandon Philips, makes Tectonic (an enterprise-oriented Kubernetes platform), Quay (an enterprise-oriented container registry), Container Linux (Linux tuned for containers), and etcd (a distributed data store for Kubernetes), among other things.

Kubernetes, for those who have managed to avoid it, is a Google-spawned open source project that has become more or less the standard for orchestrating the deployment and oversight of large numbers of software-based containers.

The elder open source software biz sees the younger firm's technology helping it automate and simplify its OpenShift container app platform, as well as improving its security and application portability in hybrid cloud environments.

Red Hat says it will provide more details about how CoreOS products will be handled in the months ahead. It characterizes them as complementary to its own wares, althugh its plans may involve "integrating products and migrating customers to any combined offerings" at some later date.

We take that to mean Tectonic will eventually be folded into OpenShift, but don't take our word for it.

Polvi, in a phone interview with The Register, was non-committal on the subject but emphasized that Tectonic and OpenShift are highly differentiated enterprise products, indicating that they could be expected to remain so for a while.

In a statement, Red Hat president of products and technologies Paul Cormier suggests Kubernetes and Linux will be central to the combined company as container technology continues to spread across public, private, and hybrid cloud environments.

And he notes that both Red Hat and CoreOS have made significant contributions to open source projects like Kubernetes that are changing the way computing resources get managed and deployed.

"We believe this acquisition cements Red Hat as a cornerstone of hybrid cloud and modern app deployments," he said.

Ashesh Badani, VP and general manager of OpenShift at Red Hat, during the phone interview, said, "This will essentially help us double-down on investments we've made so far."

Matt Hicks, SVP of engineering at Red Hat, said he hopes one of the outcomes of the acquisition will be getting customers to where they can actually operate a Kubernetes environment as a simple cloud service.

Forrester analyst Dave Bartoletti told The Register that he thinks the deal is great news for CoreOS and for the Kubernetes market in general.

"I don’t think the industry needed another Kubernetes-based container automation platform," he said, in reference to Tectonic. "Now that every major cloud development platform provider offers managed Kubernetes, how was CoreOS going to monetize its own?"

Bartoletti said Red Hat has already demonstrated that it can make money off open source and made the shift to Kubernetes three years ago.

"I expect Polvi and team will mainly continue to do what they already do well: contribute to and set the direction of the major open source technologies that will power the next generation of container-based apps – a market that’s set to double in the next 18 months," he said. ®

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