Dell Grabs Cloudify on the Sly

Dell Technologies (NYSE: DELL) quietly acquired cloud DevOps orchestration and automation startup Cloudify last week in what appears to be a bid to bolster Dell’s growing roster of business infrastructure solutions.

Dell kept the acquisition a virtual secret, only acknowledging the deal to TechCrunch on January 25, after the pub noted Dell’s SEC paperwork related to the sale. Terms were not disclosed, though TechCrunch cited sources as claiming Cloudify is worth $70 million to $100 million – not bad for a company that raised just an estimated $7 million since its founding in 2016. (Investors include BRM Group, Claridge Israel, FTV Capital, Intel Capital, and KPN Ventures.)

Cloudify offers a product it calls environment-as-a-service (EaaS), comprising subscription-based software that integrates with Infrastructure as Code (IaC) tools such as Ansible, Terraform, and Azure ARM – along with a range of other management tools – to create a consolidated interface through which DevOps teams can orchestrate and manage changes to IT infrastructure. Customers include AT&T, DHL, and Morgan Stanley. Technology partners include AWS, Microsoft, ServiceNow, and Jenkins.

Cloudify, based in Herzliya, Israel, with offices in New York, was founded by Nati Shalom, who is now its CTO. Prior to Cloudify, Shalom in 1999 founded and was CTO of GigaSpaces, which uses in-memory data stores to accelerate applications in a manner reminiscent of Futuriom 50 company Hazelcast. Shalom left GigaSpaces for Cloudify in 2017, according to his LinkedIn profile.

It’s not known whether Shalom or the rest of the executive team at Cloudify will move to Dell, but given Shalom’s entrepreneurial bent, it’s seems unlikely he’ll sign on.

What Will Dell Do with Cloudify?

Beyond the basics of the acquisition, it’s intriguing to guess what Dell might do with Cloudify. It's clear that Cloudify will become part of Dell’s Infrastructure Solutions Group (ISG), where storage, servers, and networking solutions are sold to enterprise customers. (Dell’s other segment, the Client Solutions Group (CSG), includes PCs, monitors, thin clients, and the like.)

In Dell’s latest earnings quarterly report on November 21, 2022, the ISG delivered revenue of $9.6 billion, up 12% year-over-year; the larger CSG posted revenue of $13.8 billion, down 17% year-over-year.

Speculation about how Cloudify will fit into Dell has focused on additions to Dell’s APEX series of services for compute and HCI, storage, security, and custom cloud services. It’s also likely Cloudify will be added to Dell’s DevOps solutions series.

Whatever the outcome, Dell’s purchase of Cloudify seems a smart move that could boost the functionality of its ISG offerings, which are clearly a focal point of the vendor’s strategic plans.