When Microsoft acquired Cloudyn last week, an Israeli startup that helps companies understand and optimize usage across clouds, it got more than just the technology and the employees, it purchased access to a treasure trove of valuable data.
That data could help Microsoft understand at a much more granular level how its customers are making use of its primary competitor's products and services, whether that's market leader AWS, Google or anyone else that Cloudyn supports in its dashboard.
As Microsoft's Jeremy Winter wrote in a company blog post announcing the deal, "As customers grow their cloud usage across many projects, it can be challenging to gain visibility and understand costs for existing projects, to optimize those investments and to project future usage." That's precisely what Cloudyn has been designed to do.
Perhaps that explains why Microsoft was willing to shell out the reported $50-70 million price. Of course, when you are a company with the resources of Microsoft with $126 billion in cash, you're not going to flinch at a deal under $100 million, and the acquisition gives them something with real value in a cloud context — lots of data.
Building versus buying
Companies like Microsoft make decisions all the time on whether to build or buy. The decision sometimes has to do with purely technical reasons. It's going to take a specific set of skills to build a particular piece of software and it's much easier to take out your checkbook and simply buy the talent and the technology.
Cloudyn certainly gives them that, but data has its own rewards these days. The more data you have, the better your algorithms work — and the deeper your understanding of a complex market. Say you want to understand how AWS pricing works. While there is general pricing information online, it's difficult to understand over time and across various projects. Cloudyn provides access to at least some of that data — and that's a start.
Cloudyn confirmed that it will continue to support multiple clouds, even after the acquisition, which is a smart approach on Microsoft's part. Limiting it to Azure would give it a product for customers to understand their usage on Azure, which in itself has value, but working across different cloud environments gives customers who use multiple clouds a single tool to understand their usage across vendors, while also giving Microsoft access to that valuable information.
Microsoft has taken an open approach in recent years when it comes to supporting rival products, understanding that it is no longer a homogeneous world and that customers want choices.
That openness, and this acquisition, should make it easier for Microsoft customers to take a multi-cloud approach, while owning Cloudyn gives Microsoft more insight into how customers are using rival platforms. From that perspective alone, it's a smart acquisition.
Photo: Heisenberg Media on Flickr. Used under CC by 2.0 license.