Advanced Computing in the Age of AI | Tuesday, October 3, 2023

Microsoft Buys Cloud Cost Manager 

As more enterprises struggle with their cloud migration, tool vendors are emerging to manage the transition along with the cost and complexity that many enterprise cloud adopters underestimate.

As it competes for hearts, minds and enterprise IT budgets with market leader Amazon Web Services (NASDAQ: AMZN), Microsoft announced an acquisition this week of an existing cloud partner whose tools are designed to ease the cloud transition and boost return on the investment.

Microsoft (NASDAQ: MSFT) said Thursday (June 29) it will acquire Israeli cloud startup Cloudyn, which currently supports Microsoft Azure as well as AWS, Google Cloud (NASDAQ: GOOGL) and OpenStack deployments. Terms of the deal were not disclosed, but the web site reported the sales price was between $50 million and $70 million.

Cloudyn offers cost-tracking services such as managing billing across different clouds. The move signals Microsoft's strategy of focusing on the shift to multi-cloud deployments as a way of avoiding vendor lock-in.

Founded in 2012, Cloudyn promotes its cloud management service as a suite of tools designed to "continuously monitor, measure and analyze consumption, enable accountability and forecast future cloud spending," according to Cloudyn CEO Sharon Wagner.

"This acquisition fits squarely into our commitment to empower customers with the tools they need to govern their cloud adoption and realize the strategic benefits of a global, trusted, intelligent cloud," Jeremy Winter, director of program management for Microsoft Azure, added in a blog post announcing the deal.

Based in Tel Aviv, the startup's tools allow customers to gauge and analyze cloud consumption in order to forecast future cloud spending. "Cloudyn customers have been able to optimize their cloud services usage and costs through automated monitoring, analytics and cost allocation," Winter noted. Among those clients is Hewlett Packard Enterprise (NYSE: HPE).

Observers said the deal could open the door to cloud analytics services such as recommendation tools based on machine learning for comparing cloud offerings.

Those capabilities are growing in importance as cloud adopters struggle with what one market watcher calls "cost complexity" as enterprises implement hybrid and multi-cloud strategies. Forrester Consulting reported earlier this month that less than 40 percent of the companies it polled met or exceeded their goals for both migrating to the cloud and controlling costs. The majority said migration costs associated with running IT infrastructure in the cloud were higher than estimated.

"Most firms today underestimate costs associated with cloud usage and migration," the market watcher added.

Along with Azure, Cloudyn's cost-tracking tools also run on application container platforms, including the AWS container service and Docker. The startup has emphasized agile container platforms as a "cost-effective alternative" to virtual machines for hosting distributed applications.

Microsoft said Cloudyn's cloud services would be folded into its Azure cloud management, security and data governance portfolio.

The software giant added closing the Cloudyn acquisition is subject to subject to regulatory review.


About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).