On Tuesday, IBM announced its acquisition of Kubernetes cost management solution, Kubecost. This acquisition follows a series of FinOps-focused companies in recent years with Apptio (TBM/FinOps), Turbonomic (FinOps/resource automation), NordCloud (FinOps services), and Instana (observability).
Answers To Your Top Questions About The Kubecost Acquistion
What should I know?
Kubecost enhances an already market-leading solution. In The Forrester Wave™: Cloud Cost Management And Optimization Solutions (CCMO), Q3 2024, IBM was named the leading solution in cloud cost management. The Kubecost acquisition strengthens an increasingly commoditized feature, container cost allocation and optimization. By joining the IBM FinOps portfolio, IBM will have the most complete cloud cost management solution in this market, especially as CloudHealth innovation is deprioritized under Broadcom.
Despite having the widest range of CCMO functionality, IBM isn’t generating thought-leading innovation in this space. Instead we see these in mostly newcomer vendors like Ternary for anomaly detection, Finout for its virtual tagging and open platform cost ingestion, Vantage for its network costing, Harness for its autostopping, and Cast AI for its Kubernetes pod spec optimization. These vendors are pushing what is possible in the cloud cost management space.
But perhaps IBM doesn’t need to fill that role. As the most complete CCMO solution on the market, IBM addresses the cloud cost needs of most major enterprises that need a stalwart multicloud management and optimization solution — the typical IBM clientele. Its capabilities enhance its consulting services in major enterprise accounts – and when needed, they can always enhance with these leading-edge point products.
What’s the impact on new and existing IBM/Apptio customers?
Although the company is working on different pricing models geared towards different payer levels, it raises the question of whether Kubecost will increase an already high price tag. It also brings about larger questions on IBM’s ability to integrate the separate products in its CCMO portfolio. IBM Apptio’s present work already involves the momentous task of merging Cloudability’s and Turbonomic’s codebases. Questions remain whether Kubecost’s codebase will factor into this merging. Or will it simply be an API integration or sold as a standalone solution? Given its diminished market share, a standalone solution seems like the least attractive option. If IBM can seamlessly integrate its multiple acquisitions into one solution, it could be the market de facto FinOps solution. But many questions remain on whether that is a realistic possibility. Whatever the outcome, IBM has a lot of work ahead.
Why was Kubecost looking to be acquired?
Simply put, Kubecost needed an exit plan after some momentum losses. After ceding leadership as the only Kubernetes cost management player in the space, acquisition was the only path forward. Major partnerships with Amazon Web Services (AWS) to build out its Elastic Kubernetes Service (EKS) cost monitoring capability and with Azure for its Azure Kubernetes Service (AKS) cost visibility generated excitement but was short-lived. Its open source project, OpenCost, launched with fanfare but had limited momentum. As new, and arguably stronger solutions like Finout, Vantage, CastAI, and Harness came on to the scene, Kubecost failed to compete in market share. It was time to get acquired – and it did.
