NetApp Inc. has said it’s selling a portfolio of its software assets to the cloud cost management specialist Flexera Software LLC.
Today’s announcement revealed that Flexera will acquire parts of NetApp’s Spot by NetApp and CloudCheckr products in a deal valued at around $100 million, Bloomberg reported, citing people familiar with the matter. The financial terms of the deal were not disclosed.
Bloomberg notes that the sale likely follows a decision by NetApp to streamline its business and double-down on its core operations, in line with a wider industry trend. It adds that global asset sales increased by 26% in 2024, rising to almost $555 billion.
Spot and CloudCheckr’s tools are used by companies to keep track of the cost of using different cloud computing services. In the case of Spot, it provides continuous automation, optimization and insights around customer’s cloud infrastructure investments, helping them to maximize their cloud resource usage.
NetApp bought Spot in 2020 for an undisclosed price, with reports at the time saying it paid in excess of $450 million.
Flexera specializes in cloud service orchestration, policy management and cost optimization tools. As such, managing cloud environments is its core business, which may make it a better fit for Spot.
In contrast, NetApp is more focused on providing unified data storage that spans cloud and on-premises data center environments. It has some big ambitions to create an intelligent data infrastructure to support generative AI workloads. In addition, it also sells data center hardware based on all-flash storage systems.
NAND Research Inc. analyst Steve McDowell told News that when NetApp acquired Spot almost five years ago, it was focused on building a cloud operations business.
“Since that time, NetApp has refined its cloud strategy and today it’s more focused on bringing ONTAP to the public cloud, and it has been one of the more successful cloud storage stories in the industry,” the analyst said. “NetApp is no longer trying to be in the cloud operations business, so that made Spot an awkward fit.”
The only slight downside to the deal for NetApp is the reported price it received for Spot.
“We don’t know what NetApp’s revenue from Spot was over the past five years, so it’s impossible to know if it broke even,” McDowell added. “I suspect it didn’t, but the sale is still a much better option than just shutting the business down.”
Flexera Chief Executive Jim Ryan said the acquisition of Spot will improve its ability to “tackle the proliferation of hybrid cloud cost and usage challenges across public cloud, data centers, SaaS and even AI.”
“Acquiring Spot gives Flexera a stellar set of mature cloud FinOps capabilities that it can quickly deploy to its customers,” McDowell said. “It’s a great acquisition for the company, adding new capabilities that give it a really comprehensive set of features for its customers.”
Investors seemed to approve of the sale, with NetApp’s stock closing the day up 1.5%, giving it a market capitalization of around $24 billion. In the last year, its stock has grown 35%.
Flexera is a privately-held firm that was acquired by the equity firm Thoma Bravo LLC in 2020. TA Associates LLC and the Ontario Teacher’s Pension Plan Board are also said to hold minority stakes in the company.
Image: News/Meta AI
Your vote of support is important to us and it helps us keep the content FREE.
One click below supports our mission to provide free, deep, and relevant content.
Join our community on YouTube
Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.
THANK YOU
