How CloudHealth Acquisition Could Drive VMware’s Cloud Business


Nov. 20 2020, Updated 3:36 p.m. ET

The deal to create new opportunities

VMware (VMW) bought start-up firm CloudHealth Technologies in October 2018. The acquisition provides multi-cloud management support to its customers across different cloud platforms like Amazon AWS (AMZN), Microsoft Azure (MSFT), and the Google Cloud (GOOGL) platform. It will help customers reduce costs and boost efficiency through proper cost management and cost analytics across multiple clouds. It also offers compliance and a secure environment for the different public cloud platform.

The acquisition could even help the company gain access to more than 3,000 CloudHealth clients like Yelp (YELP), Dow Jones, Zendesk, Skyscanner, and SHI. However, the financial terms of the deal were not disclosed.

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Other acquisitions targeting multi-cloud management platform

In February 2018, VMware acquired CloudCoreo to boost its security and manage workloads on the multi-cloud platform. VMware also bought VeloCloud, a start-up firm dealing with cloud-based wide area networks (WAN) in December 2017. The acquisition is allowing its clients to run, manage, connect, and secure any application on any cloud to any device.

Every organization is using different cloud computing technology. Moreover, the usage of public, private, and hybrid cloud technology further creates difficulties to switch workloads from one platform to another. Thus, to make things simple as well as to provide more flexibility to its clients, VMware is strengthening its multi-cloud management tools through new acquisitions.

The strong free cash flow is allowing the company to drive its cloud service through acquisitions. The graph above shows the free cash flow growth for VMware in the last five quarters.


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