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The Real Reason Red Hat Is Acquiring CoreOS

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The Real Reason Red Hat Is Acquiring CoreOS

Last week, enterprise open-source leader Red Hat announced it was acquiring CoreOS. But maybe the acquisition isn't for the reasons you think.

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Last week, enterprise open-source leader Red Hat announced it was acquiring CoreOS, an up-and-coming player in the red-hot container marketplace.

Superficially, the motivation for this deal is straightforward: Red Hat needs to round out its container story, and CoreOS fits the bill.

However, as with most of the enterprise infrastructure market, the vendor’s motivations are more complex – as is everything else about the world of containers.

Some might even say that complexity is the point.

Making Containers Enterprise-Ready

Since Docker, Inc. brought containers to the forefront of enterprise infrastructure software innovation back in 2014, the community of both vendors and enterprise developers have been struggling to implement containers in true enterprise scenarios.

Among the missing pieces: container orchestration and container management. Orchestration provides companies with the ability to deploy containers at scale, handling the ins and outs of the elastic scaling essential to the container value proposition.

Management complements the orchestration value proposition, providing visibility and control into orchestration environments as well as added security and other capabilities essential for running containers at the enterprise level.

Leading the container orchestration charge is Kubernetes, an open source effort largely out of Google. Docker has its own orchestration tool dubbed Swarm, but Kubernetes has the edge in terms of product maturity, and has established itself as the leader via an increasingly robust open source ecosystem.

Kubernetes, however, does not directly address the complexities of container management – and it’s this niche that CoreOS sought to fill with its Tectonic product. “Tectonic combines Kubernetes, the leading container management solution, with everything needed to run containers at scale,” explains the CoreOS Web site. “That means the best open source components, battle-tested security systems, and fully automated operations. Tectonic is enterprise Kubernetes.”

The Complexity Challenge

If the layers of technology necessary for containers to meet enterprise requirements sound complex, you’re correct – and containers’ complexity is itself an area of some controversy. “Unlike the platform itself, the routine pre-requisite tasks needed to build a Kubernetes cluster are complex and hard,” says Rob Hirschfeld, CEO and cofounder of RackN. “Multi-node operations [are] hard: that’s why we want platforms like Kubernetes.”

Kubernetes, however, doesn’t make containers any less complicated. “The truth is that Kubernetes is complex. It can be a challenge to get up and running — there’s no denying it. But this very complexity means that there’s an argument to be made in its favor,” says Matt Rogish, Founder at ReactiveOps. “[Amazon] ECS and Docker Swarm seem simpler on the surface, but they both have more accidental complexity — and they foist that complexity onto you,” he continues. “Kubernetes, in turn, has low accidental complexity and high essential complexity (the complexity needed to achieve the things you actually want to achieve).”

The addition of a container management layer like CoreOS Tectonic to Kubernetes doesn’t reduce its complexity, either. Rather, it helps organizations manage it. “The next era of technology is being driven by container-based applications that span multi- and hybrid cloud environments, including physical, virtual, private cloud and public cloud platforms,” explains Paul Cormier, President of Products and Technologies at Red Hat. “We believe this acquisition cements Red Hat as a cornerstone of hybrid cloud and modern app deployments.”

Complexity Déjà Vu: OpenStack

Open source enterprise infrastructure software of enormous complexity is nothing new, of course. Take OpenStack, for example. This private cloud infrastructure initiative has so many moving parts and such a diverse, crowded ecosystem that it has earned a reputation as being extraordinarily complicated and difficult to work with. “The reality is that all multi-node clusters suffer from the same complexity problem. We’ve heard the same thing about OpenStack for years,” RackN’s Hirschfeld says.

Much of the attention directed at OpenStack over the last few years has thus predictably shifted to Kubernetes and the rest of the container community – and today, OpenStack has become part of the complexity that technology like CoreOS Tectonic must manage. “Tectonic is the universal Kubernetes solution for deploying, managing and securing containers anywhere and will unite the benefits of OpenStack with the container-based tooling of Kubernetes,” according to the CoreOS Web site. “With CoreOS by your side, OpenStack will be easier to manage and deploy using the best of container infrastructure.”

The CoreOS Web site continues: “OpenStack has a reputation for complexity that can sometimes rival its power. Kubernetes cluster orchestration makes OpenStack much easier to deploy and manage.”

For Red Hat, OpenStack’s complexity is a problem it can help solve for its customers. “Containers enable application portability across the hybrid cloud, so today customers are deploying their applications in different footprints: in public clouds like Amazon, Azure, and Google, on-premises on platforms like VMWare and OpenStack, but also on bare-metal servers,” explains Joe Fernandes, Red Hat’s Senior Director of Product Management at OpenShift. “What we’ve been doing with OpenShift and with our investment with Kubernetes and containers is building that abstraction so that applications can be deployed efficiently across all these footprints.”

Alex Polvi, CEO of CoreOS, puts a finer point on this topic. “By running OpenStack as an application on Kubernetes we will be able to pull together the entire data center into a single platform that has been proven by hyperscale giants,” Polvi says.

Red Hat’s Open Source Strategy

Red Hat’s business model centers on support and services for essentially free open source software. Yet, while CoreOS built its technology on open source, Tectonic also includes proprietary code as well. “We wanted it to be really clear that CoreOS is all about open source projects and collaboration, even if that means our competitors can compete with us, that we took major effort in keeping the two brands separate,” explained Kelsey Hightower back in 2015, when he was Developer and Advocate at CoreOS. Hightower is now Staff Developer Advocate at Google. “There is coreos.com for ‘Open Source Projects for Linux Containers,’ and tectonic.com that combines those projects in a commercial offering. There are some non-open bits in the commercial offering, but they don’t conflict with the opensource projects.”

For its part, Red Hat has been a major contributor to the Kubernetes effort all along. “Red Hat was early to embrace containers and container orchestration and has contributed deeply to related open source communities, including Kubernetes, where it is the second-leading contributor behind only Google,” the company explains in a press release. “Now with the combination of Red Hat and CoreOS, Red Hat amplifies its leadership in both upstream community and enterprise container-based solutions.”

As to whether Red Hat will open source the bits of Tectonic that are currently proprietary, the vendor plays its cards closer to the vest. “Most of CoreOS’s offerings are already open source today,” explains a Red Hat FAQ. “Red Hat has long shown its commitment to open-sourcing the technology it acquires when it is not open source, and we have no reason to expect a change in this approach.”

Putting the Pieces Together

As an open source vendor, Red Hat doesn’t make money from intellectual property in its software – and thus, the value of CoreOS’s IP has little to do with the acquisition.

This story, in fact, is more about people – not simply the 130 people at CoreOS, although in many ways this deal is an ‘acquihire’ – but also leveraging Red Hat’s team of professionals to provide an increasingly comprehensive services offering to its enterprise customers.

Competitively, this deal is less about IBM and Oracle, Red Hat’s traditional competitors, and more about positioning it against Docker, Inc. “Their union to me signifies a merger of talent…that strengthens Red Hat’s presence in the enterprise market of OpenShift Enterprise against Docker’s Docker Enterprise Edition,” explains Will Kinard, CTO of BoxBoat.

OpenShift is Red Hat’s Platform-as-a-Service offering – and it’s likely that some of the CoreOS technology and human expertise will find their way into the OpenShift product and the OpenShift team at Red Hat, respectively.

Janakiram MSV from Janakiram & Associates and fellow Forbes contributor agrees. “In the enterprise segment, Red Hat is one of the key competitors of Docker, Inc.,” Janakiram explains. “This acquisition puts pressure on Docker, Inc, which has raised over $240 million of funding from a variety of investors. It has to move fast in acquiring enterprise customers to drive adoption of its commercial products.”

For Red Hat’s customers, however, the battle is over talent – a pattern that both OpenStack and Kubernetes have followed in turn. “Customers didn’t have OpenStack expertise, they knew they wanted it,” says Jon Keller, Field CTO for Technologent. “Kubernetes is the same. It’s such a good fit because they literally aren’t going to be able to hire enough people to do it themselves.”

The fact that the container ecosystem is so complex, therefore, is actually a plus for Red Hat – especially within the context of hybrid IT, which adds additional layers of complexity. “We believe this acquisition cements Red Hat as a cornerstone of hybrid cloud and modern app deployments,” Red Hat’s Cormier concludes.

In the final analysis, Red Hat’s customers should come out the winners. “We think our largest customers will benefit from this,” adds Red Hat VP and General Manager Ashesh Badani.

The addition of the CoreOS technology and team to Red Hat’s already extensive expertise with Kubernetes, in the overall context of hybrid IT, gives it perhaps the most credible and comprehensive modern enterprise infrastructure today. As the entire container ecosystem matures, Red Hat’s dominance should only get stronger.

Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, IBM, Microsoft, and VMWare are Intellyx customers. None of the other organizations mentioned in this article are Intellyx customers. 

Originally appeared at Forbes.com.

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Topics:
cloud ,red hat ,coreos ,acquisitions ,kubernetes ,container ,open source ,tectonic

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