VMware, Inc. (NYSE:VMW) has purchased Plumgrid’s intellectual property in a bid to enhance its software-defined networking and container strategy. This was announced in an online posting by Pere Monclus, Plumgrid’s co-founder, and chief technology officer. Some of Plumgrid’s employees will also be joining VMware.
“Our technology and IP have been acquired, and many of our employees have joined a new team,” wrote Monclus in the blog post regarding the deal that is understood to have closed in Mid-December.
Looking for a buyer
Though the terms of the deal were not disclosed, it is understood that Plumgrid had been shopping around for a buyer for quite some time. The firm was founded in 2011 and during its existence it had raised around $29 million from venture capital investors. The most recent equity round was in July 2014 where it raised a little more than $16 million.
Started by a group of engineers from Cisco Systems, Inc. (NASDAQ:CSCO) who had worked on some of the most important technologies by the network giant, such as Nexus 7000 and Catalyst 6500 switches, the firm tried to carve a niche for itself in the software-defined networking (SDN) segment. But when Cisco launched its own SDN product, it floundered as the competition was reduced to mainly a two-horse between Cisco and VMware.
Cloud operating system
After the failure of its SDN product, Plumgrid embarked on developing an operating system for the cloud. This was meant to compete with Amazon.com, Inc. (NASDAQ:AMZN) Web Services but it didn’t quite make a mark even as Amazon flourished in that segment.
But to its credit, some of Plumgrid’s technologies are still in use. An example is the IO Visor a networking technology that assists in the management of computer networks that are software-based. IO Visor has since become an open-source project of the Linux Foundation and is now also a part of the Linux OS kernel.
In acquiring Plumgrid, VMware will find a natural fit due to the heavy investments it is already making in security, OpenStack IP, and network virtualization. Besides Plumgrid, the Dell-owned VMware has also bought out other startups focused on technologies similar to what its latest acquisition has been working on. This includes Nicira.
In Tuesday’s trading, shares of VMware rose by 0.59% to close the day at $81.86.
