IBM adds to FinOps arsenal as cloud competition winds change
IBM broadens its multi-cloud and hybrid cloud FinOps support with its acquisition of Kubecost, as its AI infrastructure strategy diverges from VMware's under Broadcom.
IBM's acquisition of FinOps player Kubecost this week could deepen its cost management features in multi- and hybrid cloud environments as generative AI adoption and competitive shifts alter the IT infrastructure landscape.
IBM already has multiple FinOps products in its Cloudability portfolio, including Turbonomic, acquired in 2021, and Apptio, acquired in 2023. That product line supports some cost management reporting on Kubernetes environments using metrics delivered through cloud APIs such as information about energy consumption and sustainability. But Kubecost, founded in 2019, can glean resource usage details via Kubernetes APIs on any infrastructure where containers are deployed, according to Eugene Khvostov, chief product officer at IBM Apptio.
"We are seeing increased adoption of multi-cloud, hybrid cloud and a mixture of underlying infrastructure," Khvostov said. "[Kubecost] recognized that [trend] early and is able to solve for that need to understand who's consuming resources, irrespective of what those resources are."
IBM's Red Hat OpenShift has its own cost management tool, but Kubecost could be a complement to that side of the business too, said Rob Strechay, an analyst at TheCube Research.
"IBM needs something that, when combined with the Turbonomic acquisition, can be used more broadly than just on OpenShift," Strechay said. "FinOps and the cost of cloud is a huge thing, especially on the IBM Consulting and IBM Cloud side."
With those businesses, IBM has emphasized environmental sustainability amid the growing generative AI trend, where Kubecost could also be a good fit, according to Khvostov.
"What we're seeing is in things like training AI models and other workloads, [customers] want them to be portable," he said. "[They] want to be able to run them on different types of infrastructure, sometimes based on cost efficiency, sometimes based on other elements like performance."
Kubecost, a small company, satisfied customers but struggled with growth, according to Jon Brown, an analyst at TechTarget's Enterprise Strategy Group.
"Kubecost has a lot of happy customers and they've been pioneers in Kubernetes cost management and optimization," Brown said. "[But] it was a poorly kept secret that Kubecost was looking for a buyer."
Among Kubecost's customers is Accrete, an enterprise AI company based in New York, whose CISO told TechTarget Editorial last month that Kubecost reduced the company's AWS spend by 40% to 45%, which is expected to amount to more than $1 million in savings this year.
Brown called this week's acquisition for an undisclosed amount "a smart tuck-in for IBM," but speculated that customer acquisition was the motivating factor for the deal, rather than unique product features.
Khvostov said IBM does anticipate reaching a different audience through Kubecost than the one it has catered to with its other FinOps tools.
"Apptio has historically had a strong position … with finance and IT [executives]," he said. "Kubecost has a tremendous amount of traction with the developer community."
Kubecost competitors include CloudZero, Yotascale, Morpheus, Cisco's Replex, Cloud Ctrl, Cast AI, Ceeview, Pepperdata and Harness.
VMware and IBM choose sides on hybrid cloud
A multi- and hybrid cloud focus for IBM and its subsidiary Red Hat aren't new, but it now puts those companies more starkly at odds with VMware under Broadcom, which emphasizes private cloud, including and especially for AI workloads.
"If you add all of the pieces together -- Ansible, OpenShift, HashiCorp, all of the FinOps portfolio -- the sum of those parts, if IBM gets it right, is significant in a post-VMware Cloud Foundation world," said Steven Dickens, an analyst at Futurum Group. "The question is, are people looking for this kind of holistic cloud orchestration layer that is independent of the hyperscale cloud provider? As VMware gets closer to private cloud, IBM's going the other way."
Like other industry watchers, Dickens said he doesn't expect a short-term mass defection from VMware, but angst over the changes to the company and its pricing under Broadcom could mean some companies phase it out longer-term.
"[Users] can stay on VCF but also be saying, 'That's not going to grow, we'll grow something else alongside it,' and that's the opportunity that IBM and Red Hat have got to go capture," he said.
Integrating all of its separate products into a multi-cloud automation fabric will be a huge undertaking for IBM, Dickens said, especially as it brings HashiCorp into the fold alongside overlapping products with Red Hat.
"If IBM can stitch all those assets together into a holistic whole and then simply articulate it, that's powerful," Dickens said. "But it's not easy."
Beth Pariseau, senior news writer for TechTarget Editorial, is an award-winning veteran of IT journalism covering DevOps. Have a tip? Email her or reach out @PariseauTT.
