The hyperscalers have taught us many lessons in the past two decades, and one of them is that everything that can be defined in software should be so that it can be controlled automatically and programmatically – and that goes double for hardware, which has required so much human babysitting over the decades.
Puppet Software was one of the commercializers of the concept of “infrastructure as code” with its eponymous Puppet configuration management stack, which we profiled in depth here and which we have been watching since we founded The Next Platform back in 2015. This story from 2015, when Puppet moved up the stack to do application orchestration as well as hardware configuration management underneath that software with Puppet Enterprise, is a good case in point.
Given the need to software companies to constantly grow their customer bases, the relative low cost of cash for the past decade and a half, and the ability to cross sell and upsell, it is natural for software conglomerations to form. And so it was only a matter of time before Puppet Software and its peers, Ansible, Chef and SaltStack, were acquired once they built up sufficient momentum to demonstrate their likely longevity across service providers, smaller clouds, and enterprises that do not build their own DevOps software stacks. So Red Hat bought Ansible in October 2015 for around $100 million, and Ansible was absolutely one of the reasons why IBM was compelled to pay $34 billion to acquire Red Hat in October 2018. And thus Progress Software, a longtime supplier of 4GL programming languages that jumped onto the DevOps bandwagon a decade ago, bought Chef Software in September 2020 for $220 million. And then VMware paid an undisclosed sum to buy SaltStack in that same month.
HashiCorp, which has built a big following with its Terraform and Vagrant configuration management tools, has gone all the way and built a complete DevOpsContainer platform and has also gone public – but HashiCorp is the exception, not the rule, and it will have to keep expanding its platform and adding more tools if it hopes to keep growing its business. It will have to build out its conglomerate to compete, and there is still no reason to believe that some bigger company with very deep pockets won’t shell out big bucks to buy HashiCorp someday. (The wonder is that it didn’t happen before HashiCorp went public.)
The other wonder is why it took so long for someone to acquire Puppet Software, formerly known as Puppet Labs, but now another DevOps conglomerate builder called Perforce Software, which is owned by private equity firms Clearlake Capital and Francisco Partners, is doing just that.
Luke Kanies, the founder of Puppet and its CEO from 2005 through 2016, who we talked to frequently as Puppet was on the rise, stepped down from that role as Puppet established a strong beachhead in the enterprise so the company could either go public or get acquired. As the deal with Progress was announced today, Puppet estimates that it has well over 40,000 customers – including Apple, Walmart, Bank of America, the New York Stock Exchange, Intel, Samsung, John Deere, Porsche, Disney, and Nike, just to drop some big names – and counts installations at two-thirds of the big Fortune 100 firms and over 80 percent of the Global 5000. That is a real enterprise software business, but there are probably 300,000 to 500,000 potential customers, so there is still a lot of runway.
Perforce, the acquirer of Puppet, is two decades older than Puppet, and its founder, Christopher Seiwald, created a version control system for both source and binary code after graduating from the University of California at Berkeley in 1984. Like Kanies, Seiwald stayed with his company until 2016, pushing the Perforce version control system and seeing to the development of its Helix Storm tool for developer collaboration in 2013 and GitSwarm in 2015. In February 2016, Seiwald sold the company to private equity firm Summit Partners, which installed its own chief executive officer – Janet Dryer, who had built and run a software conglomerate called HelpSystems in the IBM midrange system market for decades. Summit went on an acquisition spree, buying agile planning software manager Hansoft and repository management tool maker Deveo in 2017. The next year, Clearlake Capital bought Perforce from Summit Partners, and bought a slew of companies and a year later, Francisco Partners took a 50 percent stake to get a piece of the action as Perforce acquired Rogue Wave Software, which among other things controlled the commercial Zend PHP server.
Perforce spanned version control, agile development, and application testing and a commercial-grade Zend PHP application server, and with the Puppet acquisition will add configuration management for systems and applications to the stack.
Before the acquisition, Perforce had around 1,200 employees and is adding another 500 with the acquisition of Puppet. The terms of the Puppet deal were not disclosed, but it had to be a pretty sizeable number, we figure, with Puppet having raised $189.5 million in six rounds of funding and two rounds of debt financing between 2009 and 2020. Probably on par with what Progress paid for Chef.
Exactly how Perforce will integrate Puppet and continue its development remains unclear, but we will circle back around when the dust settles and find out. Perforce tells The Next Platform that it expects for the deal to close sometime in the second quarter of this year.