Topic of the Quarter
Cloudy with a Chance of Savings: The FinOps Revolution
In our ongoing efforts to keep our clients informed about disruptive financial and technology market trends, this issue of Founder Essentials delves into a significant market that has been gaining momentum among large enterprises: FinOps.
FinOps is a practice that has emerged from the challenges faced when moving to the cloud. As organizations transition to the cloud, they encounter significant hurdles in managing these infrastructures from cost, operational, and security perspectives. FinOps addresses these challenges by providing a framework for managing and optimizing cloud spending through collaboration between finance, engineering, and business teams.
In short, FinOps focuses on four key components:
Visibility to provide detailed insights to make informed decisions
Optimization for continuous analysis of cloud usage and cost management opportunities
Collaboration to promote alignment among finance, engineering, and product teams
Governance to establish policies and monitor compliance
These practices were pioneered by CloudHealth (acquired by Broadcom VMware in October 2018), and Cloudability (acquired by IBM Apptio in May 2019). The vendor landscape has greatly diversified as startups have flooded the scene with focused and integral frameworks offering dynamic solutions for companies of all sizes and needs. Understanding the range of solutions available today is crucial for deciding whether to integrate this critical technology into your operations to optimize your cloud expenditure.
While this market is still in its relatively early stages, we have observed some initial consolidation. Beyond the two mentioned above, notable deals include NetApp’s purchase of Spot in 2020 and CloudCheckr in 2021, HPE’s acquisition of CloudPhysics in 2021, Intel’s purchase of Granulate in 2022, and IBM’s acquisitions of Turbonomic in 2021, Apptio in 2023, and HashiCorp in 2024. Private equity has also shown interest in this space, with Flexera being acquired by Thoma Bravo in 2021 and H.I.G. Capital purchasing StorData in December of last year.
The shift to the cloud offers numerous benefits, including flexibility to scale and innovation with new technologies. However, it also introduces complexities. Embracing FinOps will be essential for achieving financial accountability, operational efficiency, and long-term success.
Founder-Led / Bootstrapped Deal Activity Snapshot
Q2 2024: Notable U.S. based M&A deals in Tech
Autonomy/IoT
6/14 – EpiSci, developer of autonomy solutions for military and commercial applications, reached agreement to be acquired by Merlin Labs. Link
5/8 – Vumetric, provider of application and IoT security, acquired by Telus [TSE: T]. Link
4/2 – Equinox Innovative Systems, autonomous and tethered drones, acquired by TCOM. Link
Big Data & Machine Learning
6/26 – Sumatra, real-time data platform design to block machine learning deployments, acquired by Stripe. Link
6/12 – MiCore Solutions, provider of cloud migration services and a database system, acquired by DataStrike. Link
5/29 – Algorics, cloud-based clinical data management platform, acquired by Precision Medicine Group. Link
4/18 – Cambridge Semantics, data collaboration software offering big data management, acquired by Altair Engineering [NAS: ALTR]. Link
4/1 – HiredScore, big data tool for recruiters and talent acquisition teams, acquired by Workday [NAS: WDAY]. Link
Data Center
5/1 – ComputerLand Silicon Valley, provider of data archiving and data center design, acquired by Issquared. Link
4/19 – DC Canada, provider of data center decontamination services, acquired by Data Clean Corporation. Link
4/2 – Hivelocity, provider of colocation and cloud hosting services, acquired by ColoHouse. Link
4/1 – NCS Global, provider of IT services for data center operators, acquired by Celestica [TSE: CLS] for $56M. Link
Software
6/17 – Mobile Health, mobile-based software reducing healthcare costs, acquired by H.I.G. Growth Partners. Link
6/13 – Zixi, end-to-end video delivery platform, acquired by Clearhaven Partners. Link
6/11 – Lion Gaming, gaming platform offering white-lab betting services for casinos, acquired by Adventure Box Technologies for $45M. Link
4/26 – XAP, education software, acquired by Embrace Software. Link
Professional Services
6/17 – Stellar Blu Solutions, developer of network and connectivity solutions, acquired by Gilat Satellite Networks for $245M. Link
6/12 – Cincom Systems, enterprise software simplifying business management for organizations, acquired by PartnerOne. Link
6/10 – Vertisystem, provider of cloud and data migration consulting services, acquired by MOURI Tech. Link
6/4 – MindPoint Group, provider of cloud security and automation services, acquired by Tyto Athene. Link
5/1 – Infocenter, digital transformation services, acquired by Insight Enterprises Link
4/18 – Cloudaction, provider of cloud automation services driving enterprise digitalization, acquired by AiRo Digital Labs. Link
eCommerce
6/18 – AmTrav, provider of travel booking solutions, acquired by TravelPerk. Link
6/6 – ’47 Brand, producer of sportswear and accessories, entered into agreement to be acquired by New Era Cap. Link
5/6 – Carbon Off Road, seller of automotive accessories, acquired by MetalCloak. Link
4/12 – Knot Standard, AI-powered custom clothing solutions, acquired by Billy Reid. Link
