Cloud migration startup Velostrata sells up, but identity of buyer surprises partners
Google makes big cloud infrastructure play with latest acquisition, but Velostrata partners not fully convinced of deal's logic
Cloud migration start-up Velostrata has found a buyer in the form of Google, a development that at least one of its UK partners did not expect.
Google yesterday announced its intent to acquire the Israeli firm, whose technology aims to simplify and accelerate enterprise transition to public cloud.
Velostrata, which has raised $31.5m in funding since it was founded in 2014 according to Crunchbase, was feted as one of the ten tech startups to watch in a CRN article in January, but Dan Scarfe, CEO of Velostrata and Microsoft Azure partner New Signature UK, had tipped the firm to be acquired by Microsoft, not Google.
Velostrata only added Google Cloud as a partner last month, which it said was in response to "increasing enterprise demand in mass migrating on-premises workloads into Google Cloud Platform".
According to Canalys, Google's cloud infrastructure revenues hit $1.2bn in Q1 of 2018, putting it a distant third in the market behind AWS and Azure, which Scarfe viewed as more natural bedfellows for Velostrata.
"I guessed one of the vendors would buy them, but it's a bit of a surprise it was Google," he said.
"Google have carved out a reasonable niche for themselves in the cloud native and AI space, but they're not particularly strong in the infrastructure space, and Velostrata is all about moving legacy workloads into the cloud. It's strange, but maybe Google is making a statement that they're ready to roll on their infrastructure stuff, and this is their way of accelerating that."
The Velostrata deal comes after global SI Atos last month made Google its preferred public cloud partner. The search giant also won Twitter as a Google Cloud customer last week.
New Signature was Velostrata's maiden UK partner, but Scarfe said its acquisition by Google would naturally impact their relationship given New Signature's ties with Azure.
"I suspect it will go one of two ways," he said. "They will either make it native to Google, and offer enhanced experience with Google, which would make it difficult for us to use it. Or they might go a different way and maintain compatibility with all of the clouds and just use it almost as a lead generation inside Google. This would mean they would have the inside line on a lot of deals without necessarily having to make it Google-only. I've got a feeling they might go with the latter, but even so that's not great as you're lining Google's pockets which is obviously not something we want to be in the business of doing."
Founded by the duo behind StorSimple (which Microsoft acquired in 2012), Velostrata's technology is designed to enable workloads to transparently migrate to the public cloud in minutes by decoupling compute from storage without degrading performance.
"We are proud to join forces and help pave the way for enterprise customers to transform their most demanding enterprise workloads on Google Cloud Platform," Velostrata CEO Issy Ben-Shaulsaid in a blog post.
In a separate blog post, Eval Manor, vice president of engineering at Google Cloud, said that Velostrata's team would join Google's Tel Aviv office.
"With Velostrata, Google Cloud customers obtain two important benefits: they'll be able to adapt their workloads on-the-fly for cloud execution, and they can decouple their compute from storage without performance degradation," Manor explained.
"This means they can easily and quickly migrate virtual machine-based workloads like large databases, enterprise applications, DevOps, and large batch processing to and from the cloud. On top of that, customers can control and automate where their data lives at all times—either on-premises or in the cloud—in as little as a few clicks."