VMware buys Digital Fuel to make cloudonomics easier

VMware bought Israeli startup Digital Fuel Monday in an attempt to give VMware customers better insights into how their IT investments measure up. Israeli newspaper Globes said VMware paid $85 million for Digital Fuel.

The concept of “cloudonomics” is centered on the aspects that make cloud computing a more cost-effective delivery model, but might well extend to the numerous considerations that organizations must take into account when determining if cloud computing is the right choice for any given workload. The latter concern is exactly what Digital Fuel’s “IT Financial and Business Management” software aims provide customers.

In a blog post explaining the deal, VMware’s Ramin Sayar described the decision:

“[A]s CIOs are increasing their level of virtualization and building out their private cloud capabilities to compete with the agility and cost of public cloud services, it’s getting more and more difficult to understand the true cost of the services they provide…. To answer this question without breaking into a cold sweat requires deep financial visibility into cost structures, the ability to monitor and deliver on SLAs, and a framework for making intelligent sourcing decisions.”

Digital Fuel, he wrote, provides “the ability to measure the costs and SLAs associated with a particular IT service whether sourced internally through your private cloud or externally from a cloud or SaaS provider.” Essentially, Digital Fuel lets CIOs confidently make budget decisions based on which option will cost the least, then keep their vendors or service providers in line once the application is up and running. Digital Fuel is presently available as on-premise software or via the SaaS delivery model.

Certainly, VMware, with its growing set of cloud services (sub req’d) that includes recent acquisitions WaveMaker, SlideRocket and Socialcast, and which already sells a variety of virtualization-management products and even an e-mail application, has a vested interest in proving to CIOs that it can deliver cost-effective services across the board. We’ll no doubt hear a lot more about its ever-expanding business at Structure 2011 next week, when CEO Paul Maritz sits down for a one-on-one chat our own Om Malik to discuss VMware’s cloud vision.


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