Progress today announced it has acquired Chef for $220 million in cash as part of an effort to advance adoption of best DevOps and DevSecOps practices in the midmarket.
Once the deal is completed next month, Chef will operate as an independent business unit led by Sundar Subramanian, who currently is a senior vice president and general manager at Progress.
Progress CEO Yogesh Gupta said IT automation technologies developed by Chef will be incorporated into monitoring and debugging platforms and tools that Progress currently provides. By moving into areas such as compliance and security, Chef has already embarked on an effort to make its offerings more accessible to IT personnel, who often lack programming skills, especially in midmarket IT organizations that make up the bulk of the Progress customer base.
As a private company owned by venture capitalists who monetized open source software mainly via commercial support agreements and enterprise editions of its software, Chef has been able to generate roughly $70 million in revenue. As an arm of Progress, Chef joins a public company with more than $500 million in revenue that has a market capital in excess of $2 billion.
Chef should be in a better financial position to compete against rivals such as Puppet and Red Hat. Following its acquisition by IBM, Red Hat has been plowing consider resources into a declarative Ansible automation framework that tends to appeal to traditional IT teams. In comparison, Chef has been a pioneer in automating IT using programming tools that especially appeal to DevOps teams managing infrastructure as code.
In general, most midmarket IT organizations don’t have a lot of DevOps expertise. As an independent arm of Progress, Chef will continue to focus on IT operations, compliance and security, while Progress focuses more of its efforts on the application development and deployment requirements of midmarket organizations, said Gupta. As midmarket IT environments become more complex, the number of touchpoints between Progress and Chef involving cookbooks and recipes created by Chef will increase over time, he added.
The acquisition of Chef is the latest in a wave of consolidation across the DevOps category. While adoption of DevOps tools and platform continues to grow, traditional enterprise IT organizations are now moving to acquire many of the larger vendors in the DevOps category. That trend is only likely to accelerate during an economic downturn brought on by the COVID-19 pandemic. At the same time, the number of startup companies being launched continues to expand the overall size of the DevOps/DevSecOps ecosystem.
It’s too early to say at what rate best DevOps practices will gain further traction among traditional midmarket IT organizations. However, at a time when many of those organizations are being asked to do a lot more with even less, it’s only a matter of time before existing rigid IT processes begin to incorporate more agile approaches to managing IT as a matter of survival.
