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Red Hat Acquires CoreOS to Expand New Kubernetes & Linux Container Solutions

Container Linux, Tectonic, etcd, rkt, & Flannel to be integrated into OpenShift & Atomic Host

A seismic shift in the competitive Linux container and Kubernetes orchestration solutions landscape occurred on January 30th, 2018 with the announcement from Red Hat, Inc. that the company had finalized a deal to acquire CoreOS, along with their complete software portfolio & staff of 130 programming experts, for a price of $250 million USD. CoreOS has been a leading innovator in the open source community for data center management tools with the production of Container Linux, rkt, etcd, Flannel, & the Tectonic platform for Kubernetes cluster servers. Along with these resources, Red Hat also purchased the Quay.io private Docker registry service which CoreOS acquired in 2014 and used to start their NYC office. CoreOS was founded in 2013 in Palo Alto by Alex Polvi (CEO), Brandon Philips (CTO), and Michael Marineau. CoreOS had previously raised a total of $48 million USD from Google Ventures, Intel Capital, Sequoia Capital, Y Combinator, Accel Partners, Kleiner Perkins Caufield & Byers, and others to fund their start-up operations. Joe Fernandes, senior director of OpenShift Product Management at Red Hat summed up the rationale behind the acquisition by stating, "We see tremendous synergy both in our open source cultures and across our respective product portfolios." CoreOS's leading enterprise customers such as Verizon, eBay, Salesforce, Veritas, & Ticketmaster will also be migrated gradually to integrated Kubernetes and Linux container services managed by Red Hat.

Container Linux, Tectonic, etcd, rkt, & Flannel to be integrated into OpenShift & Atomic Host

Industry analysts viewed the acquisition of CoreOS by Red Hat favorably, primarily due to the value of the software resources and their importance to the Linux operating system in container orchestration with Kubernetes, placing a major focus on the quality of programming talent who will join the company as part of the agreement. Jason Bloomberg (Forbes) reported the deal as an "acquihire" that would increase Red Hat's ability to provide support to enterprise clients, continue innovation on the OpenShift and Atomic Host platforms, as well as positioning the company competitively against rival Linux-based software offerings from Docker. Sean Kerner (Serverwatch) published an interview with Matt Hicks, the senior vice president of engineering at Red Hat, emphasizing the explosive growth in demand for Kubernetes solutions in DevOps for support of web & mobile applications at scale, where "CoreOS can further extend Red Hat’s leadership and influence in the Kubernetes upstream community and also bring new enhancements to Red Hat OpenShift around automated operations and management." Tim Morgan (NextPlatform) noted that the deal followed closely Red Hat's ongoing business strategy of purchasing the leading software firms extending the open source Linux operating system in critical new ways vital to cloud computing. For example:

Red Hat is a publicly listed company on the New York Stock Exchange (NYSE: RHT) with around $3 billion USD in annual revenue (2017-18), $400 million in annual income, 13.5% profit margins, and a $25 billion USD market capital valuation. Red Hat is one of the largest and most highly respected open source software development companies in the world with its flagship product Red Hat Enterprise Linux (RHEL) widely used in data centers across the web hosting industry.

Container Linux, Tectonic, etcd, rkt, & Flannel to be integrated into OpenShift & Atomic Host

Cloud Native Computing Foundation Survey: "Out of the 34 CoreOS Tectonic users identified, five also use Red Hat’s OpenShift. Thus, the combined entity would still have just 14 percent of respondents using it to manage containers. Only 4 percent of Docker Swarm users said they also used Tectonic. Overall, 69 percent of the survey uses Kubernetes, with little specific evidence that they are wed to one company’s distribution. Despite partnerships that allow it to be run within other cloud providers’ environments, OpenShift will continue to look up at Amazon Web Services, Azure and Google in terms of how and where Kubernetes is deployed. In a multi-cloud world, it is likely that companies will deploy applications to more than one Kubernetes environment." Read More at The New Stack.

As the graph from the Cloud Native Computing Foundation survey of enterprise corporations using containers in production for online services above shows, despite CoreOS's leadership in technical software development for containers and Kubernetes cluster server management on Linux, the company's software solutions do not hold a dominant position in data center implementation. In fact, the company lags far behind AWS ECS, Google Container Engine, Docker Swarm, Microsoft Azure, Red Hat OpenShift, Rancher, Apache Mesosphere, Cloud Foundry, & other third party solutions. According to Stu Miniman (SiliconANGLE), “CoreOS has a bunch of interesting open-source tools that they really hadn’t monetized.” For example, etcd is used by Google (CFS, GFS, Big Table, Chubby, Spanner), Amazon (E2 Replicated Logs), Microsoft (Boxwood), Hadoop (ZooKeeper), and many other cloud software applications, but the company has generated little to no income from these due to the open source licensing standards. As Tom Krazit (GeekWire) reported, "Tectonic offers a few more bells and whistles, but with all major cloud players now offering a managed Kubernetes service within their own walls, joining forces with a large enterprise sales team and huge installed base makes some sense."

Container Linux, Tectonic, etcd, rkt, & Flannel to be integrated into OpenShift & Atomic Host

Red Hat Press Release: "Founded in 2013, CoreOS was created with a goal of building and delivering infrastructure for organizations of all sizes that mirrored that of large-scale software companies, automatically updating and patching servers and helping to solve pain points like downtime, security and resilience. Since its early work to popularize lightweight Linux operating systems optimized for containers, CoreOS has become well-regarded as a leader behind award-winning technologies that are enabling the broad adoption of scalable and resilient containerized applications. CoreOS is the creator of CoreOS Tectonic, an enterprise-ready Kubernetes platform that provides automated operations, enables portability across private and public cloud providers, and is based on open source software. It also offers CoreOS Quay, an enterprise-ready container registry. CoreOS is also well-known for helping to drive many of the open source innovations that are at the heart of containerized applications, including Kubernetes, where it is a leading contributor; Container Linux, a lightweight Linux distribution created and maintained by CoreOS that automates software updates and is streamlined for running containers; etcd, the distributed data store for Kubernetes; and rkt, an application container engine, donated to the Cloud Native Computing Foundation (CNCF), that helped drive the current Open Container Initiative (OCI) standard." Read More About Red Hat's Acquisition of CoreOS.

Container Linux, Tectonic, etcd, rkt, & Flannel to be integrated into OpenShift & Atomic Host

One interesting fact about CoreOS is that all three of the company's founders - Alex Polvi (Cloudkick), Brandon Philips (SUSE Linux/Rackspace), and Michael Marineau (Google) - all share a friendship and research relationship that dates back to their university time at Oregon State's Open Source Lab in Corvallis. While CoreOS's main office is located in San Francisco, Jacob Moshenko and Joseph Schorr founded Quay.io in New York City. Red Hat will acquire both of these offices, as well as the company's Berlin development hub, as part of the take-over deal. Some of the main software resources developed by CoreOS that will also be transferred to Red Hat management are:

Overall, CoreOS has over 100 major open source software solutions for cloud computing and elastic cluster server management posted to GitHub. Red Hat has announced plans to integrate many of these into their existing OpenShift, Project Atomic, and Atomic Host products as part of RHEL solutions for OpenStack, Kubernetes, & Docker container installations. As Paul Cormier, president of products and technologies at Red Hat, stated: "The next era of technology is being driven by container-based applications that span multi- and hybrid cloud environments, including physical, virtual, private cloud and public cloud platforms... We believe this acquisition cements Red Hat as a cornerstone of hybrid cloud and modern app deployments." Although the deal will effectively end the run of CoreOS as an independent software development company and lead to the merger of Container Linux, Tectonic, & Quay resources with RHEL, it appears to be a "win-win" situation for all of the people involved that should lead to continued platform innovation in data center management tools for cloud cluster server orchestration with Kubernetes. Learn more about CoreOS.

Container Linux, Tectonic, etcd, rkt, & Flannel to be integrated into OpenShift & Atomic Host

CoreOS Press Release: "Since our start in 2013, we have been committed to open source. It was at a time when only a small minority of the infrastructure industry had considered containers and long before the conception of Kubernetes. Early on, we jumped in with both feet. It began with the creation of Container Linux, a lightweight Linux open source operating system created for the world of containers, and etcd, the distributed key-value store that has since become the underpinning of modern distributed systems like Kubernetes, and participation in the development of the Docker container ecosystem. From there we created and invested in more than 100 other open source projects, like rkt, flannel, dex and Clair, and were a part of the industry leadership in the creation of OCI and CNCF – working together across this industry to make the baseline for this new way to run infrastructure possible. Since then, Kubernetes was open sourced by Google, and has exploded in popularity. We bet on it early on both by making substantial open source investment and delivering Tectonic, one of the first enterprise products powered by Kubernetes... We see tremendous opportunity as we join Red Hat given our shared open source philosophies and complementary product portfolios. Like CoreOS, Red Hat is a recognized leader in open source container technology. We look forward to becoming part of the Red Hat family to further accelerate innovation and provide greater value to customers." Read More About the CoreOS Acquisition by Red Hat.

Container Linux, Tectonic, etcd, rkt, & Flannel to be integrated into OpenShift & Atomic Host