Red Hat adds to OpenStack expertise with eNovance buy

Red Hat is filling out its OpenStack portfolio by acquiring eNovance, a provider of integration services, for approximately $95 million in cash and stock.

Red Hat will use the engineering and integration expertise of eNovance to strengthen the support for Red Hat’s own OpenStack distribution, the Red Hat Enterprise Linux OpenStack Platform.

Since the debut of OpenStack in 2010, eNovance has built up a specialty in installing and maintaining large-scale OpenStack deployments on behalf of organizations, allowing them to run cloud computing services for internal use or as a service. ENovance was founded in 2008 to help customers manage Web applications deployed in public cloud services.

The purchase of eNovance happens at a crucial time for Red Hat, which is making OpenStack a core component of its enterprise subscription line for open source software. Analyst firm 451 Research has predicted that annual revenue stemming from the use of OpenStack will top $1 billion by 2015.

Hewlett-Packard has also released its own OpenStack distribution, called Helion, and, like Red Hat, plans to offer deployment and hosted services around the cloud software.

Both companies are also building partner networks that will use these OpenStack distributions in products and services for specific industries or geographical areas.

ENovance has a deep pool of OpenStack expertise, according to Red Hat. It is one of the top contributors to the development of the open source software used for running cloud services. In 2013, engineers and developers from eNovance helped Red Hat ready its OpenStack distribution for release.

Last month, the two companies also pledged to work together to build virtual networking functionality in OpenStack, through the Network Functions Virtualization (NFV) project.

Red Hat will acquire eNovance for approximately €50 million cash ($68 million) and €20 million in shares of Red Hat common stock. Red Hat plans to close the deal this month.

A privately held company, eNovance maintains offices in Paris, Montreal, San Francisco and Bangalore. Cisco, Alcatel Lucent, Orange, France Television and Ericsson have all used the company’s services.