Google has plans to buy D2iQ, an enterprise cloud software company formerly known as Mesosphere. This was first reported by Axios, who cited a source “close to the situation” which also revealed that the deal may not happen because at least one D2iQ executive opposes the transaction.
While neither company has publicly disclosed any details about this alleged acquisition, D2iQ is prime for acquisition after it recently laid off 34 employees to reduce costs and deal with a projected 40% sales decline. These layoffs occurred just weeks following the announcement that chief executive officer, Mike Fey would be stepping down from the company. The company’s investors include Khosla Ventures, Andreessen Horowitz, Koch Disruptive Technologies, and T. Rowe Price
When D2iQ announced its $125 million Series D funding round in 2018 to expedite its hybrid cloud transformation, the company was valued at $775 million. The sale is therefore expected to exceed the total funding the company has raised, which comes to over $250 million but likely won’t hit the $775 million mark.
“We’ve been thoughtful on how we do acquisitions,” Google Cloud CEO Thomas Kurian told CRN earlier this year. “We’ve always acquired complementary products. Looker, for example, has had many common customers with our analytics portfolio. We’ve shown that we don’t need acquisitions to grow. We can grow organically, and we’re growing very quickly organically. But where it makes sense, we’ve done acquisitions to complement our existing portfolio products.”
Notably, Google developed Kubernetes before open-sourcing the technology in 2014 that D2iQ has integrated into its software offerings. As it’s already a Google Cloud Platform and G Suite partner, D2iQ’s integration could help Google better compete with Amazon.
If the purchase does happen, it would be Google’s second significant buy in 2020. In February the company acquired Looker Data Sciences Inc. for $2.6 billion. Late last year it bought CloudSimple, which migrates on-premises VMware-based workloads into public clouds.
Earlier this month, D2iQ was awarded a US Department of Defense Enterprise Software Initiative contract. Under the deal, the company will provide the department access to its suite of enterprise-grade open source solutions for deploying cloud-native applications.
