Perforce Software will acquire infrastructure-as-code vendor Puppet for an undisclosed amount this quarter, in a divergence from Puppet executives' previously stated goal of an IPO.
Perforce, which is owned by private equity firms Francisco Partners and Clearlake Capital, offers enterprise support services for open source DevOps automation tools, including PaaS software from OpenLogic. Its acquisition of Puppet marks the company's 13th acquisition to date -- before this, it most recently acquired an application testing subsidiary, BlazeMeter, from Broadcom in September.
Puppet executives had previously said in late 2020 that the company was planning for an IPO of publicly traded stock, but the pace of change in the IT industry and the disruption of the COVID-19 pandemic changed that plan, according to a blog post by Puppet CEO Yvonne Wassenaar.
"As I surveyed the marketplace it became clear we are only scratching the surface of what our customers want and need," Wassenaar wrote. "What they need is not a plethora of tool vendors but a strategic platform partner who can offer them the breadth and depth of DevOps solutions essential to winning in the fast-changing markets they play in."
Wassenaar also acknowledged the previous IPO plans, and alluded indirectly to failing to hit the necessary financial milestones to reach that goal, despite $100 million in annual recurring revenue during her three-year tenure as CEO.
Reading between the lines, one analyst said it's clear Puppet's event-driven DevOps automation tool, Relay, had not seen enough success in the market for the company to remain independent.
"Standalone DevOps products do not provide significantly differentiating benefits to justify integrating into a toolchain," said Larry Carvalho, independent analyst at RobustCloud. "Hence, it is likely that they did not have enough revenue growth to fulfill the needs of an IPO."
The pandemic also accelerated many enterprises' moves to the cloud, where cloud providers offer their own automation tools. Some users get the impression that tools such as Puppet aren't necessary, said Naveen Chhabra, a senior analyst at Forrester Research.
"Vendors are being hammered by the shift to the public cloud, where operations [pros] feel they do not require as many automation tools as they would have needed in the on-premises world," Chhabra said. "That's a myth, though. Firms do need automation in the public cloud world ... marketing and messaging makes people believe that cloud is all managed."
One Puppet channel partner expressed trepidation about the merger with Perforce shortly after the news was announced.
Although Perforce has a track record of supporting open source software and pledged to continue supporting Puppet projects, the Puppet partner expressed nervousness about how effective that support will be.
"From my experience, being bought is rarely a positive thing in the long run," the partner said, requesting anonymity because they have yet to receive detailed information on the acquisition from Puppet. "I'm a little bit afraid that the things we came to love about Puppet [will] start to disappear in favor of the new company's policies."
Specifically, the partner was concerned about losing rapport with Puppet. Some 500 Puppet employees will join Perforce as a self-contained business unit within the larger company, which has 1,200 employees.
"As a partner, we have a very close relationship with the company and the people working for them," the partner said. "Being part of a larger group might jeopardize that somewhat."
The end of an era for standalone infrastructure as code
Puppet is in good company as an acquisition target for a larger DevOps automation vendor -- its major contemporary competitors in configuration management and infrastructure as code have also been acquired. Ansible became part of Red Hat in 2015, while Chef was acquired by Progress Software and SaltStack by VMware in September 2020.
Over the last five years, Puppet, Chef and SaltStack branched out into security and compliance automation, as well as broader DevOps automation and infrastructure as code at a deeper layer of the IT stack than their original configuration management tools were built for. But tools in this category were challenged by the emergence of Kubernetes-based container automation, GitOps and immutable infrastructure. None had the name recognition for infrastructure as code alongside Kubernetes that HashiCorp's Terraform did.
Moreover, while DevOps automation used to require expertise to cobble together disparate tools, enterprises have begun to favor pre-integrated DevOps platforms in the last two to three years.
"It is an end of an era of standalone [products]," Carvalho said. "Customers are looking for integrated DevOps [platforms]."
Carvalho added that he expects similar acquisitions to continue into 2023.
What will become of Puppet's Relay DevOps automation product also remains an open question ahead of the acquisition's close. Both a Perforce press release and Wassenaar's blog post primarily focused on Puppet's infrastructure-as-code and security and compliance automation tools. Perforce already offers its own DevOps automation tools, including Helix application lifecycle management, Hansoft Agile product planning and Gliffy workflow software.
"The best-case scenario here is that Perforce and Puppet combine to create a value stream delivery platform... that would handle all aspects of software delivery," said Paul Delory, research vice president at Gartner. "The worst-case scenario is that this is a shotgun marriage driven by the investors, whose goal would be to extract as much value as possible from a collection of legacy tools before they're completely obsolete."
Beth Pariseau, senior news writer at TechTarget, is an award-winning veteran of IT journalism. She can be reached at [email protected] or on Twitter @PariseauTT.