DevOps tools market shrinks with SmartBear, TPG Capital moves

The DevOps tools space has seen a steady stream of mergers and acquisitions, as private equity investors and larger companies see money in software development and delivery tools.

Consolidation continues in the Agile DevOps space as SmartBear acquired Bitbar and private equity firm TPG Capital sets it eye on CollabNet VersionOne.

SmartBear, which offers software quality tools for developers and is based in Somerville, Mass., this week acquired Helsinki-based Bitbar for its mobile application test automation platform and device cloud that complement SmartBear's technology. Terms of the deal were not disclosed.

Bitbar complements CrossBrowserTesting, which SmartBear acquired three years ago to help developers test their web applications against various combinations of different browsers and operating systems. Bitbar's platform allows mobile developers to test their applications against a testing matrix of hundreds of combinations of browsers, operating systems and mobile devices that are in use today.

"This move is interesting given that they [SmartBear] already have CrossBrowserTesting, so you wonder if that just wasn't cutting it for them in the market," said Thomas Murphy, an analyst at Gartner. "I think Bitbar has more points of presence and data sovereignty is growing in importance. Still, will people buy both? Do they blend them?"

Thomas Murphy, analyst, GartnerThomas Murphy

Bitbar provides a native mobile application automation platform for SmartBear developers who need to test native apps. Bitbar also offers users a public cloud for mobile app testing as well as private cloud and on-premises options.

Moreover, Bitbar targets DevOps and Agile teams that want to automate the testing of their native apps into their CI/CD pipeline via APIs.

And as development teams take on more responsibility for software quality, they require additional tools and frameworks that support software quality, such as XCUITest and Espresso, as well as Appium for QA automation engineers -- all open-source technologies Bitbar brings to SmartBear.

Whether it's Microsoft-GitHub, CloudBees-Codeship-Electric Cloud, Pivotal-VMWare or SmartBear-Bitbar, these acquisitions signal that the competitive landscape in DevOps is shifting to those that can deliver flow faster and reduce the complexity for development teams.
Thomas MurphyAnalyst, Gartner

However, major cloud platform players in the space already had stiff competition. "I wonder about the sustainability of that business," Murphy said.

Bitbar competitors such as Perfecto Mobile struggled in the market before Perforce acquired it last year. And Sauce Labs has had a "long road," while the major cloud platforms – Microsoft, Google and AWS – have their own device clouds, Murphy said. Kobiton represents another solid competitor, he noted.

SmartBear's Bitbar acquisition is another example of both consolidation and a shift to cloud-native, managed DevOps services for developers, said Jeffrey Hammond, an analyst at Forrester Research.

"Whether it's Microsoft-GitHub, CloudBees-Codeship-Electric Cloud, Pivotal-VMware or SmartBear-Bitbar, these acquisitions signal that the competitive landscape in DevOps is shifting to those that can deliver flow faster and reduce the complexity for development teams," he said.

The Bitbar acquisition follows SmartBear's Cucumber Ltd. acquisition in June.

CollabNet VersionOne acquisition could yield complete DevOps platform

Meanwhile, TPG Capital signed a definitive agreement to acquire Atlanta-based CollabNet VersionOne from Vector Capital. CollabNet VersionOne provides value stream management, Agile planning, DevOps, application lifecycle management and enterprise version control tools for developers.

Although the companies did not disclose terms of the acquisition, San Francisco-based TPG Capital said it will commit up to $500 million to build an integrated enterprise-focused DevOps platform company.

This acquisition could mean even more consolidation in this space because TPG also has invested in parts of Sauce Labs and Sonatype, Murphy said.

"They look to be on a path to acquire a broader suite to become kind of an Atlassian/GitLab single-vendor solution rather than piece things all together from parts," he said.

Moreover, TPG's acquisition of CollabNet VersionOne not only signals consolidation but also that investors see money in the software development and delivery tool space, said Chris Condo, a Forrester Research analyst.

"The statement that every company is a software company is true and that truth is causing an expansion to the software tools market, which is fueling the revenue growth that many of the vendors in the 'DevOps tools' space are experiencing," Condo said.

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