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Red Hat acquires 3scale for its API management software

The open source software company Red Hat has just announced that it will acquire 3scale for its software which manages application programming interfaces (APIs).

The deal is not crucial to Red Hat though it does plan to “open source the code in the Red Hat way.” according to a blog post from the vice president and general manager of middleware at the company, Mike Piech. The company also said that its GAAP operating expenses will increase by $7 million during the 2017 fiscal year.

Red Hat will continue operating 3scale's existing cloud service and in addition it will launch an on-premise version of its software. However the main reason the company decided to make the acquisition is due to the way 3scale's software complements its own existing software with Piech saying: “The 3scale technology complements the Red Hat JBoss Middleware portfolio, adding a robust and comprehensive set of API management capabilities to the existing rich integration features offered in today's Red Hat JBoss Enterprise Application Platform (EAP), JBoss Fuse, JBoss A-MQ and the Red Hat Mobile Application Platform.”

“Our customers have increased their priority on API management features for their integration projects and we are excited to now be able to bring the 3scale offerings to the table alongside our tried-and-true JBoss offerings.”

3Scale's competitor Mashery was acquired by Intel in 2013 and Apigee went public last year. Red Hat on the other hand, which started in 2007, expanded its functionality through acquiring the devops software company Ansible.

The company announced a $1 billion stock repurchase program along with the news of its 3scale acquisition. Red Hat also posted its earnings for the quarter that just came to a close in which it brought in $92 million in non-GAAP net income on $568 million in revenue.

The company was able to beat analysts' estimates regarding its revenue but its earning were on par with previous predictions.

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Anthony Spadafora
After living and working in South Korea for seven years, Anthony now resides in Houston, Texas where he writes about a variety of technology topics for ITProPortal.