Red Hat to acquire 3scale, an API management company

Red Hat today announced that it is acquiring 3scale, a company with software for managing the use of application programming interfaces (APIs) that companies can expose for other developers to use.

The deal is not material to Red Hat, although it said that GAAP operating expenses will go up by $7 million in the 2017 fiscal year, according to a statement.

Red Hat intends to ship an on-premises version of 3scale in addition to the existing cloud service. And Red Hat will “open source the code in the Red Hat way,” Mike Piech, vice president and general manager of middleware at Red Hat, wrote in a blog post.

The software is a complement to Red Hat’s existing software, Piech wrote.

“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,” he wrote. “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 offering to the table alongside our tried-and-true JBoss offerings.”

Competitor Apigee went public last year, and Mashery was acquired by Intel in 2013.

3scale started in 2007 and has offices in San Francisco and Barcelona. The company raised $4.2 million from Javelin Venture Partners and Costanoa Venture Capital in 2013. Customers include Campbell, Orange, and the Telegraph.

Red Hat expanded its functionality through its acquisition last year of devops software company Ansible.

Also today, Red Hat announced a $1 billion stock repurchase program and posted its earnings for the quarter that ended on May 31. The company got $92 million in non-GAAP net income, or 50 cents per share non-diluted, on $568 million of revenue. Earnings were on par with analysts’ estimates, and revenue beat estimates.

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