What happened
Like many large companies, Microsoft (MSFT 0.97%) likes to grow even more through acquisitions. The pace of asset purchases by the software giant has slowed recently, but there are still eyes on attractively valued rewards. On Monday, the company announced its latest acquisition, and investors welcomed the news, with Microsoft shares trading up 1% to top the essentially flat S&P 500 index.
So what?
Confirming rumors that have been floating around the tech space for a few weeks now, Microsoft has announced on its official blog that it has acquired Fungible. The formerly privately held company specializes in data processing units (DPUs), a type of hardware often used for use in data centers.
The company was founded by former Apple software engineer Bertrand Serlet in 2016. Fungible’s flagship product, the Fungible DPU, was also invented that year.
In its announcement, Microsoft did not specify how much it paid for Fungible. Media reports in December speculated that the tech giant had parted with about $190 million to buy the company.
Now what
The post states that the deal
further signals Microsoft’s commitment to long-term differentiated investment in our data center infrastructure that enhances our broad range of technologies and offerings, including offloading, improving latency, increasing data center server density, optimizing energy efficiency and reducing of expenses.
Data centers, which, as their name suggests, are facilities that store large amounts of data, are critical to modern corporate IT operations. While the acquisition of Fungible is fairly small compared to Microsoft’s overall size, it’s an encouraging sign that the company is paying due attention and servicing its own data center needs.
Eric Volkmann holds positions in Apple. The Motley Fool has positions and recommends Apple and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 Apple calls and short March 2023 $130 Apple calls. The Motley Fool has a disclosure policy.
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