Microsoft is acquiring Deis, an open-source software company that helps businesses build and operate massive online applications atop cloud services. In so doing, Microsoft is making a direct play to better compete with Google and Amazon.

Though the startup is small and the purchase price is likely not that significant, the move underlines Microsoft's commitment to the technologies that will define online infrastructure in the years to come—even though those technologies run counter to the business models that traditionally drove Microsoft.

With its various open-source tools and help from cloud services like Microsoft's Azure, Deis aims to significantly simplify the rather complex way that modern applications are both designed and operated. "They take what is really complicated, and they make it approachable—so that people can think about it at the concept level rather than a deep technical level," says Brendan Burns, a notable figure inside Microsoft's cloud division who helped drive the acquisition. This is hardly an unusual endeavor—it's part of a much wider movement in the world of cloud computing—but it carries added significance because Microsoft is the one buying the startup.

The deal is yet another sign that Microsoft is a very different company than it was just three years ago when Steve Ballmer still held the reins. At the tail end of Ballmer's time as CEO, Microsoft was beginning to reimagine itself around those two very big ideas: open source software and cloud computing. But under new CEO Satya Nadella, Microsoft has wholeheartedly embraced them both, fully realizing how much they mean to the future of technology.

"Satya is like the Pope Francis of software," says Alex Polvi, founder and CEO of CoreOS, a company that plays in the same area as Deis. "He took this old institution and made it cool again."

From Google to Microsoft

Burns and Gabe Monroy, the Deis chief technology officer, declined to discuss the terms of the deal. Deis operates offices in San Francisco and Boulder, Colorado, and it's unclear whether the startup will physically relocate to Washington, given that the core of Microsoft's cloud division operates from company headquarters near Seattle.

In any event, Deis will continue to help coders and businesses erect online applications using Kubernetes, a sweeping open-source software tool originally developed at Google. Kubernetes is a way of carefully parcelling computing tasks across a vast array of machines. It was inspired by Borg, a system that served the same purpose inside Google, driving everything from Google Search to Gmail to Google Maps. In essence, Kubernetes provides a much more efficient way of running apps on a grand scale. It's the kind of thing that can serve apps to million of customers, though it's not something those consumers ever see.

"What we were basically doing is offering up the secret sauce that runs Google as an open-source technology," Google's Craig McLuckie, one of the project's creators, once told WIRED.

This means that anyone else can use it, including Microsoft. Much like Google, Microsoft now offers a cloud computing service for coders and businesses to build and run applications atop Kubernetes without setting up their own hardware. Last year, the company even went so far as to hire one of the other engineers who originally built the tool inside Google: Brendan Burns. It was a hire that pointed to the very new and very real attitudes that now drive Microsoft. Just a few years ago, Microsoft wouldn't have hired someone like Burns—and Burns wouldn't have made the move.

Microsoft Loves Linux

For years, Microsoft not only steered clear of open-source software, but actively worked to suppress the movement, seeing it as a threat to its business, which was built on high-priced proprietary software like Windows and Office. But as Silicon Valley, Wall Street, and so many other markets embraced open source in the extreme, Microsoft was forced to rethink its stance.

Kubernetes isn't just open-source software. It isn't just something Microsoft would have kept at arm's length in the past. It's a tool that hooks directly into Linux, the primary competitor to Microsoft's Windows operating system. But this kind of thing is now essential to what Microsoft is building. According to Burns, about a third of the workloads running on its Azure cloud service are running atop Linux.

In acquiring Deis, Microsoft is looking to better serve the enormous audience of coders and businesses building their operations in this way. And in the process, Satya Nadella and company are looking to better compete with Google—not to mention Amazon and other cloud players—in a market with enormous potential.

Tech researcher Forrester predicts that the market for cloud services will grow to $191 billion by 2020, and both Amazon and Google believe this could be their biggest business—a bold statement when you consider that this is the world's largest retailer and the world's largest advertiser. Microsoft is now providing serious competition, in large part because it embraced tools like Kubernetes and Linux, people like Burns, and companies like Deis.