Pivotal Software

The company specializes in creation of instruments of rapid application development and rendering the accompanying consulting services.

Performance Indicators

2017

According to the results of the financial year closed on February 2, 2018 revenue of Pivotal made $509 million against $416 million the previous year. Losses of the company were reduced approximately by 30%, having reached $163.5 million.

History

2019: VMware purchased Pivotal Software for $2.7 billion

On August 22, 2019 VMware announced acquisition of Pivotal Software for $2.7 billion. The companies want to close the transaction till January of the 2020th.

The CEO of VMware Pat Gelsinger says that this purchase allows the company to follow three growing trends in the market of corporate IT.

VMware purchased "subsidiary" of Dell for $2.7 billion

First, for corporate IT the new model — multicloud appears. Secondly, digital transformation accelerates rates of development of cloud applicaions. And the last, but not less important: the companies transfer applications to a cloud and get to them access through distributed networks and from different endpoints therefore security became a serious problem and a priority — he said.

According to him, the combination of its platform for application development of Pivotal and infrastructure opportunities of VMware will allow the united company to create "a complex portfolio of Kubernetes-solutions" for the purpose of creation and management of modern applications.

Several months prior to the declaration of Pivotal sale the company provided the product Pivotal Application Service on Kubernetes which helps developers to transfer the applications to containers with an opportunity for work on several cloud platforms.

Pivotal and VMware also cooperated in issues of integration of Kubernetes into the platforms by means of the joint solution Pivotal Container Service.

On opinion of the analyst Charles King from Pund-IT, the transaction about the consolidation Pivotal and VMware to profitable both companies which enter into the Dell Technologies group. Weak indicators of Pivotal in the stock market allowed VMware to purchase the company at the beneficial price in recent months, having paid for it so much how many it cost at entry into the exchange.

Besides, the transaction was logical, considering that Dell and VMware already owned about two thirds of stocks of Pivotal. Also Ford Motor Company (6.6%) and Microsoft were among owners of Pivotal Software.^[1]

2018: Entry into the exchange: attraction of $555 million and assessment in $4 billion

On April 20, 2018 Pivotal Software went public. In the first day of the stock trading of the company at the New York Stock Exchange (NYSE) they rose in price for 5%.

In April, 2018 the stocks Pivotal were placed on the New York Stock Exchange

The day before the IPO company set the cost of the securities at the level of $15. After opening of the exchange of an action began to cost $16.75. During trading the share price increased at most by 10% concerning value which was on start of biddings. To closing of NYSE the quotations of Pivotal stopped on a mark of $15.73 that it is 4.9% more than the level which was selected by the software maker before the IPO. After the end of biddings on April 24 the price of one action raised up to $18.14.

Before the official debut at the Pivotal exchange sold 37 million shares, having earned about $555 million and having received assessment of market capitalization in $3.75 billion. According to the results of the first day in the status of the public company its capitalization made about $4 billion. The ticker of the company at the exchange is PVTL. Investment banks became the leading joint bookrunners within the IPO Morgan Stanley, Goldman Sachs and Citigroup.

According to the CEO of Pivotal Robert Mee, the company planned listing since 2013 when began to work irrespective of EMC. The funds raised within the IPO are going to be used for further international expansion and also for "jointing" of collective and clients for the purpose of creation of steady and successful business, he told in an interview to the Forbes magazine.

The head also added that Pivotal remains the independent company, though closely cooperates with Dell and VMware which help to sell its services. After IPO Dell remained the largest shareholder of Pivotal.^[2]

2016

Business valuation in $2.8 billion

On May 5, 2016 it became known of carrying out a round of financing of Pivotal Software within which the company was estimated almost at $3 billion. Among investors — the auto giant Ford Motor and software corporation Microsoft.

Pivotal attracted in total $253 million. Most of all means — $182.2 million — will provide Ford in exchange for a 6.6 percent share in former "subsidiary" of EMC. The share of investments of Microsoft is not specified, but at the same time in the company noted that the taken shares are not going to be placed on the exchange. In October, 2015 the CEO of EMC Joe Tucci said that IPO Pivotal can take place "not in so long-term future".

Investors estimated the developer of cloud solutions Pivotal at $3 billion

The sources of Bloomberg familiar with a position of owners of Pivotal note that primary public placement of securities will hardly happen by 2017-2018 as against the background of a market complication the IPO company wants to achieve higher share of software revenue for the purpose of receiving an appreciation of business from investors. Attracted from Microsoft, Ford and other companies of investment will be spent for business development, interlocutors of the agency reported.^[3]

According to Reuters, post-investment value assessment of Pivotal according to the results of a round of financing will make $2.8 billion^[4]

Having invested in Pivotal, in Ford hope to strengthen positions regarding creation of the software for cars with robotic management and Internet connection. The companies will open development centers in which their engineers will work in close cooperation in the USA and Europe.

Microsoft, according to the executive vice president of division of cloud and corporate solutions Scott Guthrie, invested in Pivotal for the purpose of "strengthening of the growing demand for profound partnership between platforms Pivotal Cloud Foundry and Microsoft Azure for service of the world's largest enterprises and their developers".

Entry into structure of Dell Technologies

As a result of a corporation merger of Dell and EMC the Pivotal Labs company was a part of Dell Technologies group.

2012: EMC purchases Pivotal Labs

On March 20, 2012 EMS were announced acquisition by Pivotal Labs which is in private ownership with the headquarters in San Francisco, by California, the USA. Transaction amount is not disclosed.

The company founded in 1989 specializes in creation of instruments of rapid application development, the customer base of popular solution SaaS of Pivotal Tracker totals over 240 thousand users worldwide. Among them both startups, and the large companies, including, Twitter, Groupon, Salesforce.com.

The interest of EMS in Pivotal Labs is connected with the increasing need of her own customers to develop in a short time effective web applications for mobile devices, the analysis of "Big Data" and cloud computing architectures. According to EMS, for most the companies the problem of "Big Data" is particularly acute. The collected information volumes are not enough to be placed in specialized storage like Hadoop – it is important to be able to take quickly indicators and metrics, relevant for business. Now programmers will receive in the order Pivotal Labs methodology, tools open source, modern frameworks and an opportunity to use specialized integrated environments, such as Ruby on Rails.

The methodologies acquired in Pivotal Labs should add the tools of creating applications of the analysis of "Big Data" Greenplum Chorus provided in the same day. The concept of interaction between project participants put in it in many respects has something in common with Facebook and other social networks. As Bill Cook noted, the president and the general manager of division of EMS of Greenplum, his company began to work with Pivotal Labs technologies in 2011 within the project on Chorus creation. Earlier in 2012 EMS submitted the Greenplum Unified Analytics Platform (UAP) platform for the analysis of the structured and unstructured data.

Notes