Pivotal and IRS

Investment Analysis Clubs Saul’s Investing Discussions
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https://medium.com/@cote/cloud-native-works-in-government-th…

Not just the Air Force, but now the IRS as well, and Raytheon. Seems that limited market potential argument may be up for a readdressing. Still early days. Cloud Foundry has only been a product since 2015. Basically this is a company that is 3 years old that went public as no one is all that concerned with the legacy aspects of their business.

A miracle of sorts. Only 30% or so of caller actually got into the IRS. Now 100% of them can get on the website and figure out how much in taxes they actually owe. Such a simple thing, heretofore, literally before Pivotal impossible to have been created, up and running with a few months.

Wonder if word may begin to spread throughout the networking chain.

Tinker

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I had a short fleeting train of thought yesterday about company names that included Pivotal and Ubiquiti and how their names fit in with their company goals/missions.

Nothing profound, but presumably Pivotal would like to be a pivotal part of the cloud software/app development processes of many other organizations. Ubiquiti is striving to make connectivity ubiquitous, having started off by providing hardware that has been useful in many underserved areas.

Moreso than a lot of company names, those 2 are quite obviously tied to their businesses.

-volfan84
Long thoughts that seem overly simplistic but are actually profound, like John Madden announcing football games or Yogi Berra describing things

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Thanks Tinker, thats huge to able to land those huge customers.

The subscription customer decline is concerning.

2015 75
2016 180 140%
2017 275 53%
2018 319 16%
Fiscal 2019 1st qrt 20 % YOY, 20 additional customers.

According to there S1 pg 64. Has some other good info as well.

https://www.sec.gov/Archives/edgar/data/1574135/000104746918…

“In fiscal 2018, we focused primarily on renewals and expansion of existing customer subscriptions, which resulted in fewer net additions relative to prior periods. However, with the recent launch of PCF v2.0, including the release of PKS, we intend to increase our focus on adding new customers.”

Hopefully they can turn that 16% YOY around and get back up to 2017 comps. Have to wait and see…

Along with that there TAM according to there S1… pg 7

"Market Opportunity

Our cloud-native software addresses IT spending across the rapidly growing market for public cloud workloads, sometimes referred to as Platform-as-a-service (“PaaS”), and the market for application infrastructure, middleware and development software. We believe our cloud-native platform opportunity is the aggregate of these two markets, with spending today estimated at over $50 billion.

According to Gartner, spending on cloud application infrastructure services (PaaS) is expected to be $16.0 billion in 2018, growing to $29.0 billion by 2021, representing a 22% compound annual growth rate (“CAGR”).

According to Gartner, spending on application infrastructure, middleware and development solutions is expected to be $43.2 billion in 2018, growing to $51.4 billion by 2021, representing a 6% CAGR.
Growth Strategy

Key elements of our growth strategy include our plans to:

Extend technology lead of our cloud-native platform.

Maintain open cloud-native platform advantage.

Continue to drive new customer adoption.

Expand adoption within existing customers.

Continue to capitalize upon our relationships with our strategic partners.

Further leverage partnerships with public cloud vendors.

Continue to leverage the combined strengths of PCF and Labs to drive PCF expansion."

Back to me:

I think there marketing team should be able to execute and capture a decent portion of that even if it’s blown out of proportion.

Will be watching,

Chris.

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I think the potential for government contracts is being woefully underappreciated with PCF. They started with the Air Force AOC, there are key leaders from every branch and many international militaries they work there.

Once something catches on in the DoD, it spreads like crazy. Also, there is SO much catching up to be done in terms of moving to the cloud and PCF is the perfect solution to stay cloud provider agnostic.

Also a moat once they start to learn how gvmnt contracts work.

I believe this will be huge as more and more departments move to the cloud (finally).

-just transitioned to National Guard after 7 years of Active Duty in the AF.

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Hi Chris,
Re Pivotal

End fiscal 2017, 275 customers
End fiscal 2018, 319 customers

So they grew 44 customers last fiscal year.

Last quarter they grew 20 additional customers in one quarter! That’s a pace of 80 per year (up from 44 last year) and certainly looks like the S&M has picked up the pace.

Saul

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