Pivotal, a moderately deep dive!

You are providing excellent views but also confirming a bit my concern on user bias.

I have my own user bias in that i constantly hear differing opinions from clients regarding IT vendors or a specific technology.

I hope to gather some random feedback from different “thought leaders” in my neck of the woods and see how their views correlate with yours.

It may just come down to numbers, which is probably how saul would gauge winners in this space. Are they growing, how much, what do the trends in their numbers hint at, are they well managed, etc etc…

Plenty of folks probably had issues with cisco and vmware and yet they eventually were just about in every enterprise. Same things happened with cloud over last 6-8 years as skepticism gave way to at least partial adoption for certain workloads in most enterprises and continues to expand it seems.

I asked an entire team of clients from a large global company about their cloud strategy yesterday and they all deferred because 1 key guy wasnt in the room. It is both scary and an opportunity to realize the influence that 1 key contact may have on a cloud strategy. Whatever biases or preferences he has, combined with how open or closed-minded he may be, can dictate the direction they go, regardless of what the smartest developer in the building may believe.

So marketing matters (having dell helps but could also hurt depending on clients view and past experiences of dell. Who is selling it matters too…is it all direct sales force or do they leverage a broad channel to gain marketshare quicker, etc…

Glad this conversation got started either way, as my own bias on the dell association had given me a negative view of pivotal at a high-level.

Looking forward to learning more before i jump in and go long on shares.

Dreamer

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Hey Conehead, great discussion.

I should start off with my conclusion, I think, before going on to the details. Maybe I’ve been a bit too pedantic saying Pivotal has no significant competition in the vendor-independent cloud tools space (yes, I made up the term since calling it a PAAS doesn’t really say anything ;).

RedHat is a valid competitor and we need to keep an eye on the myriad startups that are always popping up around cloud tool sets. As a technology, containers particularly Kubernetes, bear watching. If there is a seismic shift toward containers, Pivotal may not have the best tool set for container-based development (though you would hope they would see it coming and focus on improving their product if they see it has business value).

First is RedHat - I haven’t seen it anywhere in my personal experience, but it’s obviously being used somewhere. RedHat is a pure container-based solution, and containers only run on Linux (as far as I am aware), so it is a natural fit for Linux data centres moving to private cloud, and looking to add hybrid cloud capabilities. I’ve been in a few of those shops and haven’t seen it, but I was at the enterprise end, not the infrastructure end, so I may have missed it. And anyway a few shops don’t represent the world.

The bigger point you raise is containers as a technology, as competition to Pivotal. I’ve been discounting that for a few reasons:

  1. Containers are just another among numerous deployment options, as you mentioned
    IaaS → CaaS → PaaS → FaaS → SaaS

  2. Pivotal supports containers transparently, along with all other deployment options, via BOSH

  3. My personal experience is that containers have passed through Inflated Expectations phase in the Gartner Hype Cycle, and are on the down tread toward the Trough of Disillusionment. In my current job I am responsible for the Innovation Lab and Fintech group at a large bank, and most of my developers are off containers - they consider them too much of a pain. We also did various POCs with them and have passed, as I also hear from most of my colleagues. I see Lambda or FAAS taking over as the next big thing. But that is just my experience - your mileage may vary.

Now the thing you raise about containers is that although Pivotal’s solution includes containers, it is not the “best in class” container tool set. It is an add-on, rather than custom built for containers, whereas the Google, RedHat, and a bunch of startup have created solutions specifically for container-based development.

And of course you are correct, Pivotal is an opinionated framework (as most modern frameworks are), which makes it really easy to do things the way they want, but harder to do things differently - a side effect of convention over configuration .

So I think these are good things to be looking out for if you are interested in investing in Pivotal:

  1. RedHat or startup competitors

  2. How much container-based development goes on in the enterprise space, and if Pivotal continues to be the tool set of choice for enterprises that move toward container-based development, or if a different tool set starts gaining ascendence.

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I (like Ant/anthonyms and perhaps others here) was a former EMC Corporation shareholder. When Dell acquired EMC Corporation for $67 billion on September 7, 2016, I was paid cash for my EMC Corporation common shares and given shares of a newly created Dell Technologies, Inc. (DVMT), which became the world’s largest privately-controlled tech company.

Dell Technologies does not have publicly-traded Class A, Class B or Class C Common Stock. After the completion of the merger with EMC Corporation, the company issued Class V Common Stock or “Tracking Stock” shares that are intended to track the performance of a portion of Dell Technologies’ economic interest in the VMware business. Dell Technologies’ Class V Common stock is listed on the New York Stock Exchange (NYSE) and traded under the trading symbol “DVMT.” The shares began trading on September 7, 2016.
https://investors.delltechnologies.com/stock-information/sto…

It’s important for Pivotal Software (PVTL) investors to know about Dell Technologies because it is Pivotal’s majority stockholder, owning, indirectly through its subsidiaries (including VMware, Inc.), 175,514,272 shares of Pivotal’s outstanding Class B common stock that represent approximately 70.1% of Pivotal’s total outstanding shares of common stock and approximately 95.9% of Pivotal’s combined voting power immediately after this offering (or approximately 95.6% if the underwriters exercise their over-allotment option in full). Pivotal Software is a “controlled company” within the meaning of the corporate governance rules of the New York Stock Exchange.
[Source: https://www.sec.gov/Archives/edgar/data/1574135/000104746918… ]

Some here (Saul, Ant and SteppenWulf) have already expressed concern about this control structure of Dell Technologies.
Saul: Hi Steppenwulf, Your comments interested me, but this is what I found out: Dell still owns 70% of the company post-IPO and 96% of the voting power. Pivotal is thus actually a wholly controlled subsidiary with a small slice of its shares trading in the open market. Dell itself is a core piece of its business, providing Pivotal with a large source of its revenues.
That wasn’t encouraging.

Ant: The one additional piece I worry about beyond this revenue model transition is to what degree the attractiveness of the Pivotal business that I knew has been handicapped by DELL - with voting rights, accounting interference and specifically debt loading.

SteppenWulf: I wonder and worry about this also…

There is a significant reason for this control mindset.

Previously, the top management of the former EMC Corporation wanted as much as possible control of its subsidiaries and entities that made-up what was called the EMC Federation. For examples, Joseph Tucci was the Board Chairman and CEO of EMC Corporation, the Board Chairman of VMWare Corp. (partially owned by EMC) and the Board Chairman of Pivotal Software (partially owned by EMC). During Tucci’s reign, the EMC Federation made significant accomplishments in data storage and was at the forefront of iCloud research and development. The following focuses on Pivotal Software:

• In 2009, EMC and Cisco, with investments from VMware and Intel, formed a joint venture called VCE (Virtual Computing Environment aka Acadia) to develop products and services for the converged infrastructure and cloud computing markets.

• In April 2011, the announcement of Cloud Foundry took place. Cloud Foundry is an open source, multi-cloud application platform as a service (PaaS) governed by the Cloud Foundry Foundation, a 501(c)(6) organization. The software was originally developed by VMware and later in 2013 transferred to a new company Pivotal Software.

• In April 2012, BOSH, an open source tool chain for release engineering, deployment & life-cycle management of large scale distributed services, was publicly launched.

• In April 2013, a joint venture by EMC, VMware and General Electric launched a new company Pivotal Software to market assets including Cloud Foundry, RabbitMQ and Spring.[Note: Privotal’s roots go way back to 1989, when it was founded by Robert Mee (who today is CEO of PVTL); EMC acquired Pivotal in 2012. ]

• From the start, Pivotal Software shined in its platform as a service play (PaaS) which leveraged Cloud Foundry and Spring. Many vendors came on board with the open source Cloud Foundry project, and many other companies contributed to the project. Back then, Cloud Foundry became the “de facto PaaS standard.”

• In December 2015, Pivotal acquired European Cloud Foundry development and services provider CloudCredo. This deal gave Pivotal both a face in Europe and the experience and insights the CloudCredo team has gained via its Cloud Foundry projects.

While all the above and other good things were going on, EMC Corporation was highly rated by analysts with 4 and 5 stars, but its stock price appreciation was mediocre and downright disappointing. I called it a “Rodney Dangerfield” stock because it got “No Respect” from investors. This also caught the attention of activist investor Paul Singer, hedge fund manager of Elliott Management Corporation, whose Portfolio Manager Jesse Cohn, sent the following letter dated October 8, 2014, to EMC Chairman Joe Tucci and Board members available at this website:
https://www.businesswire.com/news/home/20141008005668/en/Ell…
Key excerpts:
I am writing to you on behalf of Elliott Associates, L.P. and Elliott International, L.P. (collectively, “Elliott” or “we”), which collectively own 2.2% of the common stock and equivalents of EMC Corp. (the “Company” or “EMC”), making us one of your largest shareholders. We greatly appreciate the dialogue we have established with Joe and his team and we look forward to continuing it.
Since the publication of news reports detailing our position, we have received numerous calls from fellow shareholders requesting our views and sharing theirs. In addition, EMC management has spoken publicly about their view of the Company’s structure. The purpose of today’s letter is to share our thoughts on the right path forward. We hope this will help to inform Joe and the Board as part of EMC’s current review process regarding the long-term value-maximizing pathway for the Company.
The summary takeaways from our letter, which are more fully described below, are:
• EMC’s current structure – “the Federation” – obscures enormous value at EMC
• EMC should pursue pathways to recognize this value, including a separation of VMware from Core EMC and/or various M&A opportunities
(snip)
Stock Price Underperformance
Though EMC is a leader in numerous markets with great products, EMC’s stock price has deeply underperformed its proxy peers and the market over all relevant time periods. It is important to keep in mind that the current structure (EMC + VMware) has existed over the entire timeframe illustrated below. The below chart highlights EMC’s stark underperformance as of July 18, 2014, the trading day prior to the public disclosure of Elliott’s position in EMC.

Bottom-line, EMC was being pressured by Elliott Management to reorganize their unusual “Federation” structure, in which EMC’s divisions were effectively being run as independent companies. Elliott argued this structure deeply undervalued EMC’s core “EMC II” data storage business, and that increasing competition between EMC II and VMware products was confusing the market and hindering both companies.

Needless to say, Joe Tucci, who was about to retire, was extremely upset by this threat from Paul Singer, who was also called by some a ‘vulture capitalist.” Actually, I am a follower and admirer of Paul Singer and totally agreed with his letter as an EMC stockholder. Long story short, Tucci sought and on 10/12/2015 found an iron-clad way to thwart Singer by agreeing to be acquired by privately-held Dell Inc.
http://www.dell.com/learn/us/en/uscorp1/secure/2015-10-12-de…
Dell Inc. and EMC Corporation today announced they have signed a definitive agreement under which Dell, together with its owners, Michael S. Dell, founder, chairman and chief executive officer of Dell, MSD Partners and Silver Lake, the global leader in technology investing, will acquire EMC Corporation, while maintaining VMware as a publicly-traded company.
EMC shareholders will receive $24.05 per share in cash in addition to tracking stock [note: this became Dell Technologies] linked to a portion of EMC’s economic interest in the VMware business.

Thus, evolved the current iron-clad control mindset and corporate structure with a parent company - Dell Technologies - that has no publicly-traded Class A, Class B or Class C Common Stock. It appears that a “Dell Federation” is in place. So going back to the October 2014 Elliott Management letter to the EMC Board to change the federation structure, that issue has been ignored. Here are the current management in place:

Dell Technologies Inc. (DVMT) with a $57.74B market cap
Michael Dell, Chairman & CEO
Thomas Sweet, CFO

Pivotal Software, Inc. (PVTL) with a $4.77B market cap
Paul Maritz, Chairman
Robert Mee, CEO & Director
Cynthia Gaylor, CFO
Note: A huge plus is that Robert Mee, original founder of Pivotal in 1989, is still aboard.

VMWare (VMW) with a $56.16B market cap
Michael Dell, Chairman
Patrick Gelsinger, CEO & Director
Zane Rowe, CFO

Regarding the Elliott Management issue about EMC stock price underperformance, Pivotal Software in its current realm and exposure as public company has the best chance to improve this as this company transitions and grows into a hybrid subscription-based (PaaS) from a service play (PaaS).

Regards,
Ray

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Ray - respect mate! We have intertwined investing history.

Bottom-line, EMC was being pressured by Elliott Management to reorganize their unusual “Federation” structure, in which EMC’s divisions were effectively being run as independent companies. Elliott argued this structure deeply undervalued EMC’s core “EMC II” data storage business, and that increasing competition between EMC II and VMware products was confusing the market and hindering both companies.

I find it freaking ironic (and that is the most positive way I can describe it - you don’t want to know the British euphemistic translation, it involves Fs and Cs), that the amazing EMC federation was pressured into a value crystallisation event involving a DELL buy out who then promptly recreated the federation.

Ant

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@Ray - I read your description of the EMC and VmWare history with interest - I’m also an former investor in EMC and VMWare, though I exited my position prior to the Dell purchase.

Thanks for focusing on the Dell ownership issue at Pivotal, which has always been a concern of mine - not that I feel it is bad for the stock, but that I don’t clearly understand the implications

The problem is I couldn’t understand your point of view regarding Dell ownership either. You seem to be saying that the Dell ownership prevented EMC/VMWare from unlocking value in the past.

Regarding the Elliott Management issue about EMC stock price underperformance, Pivotal Software in its current realm and exposure as public company has the best chance to improve this as this company transitions and grows into a hybrid subscription-based (PaaS) from a service play (PaaS).

You concluded with the above statement, however, which seems to suggest that Pivotal is the best chance to improve this and unlock the hidden value in EMC - although Pivotal really brings a completely business to the table from its parent. Am I understanding what you meant?

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Saul:
Thanks ConeHead, It’s always very useful to get such a well thought-out cautionary view. I’ll just have to follow the numbers and see where they take us at the next earnings report.

Thanks for the kind words. Although, I do want to say that I’m not necessarily taking a negative view. Cautionary may be right word. Because whereas someone like Arista may be at the bleeding edge, I think Pivotal is past that point and is now under pressure from new technologies. They have growth ahead of them, I just don’t think any more hyper growth.

Ethan:
Customer adds per year were as follows
2015 75
2016 105
2017 95
2018 44
Maybe this is an execution issue, lack of staffing, maybe they needed to spend more on Sales and Marketing but that is a pretty big drop off.

It’s funny, I was actually talking to someone who worked for a CaaS platform this morning and he was giving me some anecdotal numbers. He says that in 2015/2016 both PaaS and CaaS vendors were tripling customers every year. But starting in 2017 the CloudFoundry folks started to level off and the Container based folks continued in hyper growth. Just another anecdote, not real data, and one from a biased source as well, but generally supportive of my theory of increased competition from CaaS.

Saul:
I wonder if the difference in perception between you and Steppenwulf is a function of which verticals you are in, or different size companies, or companies specifically in technology versus those in non-technical fields?

Verticals is one possibility. I’m pretty wide in verticals, Steppenwulf says he is in fintech. Maybe that’s a particular strength for Pivotal. I will say that fintech is often ahead of the curve, so what happens in fintech often happens in other verticals in a couple of years. So maybe other people will start to see more disillusionment with containers soon, like Steppenwulf says he has.

But I think a lot of it is just the fact that there are so many specialties in IT these days, and the fact that the data samples are so small. If I talk to 25 customers directly and 200 indirectly through conferences/etc., that’s still a small and non-scientifically selected data sample of the market. Not to mention personal biases. My circles of associates is likely to have somewhat similar opinions because we all influence each other. Same for Steppenwulf.

It’s why I’m curious to hear completely different opinions from internet strangers. This guy I was talking to told me today “CloudFoundry is dead” and “everything is Kubernetes going forward”. Steppenwulf says “Containers were very hot 2-3 years ago, but from my end, I see a lot fewer engagements using them over the last year or so”. Which is true? To some extent, I suspect both. Lots of enterprises probably have both technologies. In some verticals and customers one is doing a lot better than the other. Only time will tell us the ultimate winner.

–CH

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SteppenWulf: You seem to be saying that the Dell ownership prevented EMC/VMWare from unlocking value in the past.

I neither said nor intended to infer that. Initially, it was Elliott Management that asserted that the EMC Federation obscured enormous value at EMC, which I agreed with back then in 2014. After the September 2016 Dell acquisition of EMC Corporation, it appears that a Dell Federation is in place as stated in my post. So far under the leadership of Michael Dell, the parent company Dell Technologies (DMVT), since its inception in September 2016, and VMware (VMW) are outperforming the S&P 500 in a bull market.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?..

SteppenWulf: You concluded with the above statement, however, which seems to suggest that Pivotal is the best chance to improve this and unlock the hidden value in EMC - although Pivotal really brings a completely business to the table from its parent. Am I understanding what you meant?

unlock the hidden value in EMC, no. I meant in my statement with clarifications in parentheses: Pivotal Software in its current realm (as a company under its parent Dell Technologies) and exposure as public company (again under its parent Dell Technologies) has (instead of your is) the best chance to improve this (its stock price performance) as this company transitions and grows into a hybrid subscription-based (PaaS) from a service play (PaaS).

Regards,
Ray

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@Ray

Ok, I think I get it. You are bullish on the Dell ownership and the release of the controlled stock in PVTL

It’s why I’m curious to hear completely different opinions from internet strangers. This guy I was talking to told me today “CloudFoundry is dead” and “everything is Kubernetes going forward”. Steppenwulf says “Containers were very hot 2-3 years ago, but from my end, I see a lot fewer engagements using them over the last year or so”. Which is true? To some extent, I suspect both. Lots of enterprises probably have both technologies. In some verticals and customers one is doing a lot better than the other. Only time will tell us the ultimate winner.

–CH,

Predicting the future is hard.

The Amiga was awesome.
CPM had the installed base of software.
Iomega had the best storage solution.
Gateway was better thsn Dell.

Most of the time it comes down to the balance sheet and the business acumen of the executive team.

Ideas are easy, technology is difficult, business execution is rare.

Ask Mr. Musk.

Cheers
Qazulight

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So I know I’m late to the discussion, but I have thoroughly enjoyed the deep dive into Pivotal, and the way this board can analyze a company.

My main question I haven’t seen anyone address is this:

The company is worth $5B. $509M in revenue last year. And all of this with 319 customers?

That would imply at best, $1.5M spend per customer each year if all customers were the same. However, I suspect that most of the 319 customers are not spending anywhere near $1.5M on pivotal. They even promote this on their own website here: https://pivotal.io/hellogbye

HelloGbye is a startup based around a travel app. They have 5 employees. They used Pivotal’s office space as their own. Does anyone think they are spending $1.5M on the pivotal product? They even promote here how affordable their service is: https://run.pivotal.io/pricing/

Sure, they boast “7 of the largest banks, 9 of the largest automakers, 7 of the largest insurers, 8 of the largest retailers, and 9 of the largest Telcos” work with them. But that all combined is 40 customers. How much of that $509M in revenue came from those 40 customers? And last year they averaged 11 new customers per quarter. I know we have been over that, but how many of those 45 new customers are startups like HelloGbye that will never reach the level of Citibank or Liberty Mutual?

One of the reasons I invested in INST was because through this board we found fine print details about their pricing and how much each customer was spending on their service. That investment has been one of the best I have owned the last 8 months. Is there any clarity anywhere on how much the average customer spends with Pivotal, and how much is concentrated in the large customers? And how much they are actually growing customers that are significant to the bottom line and not just startup dreams?

The growth in subscription revenue looks very intriguing, I agree. But if they already had those 40 huge customers, and then they changed their entire business to SaaS-based, it would make total sense for those numbers to grow, they already have large enterprises to spend the money! I’m curiso

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So I know I’m late to the discussion, but I have thoroughly enjoyed the deep dive into Pivotal, and the way this board can analyze a company.

My main question I haven’t seen anyone address is this:

The company is worth $5B. $509M in revenue last year. And all of this with 319 customers?

That would imply at best, $1.5M spend per customer each year if all customers were the same. However, I suspect that most of the 319 customers are not spending anywhere near $1.5M on pivotal. They even promote this on their own website here: https://pivotal.io/hellogbye

HelloGbye is a startup based around a travel app. They have 5 employees. They used Pivotal’s office space as their own. Does anyone think they are spending $1.5M on the pivotal product? They even promote here how affordable their service is: https://run.pivotal.io/pricing/

Sure, they boast “7 of the largest banks, 9 of the largest automakers, 7 of the largest insurers, 8 of the largest retailers, and 9 of the largest Telcos” work with them. But that all combined is 40 customers. How much of that $509M in revenue came from those 40 customers? And last year they averaged 11 new customers per quarter. I know we have been over that, but how many of those 45 new customers are startups like HelloGbye that will never reach the level of Citibank or Liberty Mutual?

One of the reasons I invested in INST was because through this board we found fine print details about their pricing and how much each customer was spending on their service. That investment has been one of the best I have owned the last 8 months. Is there any clarity anywhere on how much the average customer spends with Pivotal, and how much is concentrated in the large customers? And how much they are actually growing customers that are significant to the bottom line and not just startup dreams?

The growth in subscription revenue looks very intriguing, I agree. But if they already had those 40 huge customers, and then they changed their entire business to SaaS-based, it would make total sense for those numbers to grow, they already have large enterprises to spend the money! I’m curious how much they are actually growing customers that add the same value as Citi or LM.

Thanks for the discussion. I’m happy to follow along.

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And I apologize for the double post…my 11 month old baby girl thought it was funny to sneak up on my computer and hit submit before i was ready :slight_smile:

the 319 customers are subscription customers. They have ~260 million of subscription revenue and ~250 million of service revenue. 810K average per customer for subscription revenue. I’m not sure how many service customers they have.

best,
Ethan

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Sure, they boast “7 of the largest banks, 9 of the largest automakers, 7 of the largest insurers, 8 of the largest retailers, and 9 of the largest Telcos” work with them. But that all combined is 40 customers.

I think Epictetus makes a very important point. That 158% (which as Bert aptly notes is a large part of the investing thesis) means that the companies that are customers are drastically ramping up their usage. Especially the large companies. Great news of course…but is this also a threat? Once these 40 or so large companies have ramped, and are subscribed to all the services Pivotal can reasonably provide them, that 158% could drop pretty quick. Hard to know how far along the big companies are, but we know they didn’t bring a ton of new ones on recently to take the place of the ones who may have already ramped.

If adding new customers turns out to be difficult, as we’ve seen with some other SaaS companies, revenue growth rate could fall precipitously.

SteppenWulf, do you work for a large organization? Have you seen increased adoption of Pivotal by your company each year, and do you think it will continue to increase? For how long? Do you think smaller organizations would have a need to use Pivotal to the extent your company does?

Bear
proceeding cautiously, though I did buy a few June call options

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I think Epictetus makes a very important point. That 158% (which as Bert aptly notes is a large part of the investing thesis) means that the companies that are customers are drastically ramping up their usage. Especially the large companies. Great news of course…but is this also a threat? Once these 40 or so large companies have ramped, and are subscribed to all the services Pivotal can reasonably provide them, that 158% could drop pretty quick…

SteppenWulf, do you work for a large organization? Have you seen increased adoption of Pivotal by your company each year, and do you think it will continue to increase?

Hey Bear,

I’ve spent about half my time in startups and the other half in the Fortune 500 - currently I’m responsible for the Innovation Lab and cloud migration in one the largest banks in the world, and previous to this, helped another very large US Bank make the transition to the cloud. My view is slanted toward the financial market - although I’ve worked in telecom, automotive, software, and entertainment industries, also, that was before the cloud was big.

From my point of view, we are in the early days of the transition of enterprise clients to the cloud. The vast majority of enterprises have started to realize that there are big cost savings and agility benefits to getting on the cloud, but have just started putting their toes in the water. They all have their own security groups that have to get comfortable, and their processes and tools groups who have to adapt to a completely new way of doing business. Not to mention the long term budget reductions in the infrastructure group which are being resisted by those groups.

This is Pivotal’s market - easing entrenched IT groups’ concerns and simplifying their move to the cloud in a vendor neutral way. I think we have two hypergrowth trends occuring at once. Existing clients moving from proof of concept to wider adoption, and new clients realizing they are falling behind and rushing to get something on the cloud.

The discussion coming from Pivotal on the growth side does concern me. Why did they focus on growing additional business from their existing clients last year, and why are they focusing on new clients this year? In such a hypergrowth environment, shouldn’t they have an enterprise sales strategy that allows them to grow both, and shouldn’t they be vastly expanding their sales team? Saul did suggest I was a bit naiive in this, though - he suggested that their current growth rate might be as high as a company can sustain and manage.

Anyway, circling around to answer your question, I don’t think there is any worry about the number of addressable clients for Pivotal. The number is enormous, in almost all industries. Financial services are usually early in new trends, and most big banks aren’t there yet. If you walk back to industries like manufacturing that are slow to adopt new technologies, they are just starting to look. The client growth should be enormously accelerating over the next few years, and I’ll be worried if it isn’t.

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Interesting, SteppenWulf. How long have you been at the bank you’re currently with? Have you seen increased usage of Pivotal by your company each year, and do you think it will continue to increase at a similar pace? For how long? I’m curious about what causes organizations like yours to spend more and more with Pivotal, as evidenced by their 158% expansion rate.

Do you think smaller organizations would have a need to use Pivotal to the extent your company does? You said that “The vast majority of enterprises have started to realize that there are big cost savings and agility benefits to getting on the cloud, but have just started putting their toes in the water.” Just wondering if that’s only the largest enterprises…and maybe not all industries.

Thanks,
Bear

Why did they focus on growing additional business from their existing clients last year, and why are they focusing on new clients this year?
a complete WAG but I have seen this before in companies that had a flawed salesperson compensation plan. Salespeople follow the money they get before following the money the company gets.

When I started 2 yrs ago at my current bank, we had just made the decision to use Pivotal. I was brought on to help transition them to the cloud and to micro-service agile architecture. We actually won the award for 2017 as the best digital bank in the world, due to this transition and the mobile first apps we developed as part of it.

From the point of Pivotal use, we are currently using Pivotal and the cloud for 10 (5 in NA, 2 in Europe, 3 in Asia) of our over 1000 public facing global applications. We are just now examining public cloud - in fact I recently presented our business case for transitioning some apps to public cloud.

You can reasonably expect that in the next 5 years we’ll transition a majority of our customer facing applications to the cloud, and perhaps start moving some of them to the public cloud. All of our new applications and the things coming out of our Innovation Lab are going to Pivotal (and most to Mongo) by default, unless there are reasons not to.

Prior to this, I worked as a consultant to another huge US bank that had made the strategic move to relocate a lot of their apps out of their data centres to the Amazon cloud. They ran into trouble in the port and brought me in to help. I finished that engagement, but keep in touch with the Managing Director who brought me on. They are now considering moving away from a direct Amazon process to a Pivotal architecture to avoid vendor lock-in.

I also previously worked at one of the top automotive company in the world. Manufacturers are usually slow to move to the latest IT, but car companies are an exception because of the amount of new technology going into the “Connected Vehicle” initiative and self-driving cars. They are moving to Pivotal for their thousands of global apps, not only in the offices, but especially for all the applications running in the cars.

Just three examples I’ve personally seen of the amount of Pivotal growth to look forward to, not only in the financial sector.

To answer your other question, I think the Pivotal opportunity is primarily in large companies. Startups and small companies don’t have time to worry about vendor neutrality. They already have common processes because they only have a single IT group. They’ll just choose a cloud vendor or container, and get working to satisfy their customers’ needs.

You need companies with a complex IT group, with pressures from different groups to use different tools, competing against pressures from enterprise architecture, security, compliance, to simplify IT processes and reduce costs to get the maximum value from Pivotal.

Now when I say large companies, it really means practically any company traded on a major public exchange - what I’m really excluding is Ma and Pa shops and one-product companies. A simple test - if the company is large enough to need an enterprise architecture group, it is a very likely candidate for Pivotal.

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Wulf,

We’ve had some lively debate on MongoDB in the recent past.

What is ur take on mdb?

How pervasive is the database?

Is the premium version worth what mdb charges?

What line does one cross to go from the free database to the subscription?

Do u use other dbs or mostly Mongo?

Thx for ur input ahead of time.

Rizz

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Hi folks,

I’ve gone back to look at this deep-dive thread.

I’m also in IT (since '87), working for insurance companies until recently, and now working for a vendor that specializes in corporate and bank owned life insurance (COLI/BOLI) .

I’m probably in the least cutting edge area of IT, which is group life, so I’m just learning some of this now, and I don’t really have any insight or opinion on which direction the industry will be moving, from an insider’s perspective. But I enjoyed the back and forth between wulf and conehead. Containers (Docker) versus Pivotal.

I saw this on youtube and thought it was worth mentioning.

https://www.youtube.com/watch?v=9dvQm957wSs

Maybe it’s not “new” news to anyone, but it seems Pivotal has a “plan” or at least a “pitch” for dealing with a pro Docker or kubernetes bias. I thought that was interesting.

Randy

8 Likes