@Phoolio
While they are focused on larger enterprises, at this point, who cares? There are still plenty left. 1/3 of Forbes 100 uses Pivotal. Plenty of growth left.
Further, PKS is a bit lower ASP. Maybe this helps with the mid-market, but it isn’t something we need to rely upon.
I am still very impressed with the Pivotal technology value proposition. They provide so much value that enterprises are willing to pay a lot for them. I’m also blown away by the entire Spring suite. There is hardly a Java team on the planet that doesn’t use that.
My concern is that they aren’t leveraging these amazing assets to do much bigger growth across the middle market as well as the top of the market.
Companies like Mongo have similar tech/mindshare advantages and leverage those advantages to grow so fast that they take away the oxygen from competitors. Mongo is so far ahead, that it is hard to imagine anyone catching up to them. Pivotal has unbelievable assets, but is not accelerating like that.
For one example, their net expansion rate is 149% which is amazing. But they are gaining customers by onesies and twosies with salespeople out in the field.
They own Spring which is a part of practically every Java project in the Universe. Why haven’t they yet found a way to leverage Spring to naturally increase Pivotal use, without needing sales people and marketing? Where is their revenue conversion from Spring? There are lots of ways they could get revenue from Spring, without poisoning the well of the open source community love. It takes care and strategy to find them - that’s what a management team is supposed to be for.
I totally get the innovation of Pivotal’s engineering team. They have created amazing technology, and they also kept ahead of the curve. When containers came out of left field they responded fast. Basically I’m wondering if PVTL management is lacking a similar innovative spirit.
I tend to have a longer term investment horizon than most people on this board, I think. I really plan to hold companies for 20 years, and hold my average investment for 3-5 years.
I do agree that Pivotal is growing well, but conservatively - they are landing and expanding, not combining it with the power of the internet to get viral growth. As such, I fear that in the long run someone else will come up with viral growth and beat them.
So I am in for now, and think they are a good bet for the near term. That’s why I’m keeping my investment, and may even trade a few LEAPS. But for now I look at them as a relatively short term investment until they prove they can take over a market that their product currently has a big advantage in.
Does that make sense?