Apologies, recently I’ve just been too busy to read much less write.
I feel guilty since I feel I owe this board a lot, both for interesting discussions and some great investment results, and also have some responsibility since I brought PVTL to this board, so I don’t like to disappear. I had a perfect storm - I went on vacation for my anniversary (rule: no work or investing), then I have some new responsibilities at work, including a couple of new teams who are now reporting to me. I was spending too much on these boards, so I’m going to try to manage it, but I’ll be on periodically. If someone wants my opinion, you are welcome to reply to one of my posts and click “email reply to author” so I see it, and I’ll get back to you.
So Saul did a great job of delving into my thinking and posting what I was thinking - thank you.
I just wanted to explaing my thnking on this “cloud” thing, esp with regard to PVTL and MDB.
First things first - I have a very high conviction in both MDB and PVTL because we are in a gold rush on the cloud. It’s not possible to identify with clarity who’s going to strike gold and keep it. But Pivotal and MongoDB are picks and shovels plays. You may not know every winner in the cloud today, but every winner and every loser will need a cloud-ready database, and a cloud tool set.
Mongo is the out and out winner in NoSql databases, and I don’t see anyone catching up. Not only are they ahead with every group of stakeholders, they are smart and spending R&D to get further ahead. Their growth is going to mirror the gradual replacement of Sql by NoSql over the next 20-40 years. I don’t need to know what is going on with MDB barring the product releases and quarterlies - I’m in this for the long haul. I bought on the IPO, bought more on drops and am literally planning to hold for 20 years. It’s my largest position, and I don’t worry about price action at all. I think anyone who doesn’t have this in their portfolio is missing out on the biggest (almost) guaranteed long term opportunity out there.
Pivotal is the out and out winner in the enterprise cloud tools space. Productivity increases for developers are phenomenal, and it also keeps you vendor-independent. I don’t argue with some developers on the boards here who suggest other tools are better - developers always have opinions, and they may be right. But it’s not the best technology that wins, but the combination of the best marketing, lack of vetoes, and the technology that solves the problems for the decision maker - which in enterprises is rarely the developer. But Pivotal started as a 5% investment for me, and it has grown to 10%, but is still a third of Mongo - just to provide a view of my comparative conviction.
Now technology moves fast, and nothing is guaranteed. A new NoSql database could come out and beat Mongo, or the Mongo team could completely screw up in how they invest for the future. I can’t see how it could happen today, but that is a defect in my imagination, not a guarantee it won’t happen. As my core competency is as a solutions architect, my thinking is always turned toward risk vs reward - there are both known and unknown risks for every solution, and the architect’s job is to maximize potential reward while minimizing risk. looking many years in the future. That’s also what I try to do as an investor.
So going to the Mongo conference was eye-opening for me - as these conferences often are. I had a chance to speak to a lot of CTOs outside of the financial sector, as well as senior people in various tech companies.
What I learned, surprisingly, had as much to do with Pivotal as Mongo.
Mongo is pushing their RedHat Openshift partnership hard because RedHat is offering a containerized Mongo offering. This hit a blind spot for me - normally you have code running in your dev process and spinning up instances. But databases are usually in a separate path - if they are on-premises, you either spin up a virtual machine or a physical machine to put them on, and then reference them from your application. I didn’t think about spinning them up in a Docker container (by the way, there seems to be a misunderstanding on this board - Kubernetes is a system to manage Docker containers, which are open source Linux containers).
Is this attractive? MongoDB seems to think it is, presumably from discussions with their clients. Of course the easiest thing would be to use Mongo Atlas, but for enterprise companies that are not comfortable with their data sitting on the public cloud, containers seems attactive compared to virtual machines.
Now Pivotal was also at the Mongo conference with their containers, but it is RedHat that was front and centre and had the mindshare at Mongo.
So this becomes a long term question for Pivotal. How do they handle data containers? PKS should support them, but they could also implement new data containers in the Pivotal PAAS (Pivotal uses their own private containers under the covers). Kubernetes is growing fast, though I don’t see it being an alternative to Pivotal - “and” rather than “or”. Pivotal provides the huge productivity improvement that other technologies can’t compare with right now. But I will be looking at what they are doing concerning data and containers in upcoming product and quarterly announcements.
Another interesting note - Nutanix was at the conference with both senior tech and sales guys, and I had a chance to have some conversations - Nutanix is very hot on Pivotal and their sales forces sometimes work together on prospects.
But very interestingly, Nutanix was even hotter on IBM! IBM’s new Power chips and servers, according to Nutanix, was amazing at powering data slices - three times the performance of Intel and Nvidia systems! I haven’t heard this before - not sure of the details but I’ll just put it out there and let others verify.
Since the conference I’ve taken small positions in RedHat, to keep an eye on what they are doing with Kubernetes.
I’ve also taken a position with IBM, as they have been doing a lot of interesting things in the cloud that they aren’t yet getting credit for. They have been very late to the game, but the ship is facing the right way now. They are another picks and shovels provider - they will do a lot of tools and services business from the cloud, and they will also get new products out there. IBM has a nice dividend and is quite a good value - I know it is not a typical stock for this board, but I think it is worth a look.