I know Pivotal is currently out of favor here, but I suspect there are more than a few people who, like myself, still own shares. Anyway, here’s the latest in my series of what should be called “What Saul Stock Companies Really Do” (Sorry, Saul).
The good news here is that unlike, say a Nutanix, Pivotal is actually really good about explaining what it’s products are and do. Here’s a short (15 minute) video of Pivotal’s VP of Cloud R&D Onsi Fakhouri running through both the problem, the ideal state, and how Pivotal helps companies get there: https://youtu.be/xdw_9dADM-4
TL;DW (Too Long: Didn’t Watch) version:
Pivotal has 4 main products:
Spring: Helps developers write code
Cloud Foundary: Helps enterprises deploy that code
Tracker: Tracks and Analyzes the running code
Labs: Consulting practice (OK, so not an actual product) to teach companies how to restructure how they build apps
If your team knows how to operate in an agile, iterative fashion, and writes code that instead of being monolithic (one big chunk) is a collection of smaller apps using/exposing micro-services, then Pivotal’s products seem like a good way to get good results on a standardized platform. If your team isn’t this top-notch, then you can bring in the folks from Pivotal Labs to coach and train your team.
That’s basically what Pivotal does. Now, what does that mean? I recommend watching the 15 minute video. If you don’t want to watch all 15 minutes, at least do these two things:
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Watch from 0:15 to 3:20 - Explains why software development is different than hardware
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Jump to “The Circle of Code” at 10:14
This summary shows how the 3 products work together, and then he goes into how Pivotal Labs consulting can change the culture of your company’s developers to be more productive.
(If you want more detail:
The section from 3:20 to 7:20 explains why many companies have trouble deploying “aaS” (as a Service) applications.
The section from 7:20 to 8:01, explains how Pivotal’s structure forces development into micro-services (those of you who managed to slog through the “Nutanix is an AI and Machine Learning Company” thread might remember a discussion about micro-services here: https://discussion.fool.com/nutanix-is-an-ai-and-machine-learnin… )
Having been involved with software development for decades, I can vouch for the validity of what Fakhouri is saying both about the problems and Pivotal’s solutions. I think the real problem with Pivotal for us as investors, however, is the need for the consulting arm, Pivotal Labs. If the only way to take advantage of this better world using Pivotal Spring, Cloud Foundary, and Tracker is to change the culture of your company, then that’s a big sales hurdle to overcome. Not many companies really want to undergo that kind of sea change. There may be some companies doing so poorly that they’ll try something like this, and there may be some companies already leaning towards this kind of development that would see Pivotal’s products as fitting into their existing style, but I have a hard time seeing big, bureaucratic companies making this large a change unless new leadership was brought in, and I have a hard time seeing companies who have a small development group also making this kind of change since they’re probably resource constrained to begin with.
In any case, making this kind of change, while good eventually, will result in short term pain and I expect many companies will have a hard time making that decision. AND, even if they do want to make that change, do they really want to lock themselves into Pivotal’s ecosystem, nice as it is, forever?
This looks to me like a company that has a strong vision. There is a definite need for Pivotal’s way of creating and deploying aaS applications. Unfortunately, at first glance, what I see is a long and difficult sales cycle. The company name, Pivotal, is appropriate as it indicates what their customers need to do: pivot. Pivoting is hard at many corporations.
More specifically, there’s not an easy way to dip your toe in before diving with Pivotal. With Nutanix, for instance, you can buy some cheapish hardware and install their software to get a server or three up and running and then deploy a small or new or ancillary application on it. With ZScaler you can change 1 or 2 internal applications to use ZScaler for authentication and see how it goes. In both cases, you’re not committing everything at once. You fire up a POC (Proof of Concept) trial balloon.
With Pivotal, however, you have to change how an entire application development group and an entire application deployment group operate. That’s not just the tools they use, but how they go about architecting an application, and then deploying it. And if you really want the benefits, you’re bringing in Pivotal’s consultants to help your team learn new ways of operating. The result will probably be great, but it’s a big initial nut to crack. Pivotal may need something like some really big reference customers and make Pivotal Labs a money losing aspect in order to gain more traction and adoption.
Anyone else think differently?