VMware could be acquiring Pivotal Software

Guy Daniels
By Guy Daniels

Aug 15, 2019

  • Pivotal spun out of EMC and VMware with an IPO in April 2012
  • Struggled to make its way since then
  • VMware remains a shareholder and partner
  • Focus on Kubernetes and multicloud PaaS growth

Pivotal Software, which offers a commercial solution based on the open-source Cloud Foundry platform, could be returning to the VMware family. The company was spun out of EMC (now DellEMC) and VMware with an IPO in April 2012. Since then, the stock market hasn’t been too supportive of the venture, which could explain why VMware yesterday confirmed that it is in talks to buy the software development platform.

Parent company Dell Technologies filed a Schedule 13D/A with the US Securities and Exchange Commission related to ongoing discussions between VMware and Pivotal around a potential transaction. It also made the briefest of statements:

“Pivotal is a long-term strategic partner and we’re already successfully collaborating to help enterprises in their application development and infrastructure transformation,” said the company in its statement. “There can be no assurance that any such agreement regarding the potential transaction will occur, and VMware does not intend to communicate further on this matter unless and until a definitive agreement is reached.”

Dell is the majority shareholder of Pivotal, as well as VMware, and to complicate matters further VMware also owns an interest in Pivotal. VMware also resells Pivotal’s solutions (it is after all is a Cloud Foundry Foundation platinum member) and collaborates on its Kubernetes container orchestration manager (PKS), so it remains very much a family affair. It appears that VMware is offering $15 per share for the company and whilst this is a nice mark-up on Pivotal’s current stock price is the same as the original IPO price.

VMware looks to be marshalling its forces for a renewed assault on the cloud native market. The company is battling both OpenStack and containers, which is one reason it acquired the container integration start-up Heptio and the package application start-up Bitnami. Cloud native, containers and Kubernetes are all basking in the spotlight at the moment and are also well aligned with multi-tenanted and hybrid cloud. VMware wants to extend its multi-cloud Platform as a Service reach. It’s also possible that Dell could be looking to forge closer ties between VMware and Pivotal and then add its server strengths to offer a more complete ecosystem solution. 

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