Pivotal Seeks Better Enterprise Cloud, with EMC Roots and GE Cash

Can you think of the last time you heard about a startup that had 1,250 employees and a valuation of over $1 billion on the day it launched? I can’t.

But then, Pivotal isn’t your typical startup. Unveiled today at a San Francisco press event led by its CEO Paul Maritz, Pivotal is an independent company that draws most of its DNA from storage giant EMC’s family of companies and initiatives.

It’s starting out with an ambitious mission: to give large enterprises access to the same kind of cloud computing infrastructure that allows the giant consumer Internet companies to scale and innovate so quickly. And to pull off that mission, it has recruited people and technologies from EMC itself; its Palo Alto, CA-based virtualization subsidiary VMware; San Mateo, CA-based big data analytics subsidiary Greenplum; and namesake Pivotal Labs, a provider of agile software development services.

Pivotal is based in San Francisco and has offices in Boulder, Denver, New York, and Boston. The spinoff’s existence has been an open secret since late 2012, shortly after Maritz handed the CEO role at VMware to former EMC president and chief operating officer Pat Gelsinger. So, much of today’s event amounted to a confirmation of and elaboration on past news.

What was unexpected today, however, was the announcement that there’s a new, non-EMC player in the picture: General Electric, which plans to buy 10 percent of Pivotal for some $105 million. That puts Pivotal’s value at $1.05 billion right out of the gate.

Bill Ruh, a GE vice president who runs the company’s global software center in San Ramon, CA, was on hand for the event. He said GE is interested in new enterprise computing infrastructures because it’s building more intelligence into its own industrial products—from medical scanners to jet engines—and “analytics is going to be a big part of that.” (Maritz and Ruh are pictured above right. See more comments from Ruh below.)

Pivotal's cavernous, developer-filled office on Howard Street in San Francisco

Pivotal's cavernous, developer-filled office on Howard Street in San Francisco.

The market opening for a company like Pivotal is this: large enterprises have a bad case of consumer Internet envy. They look at companies like Facebook, Google, Amazon, and Yahoo—which have spent the last decade building a new class of scalable, distributed, automated systems for storing, processing, and analyzing data—and wish they could use similar cloud technologies to innovate faster and create new experiences for their own customers.

But for a variety of reasons, they can’t. Many of the cloud technologies created by Google and its ilk are proprietary; others are open-source, meaning they aren’t private or secure enough for enterprise needs. But most importantly, today’s cloud platforms they don’t play well with legacy computing systems based on earlier client-server or mainframe architectures.

“The reason for Pivotal’s existence is that we believe there is a need for a new platform for a new era,” Maritz said at today’s event, which was webcast to a reported audience of 4,000. “We need to allow enterprise to partake of these capabilities that we, somewhat tongue-in-cheek, call consumer-grade capabilities. The gold standard in many ways today is to be found in the consumer world, and we need to bring that back to the enterprise world.”

How does that translate into actual products and services? Scott Yara, a Greenplum co-founder who is now Pivotal’s senior vice president for platform and products, said Pivotal plans to introduce a new “platform-as-a-service” or PaaS called Pivotal One by the fourth quarter.

Based on Pivotal’s early (and somewhat sketchy) explanation, you can think of Pivotal One as an enterprise-friendly equivalent of Amazon Web Services or Rackspace Hosting, which are both used extensively by small startups in place of building their own IT infrastructures. Pivotal One will be built around a “data fabric” based on the Hadoop distributed computing and storage framework, a now-standard element of cloud systems that traces its roots to Google.

Sitting “above” the data fabric, in a sense, will be an application platform based in part on Spring, a development framework favored by many Java programmers. It will be designed to help enterprises emulate the Internet giants by building new services and easily moving them “from development to testing to a production environment” without months of orchestration, Yara said. The application platform will include built-in analytics services to free developers from having to instrument all their code by hand, he added.

And sitting underneath the data fabric will be a “cloud fabric” based on Cloud Foundry, an open-source hosting service created by VMware. It will allow Pivotal One customers to connect to a variety of outside cloud services, including Amazon Web Services, private clouds, and clouds based on the OpenStack infrastructure-as-a-service standard.

“Bringing these things together is something that is going to take us quite a bit of time,” Yara cautioned. “Our notion is to provide first commercial release in the fourth quarter, or less than 6 months from now. However, I think that the journey to executing the full vision of Pivotal One will be measured in years, not months.”

After the speeches by Maritz and Yara, I asked GE’s Bill Ruh how the strategic partnership with Pivotal came about. “We certainly use EMC and VMware in our own IT department, but actually the connection didn’t come through that,” Ruh said.

Scott Yara, Pivotal's senior vice president of platform and products, speaking at today's launch event.

Scott Yara, Pivotal's senior vice president of platform and products, speaking at today's launch event.

He says researchers at GE’s San Ramon software center decided about nine months ago to experiment with applications based on Hadoop, but they soon realized it didn’t have all the features GE would need to support industrial-grade services. And the first wave of Hadoop companies, such as Cloudera, were focused mainly on providing support rather than help with application and infrastructure development.

“As we were looking at what we had to do to build these new industrial Internet services, we realized that we needed to think about platforms that would enable us to build and launch services very rapidly, and we realized we weren’t going to be able to build it all from scratch,” Ruh says. “We needed some partners. When I met with Paul and we started having a conversation, we didn’t even know about Pivotal. But as we started talking, he came in and said, ‘We are doing this bigger thing and we would love to talk about how we could work together.’ We felt like this was a horse we could ride on.”

Ruh says he doesn’t expect GE’s investment will buy the company any special influence with Pivotal, but he does think GE will act as a “first customer” for many Pivotal creations. “We will be making lots of announcements in the future about those applications,” Ruh says. “We will certainly, as a company, be doing a lot with this.”

Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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