EMC, VMware Launch Pivotal Spinoff

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EMC and VMware have revealed more about their plans for Pivotal Initiative, a spinoff which will officially become its own company on April 1. They suggested that Pivotal, which will develop cloud and big data technology, could eventually reach IPO stage.

The Wall Street Journal’s Drew Fitzgerald reported, “EMC Corp. and VMware Inc. executives detailed plans to separate a disparate group of businesses into a new Web-focused software company that they could eventually take public, illustrating both companies’ push to help manage more online information. The Pivotal group—which includes VMware’s Cloud Foundry application platform service, EMC’s Greenplum data analytics software and other products—will create its own equity aimed at ‘potentially’ attracting strategic acquirers or driving an initial public offering, EMC Chairman and Chief Executive Joseph Tucci said, though he noted such goals are far away.”

ZDNet quoted EMC CEO Joe Tucci, who said, “We think this (Pivotal) has home run potential if we do it right. There’s that little ‘if’ of execution.” He continued, “We’re not thinking anything close to an IPO, but it would be a great end game.”

CRN’s Joseph F. Kovar added, “EMC for the first time also broke out financial information about Pivotal Initiative, noting that the organization expects revenue of $300 million in 2013, up 101 percent over the revenue from the prior year, and that EMC expects to invest $400 million in the organization.”

Marketwatch’s Benjamin Pimentel observed, “VMware Inc. and EMC Corp. shares rallied Wednesday after the two companies unwrapped a major push aimed at the fast-growing market for systems that allow businesses to process huge amounts of data, a trend known as ‘big data.’ … VMware was up 8.1% closing at $81.37, while EMC jumped 1.8% to close $24.90.”