VMware completes Pivotal acquisition

It has marked the occasion by setting up a new business unit that will be responsible for VMware's cloud native applications offerings.
Written by Aimee Chanthadavong, Contributor

VMware has announced it has completed the acquisition of cloud-native platform provider Pivotal Software, following a $2.7 billion deal that was sealed last August.

As part of completing the acquisition, Pivotal will now operate as a wholly-owned subsidiary of VMware. It has also set up the Modern Applications Platform Business unit, which will be responsible for VMware's cloud-native applications offerings.

The new unit, according to CEO Pat Gelsinger, will be led by the company's executive vice president Ray O'Farrell and be made up of a combination of Pivotal and VMware cloud-native applications teams.

"As Pivotal is now part of VMware, I want to thank the Pivotal leadership team for building a great company. Together, we're poised to be the leading enabler of Kubernetes with a deep understanding of both operators and developers," he said.

Must read: Why VMware's Kubernetes investment will shape your multi-cloud strategy

Last August, Gelsinger told ZDNet that the acquisition of Pivotal was both a defensive and offensive play, one allowing VMware to position itself as being a relevant player in the world of next-generation applications.

"You're not positioned to capture people's next-generation applications and as they build applications they can shift away from your platform," he said at the time while quoting market analysts.

"Three years ago, your biggest risk was cloud; six years ago, your biggest risk was Open Stack. If you look at it now, you can clearly say, 'Hey, these next-generation applications, are you going to be the enterprise supplier of choice?'. So in that sense, I think we had a bit of defensive risk ... our platform was at risk.

"At the same time, if you look at the dollars, the business value at play in the developer layer -- a lot of money there. It's a very rich, offensive opportunity as well -- both defense and offense -- and if we expand the value proposition for all of the VMware operators today, to be able to effectively reach the developers and the application in a much more effective way than they do today ... if we can bring those worlds together, that's a pretty huge benefit for our customers as well."

See also: Kubernetes: A cheat sheet (TechRepublic)

Around the same time, the company highlighted how the Pivotal acquisition will play a vital role in VMware Tanzu app portfolio.

VMware also recently completed the integration of cybersecurity firm Carbon Black, a deal that was worth $2.1 billion.

In November, the company reported third quarter earnings of $621 million up 12% year on year. It also reported hybrid cloud subscription and SaaS revenue was 13% of total sales during the period.

Dell Technologies is now the owner of both VMware and Pivotal. 

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