Pivotal’s software factory at heart of a disruptive world

Some technology companies are so well known that they become iconic: Think Apple for design excellence, Microsoft for personal productivity, or Google for search. Others are also hugely influential but rarely appear on brand index reports because they operate in the engine room, making the picks and shovels without which modern gold rushes couldn’t take place.

One such company is Pivotal which helps companies insert some Silicon Valley mojo through its programmers and methodologies. The name might not mean much to the person in the street but the company is the go-to brand for large organisations that are being disrupted by pesky startups or otherwise feel the need to improve their software approaches. Ask HSBC, Sainsbury’s, BMW, Daimler, Volkswagen, or Allianz—they’re all customers of this modern software factory that rents out its people and processes to some of the world’s biggest brands.

“The world is flat and technology and software have proven that,” says Leo Spiegel, Pivotal’s SVP for corporate strategy when we spoke by phone recently. He’s echoing Thomas L. Friedman’s view that the modern economy is global and unfair advantages no longer exist, so pressure is placed on incumbents and those that used to have unfair advantages based on where they were from or inertia in markets.

“All of these industries have been challenged by cloud-native companies and they all have the same issue,” Spiegel concludes.

Pivotal’s role is to catalyse some fresh thinking and talent and, Spiegel says, new processes and the right people. That said, he concedes that some customers can still make rookie errors in a world where digitisation and new development models can still deliver shocks. There can sometimes be a “frozen middle” when it doesn’t work it, he says. “People at the top are saying ‘we must become digital’ and there are people at the bottom who desperately want to do the right thing and innovate, but you have this middle layer. They’re afraid and feel they’re not up to speed, and that they’re going to lose their jobs.”

You might argue that another reason for Pivotal being something of a hidden gem is that it resides in the complex and federated world of Dell Technologies, alongside EMC, VMware, RSA, Virtustream, SecureWorks, and others.

So how has that worked out?

“It’s gone phenomenally well,” Spiegel says. “Michael [Dell] is so supportive of what we do and has been really, really helpful.” The new Dell is “the largest startup ever created”, he argues, and it creates a virtuous circle for all participants.

“There isn’t a company on the planet probably that we don’t have senior relationships with. Michael in his own right is highly respected, he’s very active and is highly involved in a lot of events. That gives us deeper, broader access into the enterprise. There isn’t another company that can provide the set of infrastructure that we can.”

Another who is still “very engaged and involved” is Paul Maritz, the former CEO of the company and before that a legendary Microsoft executive and VMware CEO who was once tipped to return and take over when Steve Ballmer left the Redmond hot seat.

Despite the Dell comments, Pivotal executives have made no secret of seeing an eventual IPO on the cards and with annual revenues more than doubling to $270 million the last time the firm showed its hand in March, it’s likely to be a whale that gives Pivotal some overdue attention.

“We were always set up to become an independent public company,” Spiegel says. “But we’re just focusing on our customers and scaling.”

Spiegel is a seasoned executive who knows both sides of the funding fence. He also serves as managing partner at southern Californian venture firm Mission Ventures, the lead investor in Greenplum, the data management firm which was acquired by EMC in 2010 and then Pivotal in 2012. (Confusing? I know…)

After we divert briefly to talk about EMC’s swooping for VMware in 2003 to capture one of the greatest business bargains ever, Spiegel says he can see something analogous to VMware in Pivotal.

“In every generation or paradigm of computing there are a handful of companies that transform the industry and create a lot of financial reward,” he says. “I think Pivotal is positioned to be that company. The natural place to compare might be an Amazon.”