Let’s establish up front that the primary motive behind the Pivotal spinoff strategy is to create value for shareholders of EMC, and to an extent, VMWare. Creating and building value for all stakeholders is inherent in any enterprise mission statement. To that end, expect an IPO sometime in the not-too-distant future. Hence, the Pivotal spinoff is about economics and value.
The next question is how Pivotal’s strategy will generate value for customers. Economics is also behind the two fundamental market drivers underpinning the Pivotal spinoff. First is the capacity management burden and rising infrastructure costs on enterprise budgets caused by private cloud and bring your own device (BYOD) initiatives. This hinders IT’s ability to contribute positively to business mission owing to lost productivity amid in-house competition for project resources.
Second, in turn, is the accelerated adoption of cloud services by enterprises and the concomitant boom in data center capacity builds by cloud service providers. While enterprises scale back their data center investments, cloud providers are furiously scaling theirs’ in order to offer the best value and availability to customers. After all, every company wants to establish itself as having the fastest, best-performing web sites, applications and services.
We are seeing the greatest capacity expansion since the telecom deregulation act of 1996 fueled a fiber plant explosion. The difference now is that capacity is chasing demand. Web site operators, regional data center developers and cloud service providers are all competing for space and power. What’s more, the dawning age of software defined data centers is changing the economics for the better. The flexibility to repurpose facilities and infrastructure quickly to adapt to changing workloads significantly reduces the risk of building massive data centers, enabling attractive returns on capital investments.
A Noble Premise…
Back to Pivotal. Its raison d’etre is to bring large-scale data management and rapid application development capabilities to the enterprise. The enabler to this is automating the provisioning of private and public clouds, including enterprises using IaaS providers. By combining different facets of EMC and VMWare, Pivotal One aims to give companies greater independence and faster time to value in rolling out in-house or custom-built cloud-based big data applications.
The platform, which can run on third-party IaaS such as Amazon Web Services (AWS), Microsoft Azure, or OpenStack, as well as on VMWare’s vSphere and vCloud Director, integrates data fabrics, modern programming frameworks and cloud portability while still supporting legacy applications. For scale and flexibility, the underlying components of Pivotal One are fashioned on open source components.
The cloud fabric is based on the Cloud Foundry PaaS software, an abstraction layer that pulls in IaaS services from third-party providers. The data fabric, Pivotal HD, blend the Hadoop Distributed File System (DFS) with Pivotal’s own distribution of Hadoop, Greenplum’s database analytics and VMWare’s GemFire in-memory caching technology. The application fabric, based on the agile Spring application developer framework, provides tools for enterprises to quickly build and deploy their own cloud applications. And to help with this complexity, there is Pivotal Labs, which conveniently exists to provide application design, development and management services.
…But a Herculean Task
Pivotal faces a Herculean task. Integrating the multiple components of the platform – none of which were developed or designed to work together – will take ages, if ever, to complete. Catering to the hydra of infrastructure, data management and analytics and application development constituencies will be extremely difficult when each of these groups may opt for best-in-breed solutions to avoid complexity and lock-in. Both EMC and VMWare already have experienced this.
In addition, IaaS providers are not likely to embrace the independence message and could undermine the platform’s ambitions. Finally, its own implementation of HAWQ SQL querying and performance analytics with GemFire will have competitors and customers questioning Pivotal’s commitment to the Apache Hadoop community, and DFS in particular.
VMWare created enormous value for both EMC shareholders as well as its customers. However, as the company tried to move upstream from the hypervisor to a management platform, the value proposition – for both customers and investors became less compelling. While a Pivotal IPO may also succeed in creating value for EMC shareholders, the company is facing a broad base of large and established competitors as well as ambitious, well-funded start-ups. Paul Maritz and his team will be more challenged this time. The company will have to execute flawlessly on multiple fronts in order to create and sustain value for its customers.
Image: Timothy Sykes
