Unpacking how Dell’s debt load and VMware stake could come together

Last week, we discussed the possibility that Dell could be exploring a sale of VMware as a way to deal with its hefty debt load, a weight that continues to linger since its $67 billion acquisition of EMC in 2016. VMware was the most valuable asset in the EMC family of companies, and it remains central to Dell’s hybrid cloud strategy today.

As CNBC pointed out last week, VMware is a far more valuable company than Dell itself, with a market cap of almost $62 billion. Dell, on the other hand, has a market cap of around $39 billion.

How is Dell, which owns 81% of VMware, worth less than the company it controls? We believe it’s related to that debt, and if we’re right, Dell could unlock lots of its own value by reducing its indebtedness. In that light, the sale, partial or otherwise, of VMware starts to look like a no-brainer from a financial perspective.

At the end of its most recent quarter, Dell had $8.4 billion in short-term debt and long-term debts totaling $48.4 billion. That’s a lot, but Dell has the ability to pay down a significant portion of that by leveraging the value locked inside its stake in VMware.

Yes, but …

Nothing is ever as simple as it seems. As Holger Mueller from Constellation Research pointed out in our article last week, VMware is the one piece of the Dell family that is really continuing to innovate. Meanwhile, Dell and EMC are stuck in hardware hell at a time when companies are moving faster than ever expected to the cloud due to the pandemic.

Dell is essentially being handicapped by a core business that involves selling computers, storage and the like to in-house data centers. While it’s also looking to modernize that approach by trying to be the hybrid link between on-premise and the cloud, the economy is also working against it. The pandemic has made the difficult prospect of large enterprise selling even more challenging without large conferences, golf outings and business lunches to grease the skids of commerce.


By Ron Miller

Dell’s debt hangover from $67B EMC deal could put VMware stock in play

When Dell bought EMC in 2016 for $67 billion it was one of the biggest acquisitions in tech history, and it brought with it a boatload of debt. Since then Dell has been working on ways to mitigate that debt by selling off various pieces of the corporate empire and going public again, but one of its most valuable assets remains VMware, a company that came over as part of the huge EMC deal.

The Wall Street Journal reported yesterday that Dell is considering selling part of its stake in VMware. The news sent the stock of both companies soaring.

It’s important to understand that even though VMware is part of the Dell family, it runs as a separate company, with its own stock and operations, just as it did when it was part of EMC. Still, Dell owns 81% of that stock, so it could sell a substantial stake and still own a majority the company, or it could sell it all, or incorporate into the Dell family, or of course it could do nothing at all.

Patrick Moorhead, founder and principal analyst at Moor Insights & Strategy thinks this might just be about floating a trial balloon. “Companies do things like this all the time to gauge value, together and apart, and my hunch is this is one of those pieces of research,” Moorhead told TechCrunch.

But as Holger Mueller, an analyst with Constellation Research, points out, it’s an idea that could make sense. “It’s plausible. VMware is more valuable than Dell, and their innovation track record is better than Dell’s over the last few years,” he said.

Mueller added that Dell has been juggling its debts since the EMC acquisition, and it will struggle to innovate its way out of that situation. What’s more, Dell has to wait on any decision until September 2021 when it can move some or all of VMware tax-free, five years after the EMC acquisition closed.

“While Dell can juggle finances, it cannot master innovation. The company’s cloud strategy is only working on a shrinking market and that ain’t easy to execute and grow on. So yeah, next year makes sense after the five year tax free thing kicks in,” he said.

In between the spreadsheets

VMware is worth $63.9 billion today, while Dell is valued at a far more modest $38.9 billion, according to Yahoo Finance data. But beyond the fact that the companies’ market caps differ, they are also quite different in terms of their ability to generate profit.

Looking at their most recent quarters each ending May 1, 2020, Dell turned $21.9 billion in revenue into just $143 million in net income after all expenses were counted. In contrast, VMware generated just $2.73 billion in revenue, but managed to turn that top line into $386 million worth of net income.

So, VMware is far more profitable than Dell from a far smaller revenue base. Even more, VMware grew more last year (from $2.45 billion to $2.73 billion in revenue in its most recent quarter) than Dell, which shrank from $21.91 billion in Q1 F2020 revenue to $21.90 billion in its own most recent three-month period.

VMware also has growing subscription software (SaaS) revenues. Investors love that top line varietal in 2020, having pushed the valuation of SaaS companies to new heights. VMware grew its SaaS revenues from $411 million in the year-ago period to $572 million in its most recent quarter. That’s not rocketship growth mind you, but the business category was VMware’s fastest growing segment in percentage and gross dollar terms.

So VMware is worth more than Dell, and there are some understandable reasons for the situation. Why wouldn’t Dell sell some VMware to lower its debts if the market is willing to price the virtualization company so strongly? Heck, with less debt perhaps Dell’s own market value would rise.

It’s all about that debt

Almost four years after the deal closed, Dell is still struggling to figure out how to handle all the debt, and in a weak economy, that’s an even bigger challenge now. At some point, it would make sense for Dell to cash in some of its valuable chips, and its most valuable one is clearly VMware.

Nothing is imminent because of the five year tax break business, but could something happen? September 2021 is a long time away, and a lot could change between now and then, but on its face, VMware offers a good avenue to erase a bunch of that outstanding debt very quickly and get Dell on much firmer financial ground. Time will tell if that’s what happens.


By Ron Miller

Google makes it easier to migrate VMware environments to its cloud

Google Cloud today announced the next step in its partnership with VMware: the Google Cloud VMware Engine. This fully managed service provides businesses with a full VMware Cloud Foundation stack on Google Cloud to help businesses easily migrate their existing VMware-based environments to Google’s infrastructure. Cloud Foundation is VMware’s stack for hybrid and private cloud deployments

Given Google Cloud’s focus on enterprise customers, it’s no surprise that the company continues to bet on partnerships with the likes of VMware to attract more of these companies’ workloads. Less than a year ago, Google announced that VMware Cloud Foundation would come to Google Cloud and that it would start supporting VMware workloads. Then, last November, Google Cloud acquired CloudSimple, a company that specialized in running VMware environments and that Google had already partnered with for its original VMware deployments. The company describes today’s announcement as the third step in this journey.

VMware Engine provides users with all of the standard Cloud Foundation components: vSphere, vCenter, vSAN, NSX-T and HCX. With this, Google Cloud General Manager June Yang notes in today’s announcement, businesses can quickly stand up their own software-defined data center in the Google Cloud.

“Google Cloud VMware Engine is designed to minimize your operational burden, so you can focus on your business,” she notes. “We take care of the lifecycle of the VMware software stack and manage all related infrastructure and upgrades. Customers can continue to leverage IT management tools and third-party services consistent with their on-premises environment.”

Google is also working with third-party providers like NetApp, Veeam, Zerto, Cohesity and Dell Technologies to ensure that their solutions work on Google’s platform, too.

“As customers look to simplify their cloud migration journey, we’re committed to build cloud services to help customers benefit from the increased agility and efficiency of running VMware workloads on Google Cloud,” said Bob Black, Dell Technologies Global Lead Alliance Principal at Deloitte Consulting. “By combining Google Cloud’s technology and Deloitte’s business transformation experience, we can enable our joint customers to accelerate their cloud migration, unify operations, and benefit from innovative Google Cloud services as they look to modernize applications.””


By Frederic Lardinois

VMware to acquire Kubernetes security startup Octarine and fold it into Carbon Black

VMware announced today that it intends to buy early-stage Kubernetes security startup, Octarine and fold it into Carbon Black, a security company it bought last year for $2.1 billion. The company did not reveal the price of today’s acquisition.

According to a blog post announcing the deal from Patrick Morley, general manager and senior vice president at VMware’s Security Business Unit, Octarine should fit in with what Carbon Black calls its “intrinsic security strategy” — that is, protecting content and applications wherever they live. In the case of Octarine, it’s cloud native containers in Kubernetes environments.

“Acquiring Octarine enables us to advance intrinsic security for containers (and Kubernetes environments), by embedding the Octarine technology into the VMware Carbon Black Cloud, and via deep hooks and integrations with the VMware Tanzu platform,” Morley wrote in a blog post.

This also fits in with VMware’s Kubernetes strategy, having purchased Heptio, an early Kuberentes company started by Craig McLuckie and Joe Beda, two folks who helped develop Kubernets while at Google before starting their own company,

We covered Octarine last year when it released a couple of open source tools to help companies define the Kubernetes security parameters. As we quoted head of product Julien Sobrier at the time:

“Kubernetes gives a lot of flexibility and a lot of power to developers. There are over 30 security settings, and understanding how they interact with each other, which settings make security worse, which make it better, and the impact of each selection is not something that’s easy to measure or explain.”

As for the startup, it now gets folded into VMware’s security business. While the CEO tried to put a happy face on the acquisition in a blog post, it seems its days as an independent entity are over. “VMware’s commitment to cloud native computing and intrinsic security, which have been demonstrated by its product announcements and by recent acquisitions, makes it an ideal home for Octarine,” the company CEO Shemer Schwarz wrote in the post.

Octarine was founded in 2017 and has raised $9 million, according to Pitchbook data.


By Ron Miller

VMware completes $2.7 billion Pivotal acquisition

VMware is closing the year with a significant new component in its arsenal. Today it announced it has closed the $2.7 billion Pivotal acquisition it originally announced in August.

The acquisition gives VMware another component in its march to transform from a pure virtual machine company into a cloud native vendor that can manage infrastructure wherever it lives. It fits alongside other recent deals like buying Heptio and Bitnami, two other deals that closed this year.

They hope this all fits neatly into VMware Tanzu, which is designed to bring Kubernetes containers and VMware virtual machines together in a single management platform.

“VMware Tanzu is built upon our recognized infrastructure products and further expanded with the technologies that Pivotal, Heptio, Bitnami and many other VMware teams bring to this new portfolio of products and services,” Ray O’Farrell, executive vice president and general manager of the Modern Application Platforms Business Unit at VMware, wrote in a blog post announcing the deal had closed.

Craig McLuckie, who came over in the Heptio deal, and is now VP of R&D at VMware, told TechCrunch in November at KubeCon, that while the deal hadn’t closed at that point, he saw a future where Pivotal could help at a professional services level, as well.

“In the future when Pivotal is a part of this story, they won’t be just delivering technology, but also deep expertise to support application transformation initiatives,” he said.

Up until the closing, the company had been publicly traded on the New York Stock Exchange, but as of today Pivotal becomes a wholly-owned subsidiary of VMware. It’s important to note that this transaction didn’t happen in a vacuum where two random companies came together.

In fact, VMware and Pivotal were part of the consortium of companies that Dell purchased when it acquired EMC in 2015 for $67 billion. While both were part of EMC and then Dell, each one operated separately and independently. At the time of the sale to Dell, Pivotal was considered a key piece, one that could stand strongly on its own.

Pivotal and VMware had another strong connection. Pivotal was originally created by a combination of EMC, VMware and GE (which owned a 10% stake for a time) to give these large organizations a separate company to undertake transformation initiatives.

It raised a hefty $1.7 billion before going public in 2018. A big chunk of that came in one heady day in 2016 when it announced $650 million in funding led by Ford’s $180 million investment.

The future looked bright at that point, but life as a public company was rough and after a catastrophic June earnings report, things began to fall apart. The stock dropped 42 percent in one day. As I wrote in an analysis of the deal:

The stock price plunged from a high of $21.44 on May 30th to a low of $8.30 on August 14th. The company’s market cap plunged in that same time period falling from $5.828 billion on May 30th to $2.257 billion on August 14th. That’s when VMware admitted it was thinking about buying the struggling company.

VMware came to the rescue and offered $15.00 a share, a substantial premium above that August low point. As of today, it’s part of VMware.


By Ron Miller

Making sense of a multi-cloud, hybrid world at KubeCon

More than 12,000 attendees gathered this week in San Diego to discuss all things containers, Kubernetes and cloud-native at KubeCon.

Kubernetes, the container orchestration tool, turned five this year, and the technology appears to be reaching a maturity phase where it accelerates beyond early adopters to reach a more mainstream group of larger business users.

That’s not to say that there isn’t plenty of work to be done, or that most enterprise companies have completely bought in, but it’s clearly reached a point where containerization is on the table. If you think about it, the whole cloud-native ethos makes sense for the current state of computing and how large companies tend to operate.

If this week’s conference showed us anything, it’s an acknowledgment that it’s a multi-cloud, hybrid world. That means most companies are working with multiple public cloud vendors, while managing a hybrid environment that includes those vendors — as well as existing legacy tools that are probably still on-premises — and they want a single way to manage all of this.

The promise of Kubernetes and cloud-native technologies, in general, is that it gives these companies a way to thread this particular needle, or at least that’s the theory.

Kubernetes to the rescue

Photo: Ron Miller/TechCrunch

If you were to look at the Kubernetes hype cycle, we are probably right about at the peak where many think Kubernetes can solve every computing problem they might have. That’s probably asking too much, but cloud-native approaches have a lot of promise.

Craig McLuckie, VP of R&D for cloud-native apps at VMware, was one of the original developers of Kubernetes at Google in 2014. VMware thought enough of the importance of cloud-native technologies that it bought his former company, Heptio, for $550 million last year.

As we head into this phase of pushing Kubernetes and related tech into larger companies, McLuckie acknowledges it creates a set of new challenges. “We are at this crossing the chasm moment where you look at the way the world is — and you look at the opportunity of what the world might become — and a big part of what motivated me to join VMware is that it’s successfully proven its ability to help enterprise organizations navigate their way through these disruptive changes,” McLuckie told TechCrunch.

He says that Kubernetes does actually solve this fundamental management problem companies face in this multi-cloud, hybrid world. “At the end of the day, Kubernetes is an abstraction. It’s just a way of organizing your infrastructure and making it accessible to the people that need to consume it.

“And I think it’s a fundamentally better abstraction than we have access to today. It has some very nice properties. It is pretty consistent in every environment that you might want to operate, so it really makes your on-prem software feel like it’s operating in the public cloud,” he explained.

Simplifying a complex world

One of the reasons Kubernetes and cloud-native technologies are gaining in popularity is because the technology allows companies to think about hardware differently. There is a big difference between virtual machines and containers, says Joe Fernandes, VP of product for Red Hat cloud platform.

“Sometimes people conflate containers as another form of virtualization, but with virtualization, you’re virtualizing hardware, and the virtual machines that you’re creating are like an actual machine with its own operating system. With containers, you’re virtualizing the process,” he said.

He said that this means it’s not coupled with the hardware. The only thing it needs to worry about is making sure it can run Linux, and Linux runs everywhere, which explains how containers make it easier to manage across different types of infrastructure. “It’s more efficient, more affordable, and ultimately, cloud-native allows folks to drive more automation,” he said.

Bringing it into the enterprise

Photo: Ron Miller/TechCrunch

It’s one thing to convince early adopters to change the way they work, but as this technology enters the mainstream. Gabe Monroy, partner program manager at Microsoft says to carry this technology to the next level, we have to change the way we talk about it.


By Ron Miller

Kubernetes co-founder Craig McLuckie is as tired of talking about Kubernetes as you are

“I’m so tired of talking about Kubernetes . I want to talk about something else,” joked Kubernetes co-founder and VP of R&D at VMware Craig McLuckie during a keynote interview at this week’s Cloud Foundry Summit in The Hague. “I feel like that 80s band that had like one hit song — Cherry Pie.”

He doesn’t quite mean it that way, of course (though it makes for a good headline, see above), but the underlying theme of the conversation he had with Cloud Foundry executive director Abby Kearns was that infrastructure should be boring and fade into the background, while enabling developers to do their best work. “We still have a lot of work to do as an industry to make the infrastructure technology fade into the background and bring forwards the technologies that developers interface with, that enable them to develop the code that drives the business, etc. […] Let’s make that infrastructure technology really, really boring. ”

IMG 20190911 115940

What McLuckie wants to talk about is developer experience and with VMware’s intend to acquire Pivotal, it’s placing a strong bet on Cloud Foundry as one of the premiere development platforms for cloud native applications. For the longest time, the Cloud Foundry and Kubernetes ecosystem, which both share an organizational parent in the Linux Foundation, have been getting closer, but that move has accelerated in recent months as the Cloud Foundry ecosystem has finished work on some of its Kubernetes integrations.

McLuckie argues that the Cloud Native Computing Foundation, the home of Kubernetes and other cloud-native open-source projects, was always meant to be a kind of open-ended organization that focuses on driving innovation. And that created a large set of technologies that vendors can choose from. “But when you start to assemble that, I tend to think about you building up this cake which is your development stack, you discover that some of those layers of the cake, like Kubernetes, have a really good bake. They are done to perfection,” said McLuckie, who is clearly a fan of the Great British Baking show. “And other layers, you look at it and you think, wow, that could use a little more bake, it’s not quite ready yet. […] And we haven’t done a great job of pulling it all together and providing a recipe that delivers an entirely consumable experience for everyday developers.”

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He argues that Cloud Foundry, on the other hand, has always focused on building that highly opinionated, consistent developer experience. “Bringing those two communities together, I think, is going to have incredibly powerful results for both communities as we start to bring these technologies together,” he said.

With the Pivotal acquisition still in the works, McLuckie didn’t really comment on what exactly this means for the path forward for Cloud Foundry and Kubernetes (which he still talked about with a lot of energy, despite being tired of it), but it’s clear that he’s looking to Cloud Foundry to enable that developer experience on top of Kubernetes that abstracts all of the infrastructure away for developers and makes deploying an application a matter of a single CLI command.

Bonus: Cherry Pie.


By Frederic Lardinois

Nvidia and VMware team up to make GPU virtualization easier

Nvidia today announced that it has been working with VMware to bring its virtual GPU technology (vGPU) to VMware’s vSphere and VMware Cloud on AWS. The company’s core vGPU technology isn’t new, but it now supports server virtualization to enable enterprises to run their hardware-accelerated AI and data science workloads in environments like VMware’s vSphere, using its new vComputeServer technology.

Traditionally (as far as that’s a thing in AI training), GPU-accelerated workloads tend to run on bare metal servers, which were typically managed separately from the rest of a company’s servers.

“With vComputeServer, IT admins can better streamline management of GPU accelerated
virtualized servers while retaining existing workflows and lowering overall operational costs,” Nvidia explains in today’s announcement. This also means that businesses will reap the cost benefits of GPU sharing and aggregation, thanks to the improved utilization this technology promises.

vComputeServer works with VMware Sphere, vCenter and vMotion, as well as VMware Cloud. Indeed, the two companies are using the same vComputeServer technology to also bring accelerated GPU services to VMware Cloud on AWS. This allows enterprises to take their containerized applications and from their own data center to the cloud as needed — and then hook into AWS’s other cloud-based technologies.

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“From operational intelligence to artificial intelligence, businesses rely on GPU-accelerated computing to make fast, accurate predictions that directly impact their bottom line,” said Nvidia founder and CEO Jensen Huang . “Together with VMware, we’re designing the most advanced and highest performing GPU- accelerated hybrid cloud infrastructure to foster innovation across the enterprise.”


By Frederic Lardinois

VMware is bringing VMs and containers together, taking advantage of Heptio acquisition

At VMworld today in San Francisco, VMware introduced a new set of services for managing virtual machines and containers in a single view called Tanzu. The product takes advantage of the knowledge the company gained when it acquired Heptio last year.

As companies face an increasingly fragmented landscape of maintaining traditional virtual machines, alongside a more modern containerized Kubernetes environment, managing the two together has created its own set of management challenges for IT. This is further complicated by trying to manage resources across multiple clouds, as well as the in-house data centers. Finally, companies need to manage legacy applications, while looking to build newer containerized applications.

VMware’s Craig McLuckie and fellow Heptio co-founder, Joe Beda, were part of the original Kubernetes development team They came to VMware via last year’s acquisition. McLuckie believes that Tanzu can help with all of this by applying the power of Kubernetes across this complex management landscape.

“The intent is to construct a portfolio that has a set of assets that cover every one of these areas, a robust set of capabilities that bring the Kubernetes substrate everywhere — a control plane that enables organizations to start to think about [and view] these highly fragmented deployments with Kubernetes [as the] common lens, and then the technologies you need to be able to bring existing applications forward and to build new application and to support third party vendors bringing their applications into [this],” McLuckie explained.

It’s an ambitious vision that involves bringing together not only VMware’s traditional VM management tooling and Kubernetes, but also open source pieces and other recent acquisitions including Bitnami and Cloud Health along with Wavefront, which it acquired in 2017. Although the vision was defined long before the acquisition of Pivotal last week, it will also play a role in this. Originally that was as a partner, but now it will be as part of VMware.

The idea is to eventually cover the entire gamut of building, running and managing applications in the enterprise. Among the key pieces introduced today as technology previews are the Tanzu Mission Control, a tool for managing Kubernetes clusters wherever the live and Project Pacific, which embeds Kubernetes natively into VSphere, the company’s virtualization platform, bringing together virtual machines and containers.

Screenshot 2019 08 26 08.07.38 1

VMware Tanzu. Slide: VMware

McLuckie sees bringing virtual machine and Kubernetes together in this fashion provides a couple of key advantages. “One is being able to bring a robust, modern API-driven way of thinking about accessing resources. And it turns out that there is this really good technology for that. It’s called Kubernetes. So being able to bring a Kubernetes control plane to Vsphere is creating a new set of experiences for traditional VMware customers that is moving much closer to a kind of cloud-like agile infrastructure type of experience. At the same time, Vsphere is bringing a whole bunch of capabilities to Kubernetes that’s creating more efficient isolation capabilities,” he said.

When you think about the cloud native vision, it has always been about enabling companies to manage resources wherever they live through a single lens, and this is what this set of capabilities that VMware has brought together under Tanzu, is intended to do. “Kubernetes is a way of bringing a control metaphor to modern IT processes. You provide an expression of what you want to have happen, and then Kubernetes takes that and interprets it and drives the world into that desired state,” McLuckie explained.

If VMware can take all of the pieces in the Tanzu vision and make this happen, it will be as powerful as McLuckie believes it to be. It’s certainly an interesting attempt to bring all of a company’s application and infrastructure creation and management under one roof using Kubernetes as the glue, and with Heptio co-founders McLuckie and Beda involved, it certainly has the expertise in place to drive the vision.


By Ron Miller

How Pivotal got bailed out by fellow Dell family member, VMware

When Dell acquired EMC in 2016 for $67 billion, it created a complicated consortium of interconnected organizations. Some, like VMware and Pivotal, operate as completely separate companies. They have their own boards of directors, can acquire companies and are publicly traded on the stock market. Yet they work closely within the Dell, partnering where it makes sense. When Pivotal’s stock price plunged recently, VMware saved the day when it bought the faltering company for $2.7 billion yesterday.

Pivotal went public last year, and sometimes struggled, but in June the wheels started to come off after a poor quarterly earnings report. The company had what MarketWatch aptly called “a train wreck of a quarter.”

How bad was it? So bad that its stock price was down 42% the day after it reported its earnings. While the quarter itself wasn’t so bad, with revenue up year over year, the guidance was another story. The company cut its 2020 revenue guidance by $40-$50 million and the guidance it gave for the upcoming 2Q19 was also considerably lower than consensus Wall Street estimates.

The stock price plunged from a high of $21.44 on May 30th to a low of $8.30 on Aug 14th. The company’s market cap plunged in that same time period falling from $5.828 billion on May 30th to $2.257 billion on Aug 14th. That’s when VMware admitted it was thinking about buying the struggling company.


By Ron Miller

The five great reasons to attend TechCrunch’s Enterprise show Sept. 5 in SF

The vast enterprise tech category is Silicon Valley’s richest, and today it’s poised to change faster than ever before. That’s probably the biggest reason to come to TechCrunch’s first-ever show focused entirely on enterprise. But here are five more reasons to commit to joining TechCrunch’s editors on September 5 at San Francisco’s Yerba Buena Center for an outstanding day (agenda here) addressing the tech tsunami sweeping through enterprise. 

No. 1: Artificial intelligence
At once the most consequential and most hyped technology, no one doubts that AI will change business software and increase productivity like few, if any, technologies before it. To peek ahead into that future, TechCrunch will interview Andrew Ng, arguably the world’s most experienced AI practitioner at huge companies (Baidu, Google) as well as at startups. AI will be a theme across every session, but we’ll address it again head-on in a panel with investor Jocelyn Goldfein (Zetta), founder Bindu Reddy (Reality Engines) and executive John Ball (Salesforce / Einstein). 

No. 2: Data, the cloud and Kubernetes
If AI is at the dawn of tomorrow, cloud transformation is the high noon of today. Indeed, 90% of the world’s data was created in the past two years, and no enterprise can keep its data hoard on-prem forever. Azure’s CTO
Mark Russinovitch will discuss Microsft’s vision for the cloud. Leaders in the open-source Kubernetes revolution — Joe Beda (VMware), Aparna Sinha (Google) and others — will dig into what Kubernetes means to companies making the move to cloud. And last, there is the question of how to find signal in all the data — which will bring three visionary founders to the stage: Benoit Dageville (Snowflake), Ali Ghodsi (Databricks) and Murli Thirumale (Portworx). 

No. 3: Everything else on the main stage!
Let’s start with a fireside chat with
SAP CEO Bill McDermott and Qualtrics Chief Experience Officer Julie Larson-Green. We have top investors talking where they are making their bets, and security experts talking data and privacy. And then there is quantum computing, the technology revolution waiting on the other side of AI: Jay Gambetta, the principal theoretical scientist behind IBM’s quantum computing effort, Jim Clarke, the director of quantum hardware at Intel Labs and Krysta Svore, who leads Microsoft’s quantum effort.

All told, there are 21 programming sessions.

No. 4: Network and get your questions answered
There will be two Q&A breakout sessions with top enterprise investors; this is for founders (and anyone else) to query investors directly. Plus, TechCrunch’s unbeatable CrunchMatch app makes it really easy to set up meetings with the other attendees, an
incredible array of folks, plus the 20 early-stage startups exhibiting on the expo floor.

No. 5: SAP
Enterprise giant SAP is our sponsor for the show, and they are not only bringing a squad of top executives, they are producing four parallel track sessions, featuring key SAP Chief Innovation Officer
Max Wessel, SAP Chief Designer and Futurist Martin Wezowski and SAP.IO’s managing director Ram Jambunathan (SAP.iO), in sessions including how to scale-up an enterprise startup, how startups win large enterprise customers, and what the enterprise future looks like.

Check out the complete agenda. Don’t miss this show! This line-up is a view into the future like none other. 

Grab your $349 tickets today, and don’t wait til the day of to book because prices go up at the door!

We still have two Startup Demo Tables left. Each table comes with four tickets and a prime location to demo your startup on the expo floor. Book your demo table now before they’re all gone!


By Robert Frawley

VMware says it’s looking to acquire Pivotal

VMware today confirmed that it is in talks to acquire software development platform Pivotal Software, the service best known for commercializing the open-source Cloud Foundry platform. The proposed transaction would see VMware acquire all outstanding Pivotal Class A stock for $15 per share, a significant markup over Pivotal’s current share price (which unsurprisingly shot up right after the announcement).

Pivotal’s shares have struggled since the company’s IPO in April 2018. The company was originally spun out of EMC Corporation (now DellEMC) and VMware in 2012 to focus on Cloud Foundry, an open-source software development platform that is currently in use by the majority of Fortune 500 companies. A lot of these enterprises are working with Pivotal to support their Cloud Foundry efforts. Dell itself continues to own the majority of VMware and Pivotal, and VMware also owns an interest in Pivotal already and sells Pivotal’s services to its customers as well. It’s a bit of an ouroboros of a transaction.

Pivotal Cloud Foundry was always the company’s main product, but it also offered additional consulting services on top of that. Despite improving its execution since going public, Pivotal still lost $31.7 million in its last financial quarter as its stock price traded at just over half of the IPO price. Indeed, the $15 per share VMware is offering is identical to Pivotal’s IPO price.

An acquisition by VMware would bring Pivotal’s journey full circle, though this is surely not the journey the Pivotal team expected. VMware is a Cloud Foundry Foundation platinum member, together with Pivotal, DellEMC, IBM, SAP and Suse, so I wouldn’t expect any major changes in VMware’s support of the overall open-source ecosystem behind Pivotal’s core platform.

It remains to be seen whether the acquisition will indeed happen, though. In a press release, VMware acknowledged the discussion between the two companies but noted that “there can be no assurance that any such agreement regarding the potential transaction will occur, and VMware does not intend to communicate further on this matter unless and until a definitive agreement is reached.” That’s the kind of sentence lawyers like to write. I would be quite surprised if this deal didn’t happen, though.

Buying Pivotal would also make sense in the grand scheme of VMware’s recent acquisitions. Earlier this year, the company acquired Bitnami and last year, it acquired Heptio, the startup founded by two of the three co-founders of the Kubernetes project, which now forms the basis of many new enterprise cloud deployments and, most recently, Pivotal Cloud Foundry.


By Frederic Lardinois

Learn how enterprise startups win big deals at TechCrunch’s Enterprise show on Sept. 5

Big companies today may want to look and feel like startups, but when it comes to the way they approach buying new enterprise solutions, especially from new entrants, they still often act like traditional enterprise behemoths. But from the standpoint of a true startup, closing deals with just a few big customers is critical to success. At our much-anticipated inaugural TechCrunch Sessions: Enterprise event in San Francisco on September 5, Okta’s Monty Gray, SAP’s DJ Paoni, VMware’s Sanjay Poonen and Sapphire Venture’s Shruti Tournatory will discuss ways for startups to adapt their strategies to gain more enterprise customers (p.s. early-bird tickets end in 48 hours — book yours here).

This session is sponsored by SAP, the lead sponsor for the event.

Monty Gray is Okta’s senior vice president and head of Corporate Development. In this role, he is responsible for driving the company’s growth initiatives, including mergers and acquisitions. That role gives him a unique vantage point of the enterprise startup ecosystem, all from the perspective of an organization that went through the process of learning how to sell to enterprises itself. Prior to joining Okta, Gray served as the senior vice president of Corporate Development at SAP.

Sanjay Poonen joined VMware in August 2013, and is responsible for worldwide sales, services, alliances, marketing and communications. Prior to SAP, Poonen held executive roles at Symantec, VERITAS and Informatica, and he began his career as a software engineer at Microsoft, followed by Apple.

SAP’s DJ Paoni has been working in the enterprise technology industry for over two decades. As president of SAP North America, Paoni is responsible for the strategy, day-to-day operations and overall customer success in the United States and Canada.

These three industry executives will be joined onstage by Sapphire Venture’s Shruti Tournatory, who will provide the venture capitalist’s perspective. She joined Sapphire Ventures in 2014 and leads the firm’s CXO platform, a network of Fortune CIOs, CTOs and digital executives. She got her start in the industry as an analyst for IDC, before joining SAP and leading product for its business travel solution.

Grab your early-bird tickets today before we sell out. Early-bird sales end after this Friday, so book yours now and save $100 on tickets before prices increase. If you’re an early-stage enterprise startup you can grab a startup demo table for just $2K here. Each table comes with four tickets and a great location for you to showcase your company to investors and new customers.


By Frederic Lardinois

Save with group discounts and bring your team to TechCrunch’s first-ever Enterprise event Sept. 5 in SF

Get ready to dive into the fiercely competitive waters of enterprise software. Join more than 1,000 attendees for TC Sessions Enterprise 2019 on September 5 to navigate this rapidly evolving category with the industry’s brightest minds, biggest names and exciting startups.

Our $249 early-bird ticket price remains in play, which saves you $100. But one is the loneliest number, so why not take advantage of our group discount, buy in bulk and bring your whole team? Save an extra 20% when you buy four or more tickets at once.

We’ve packed this day-long conference with an outstanding lineup of presentations, interviews, panel discussions, demos, breakout sessions and, of course, networking. Check out the agenda, which includes both industry titans and boundary-pushing startups eager to disrupt the status quo.

We’ll add more surprises along the way, but these sessions provide a taste of what to expect — and why you’ll need your posse to absorb as much intel as possible.

Talking Developer Tools
Scott Farquhar (Atlassian)

With tools like Jira, Bitbucket and Confluence, few companies influence how developers work as much as Atlassian. The company’s co-founder and co-CEO Scott Farquhar will join us to talk about growing his company, how it is bringing its tools to enterprises and what the future of software development in and for the enterprise will look like.

Keeping the Enterprise Secure
Martin Casado (Andreessen Horowitz), Wendy Nather (Duo Security), Emily Heath (United Airlines)

Enterprises face a litany of threats from both inside and outside the firewall. Now more than ever, companies — especially startups — have to put security first. From preventing data from leaking to keeping bad actors out of your network, enterprises have it tough. How can you secure the enterprise without slowing growth? We’ll discuss the role of a modern CSO and how to move fast — without breaking things.

Keeping an Enterprise Behemoth on Course
Bill McDermott (SAP)

With over $166 billion in market cap, Germany-based SAP is one of the most valuable tech companies in the world today. Bill McDermott took the leadership in 2014, becoming the first American to hold this position. Since then, he has quickly grown the company, in part thanks to a number of $1 billion-plus acquisitions. We’ll talk to him about his approach to these acquisitions, his strategy for growing the company in a quickly changing market and the state of enterprise software in general.

The Quantum Enterprise
Jim Clarke (Intel), Jay Gambetta (IBM
and Krysta Svore (Microsoft)
4:20 PM – 4:45 PM

While we’re still a few years away from having quantum computers that will fulfill the full promise of this technology, many companies are already starting to experiment with what’s available today. We’ll talk about what startups and enterprises should know about quantum computing today to prepare for tomorrow.

TC Sessions Enterprise 2019 takes place on September 5. You can’t be everywhere at once, so bring your team, cover more ground and increase your ROI. Get your group discount tickets and save.


By Emma Comeau

Google teams up with VMware to bring more enterprises to its cloud

Google today announced a new partnership with VMware that will make it easier for enterprises to run their VMware workloads on Google Cloud.  Specifically, Google Cloud will now support VMware Cloud Foundation, the company’s system for deploying and running hybrid clouds. The solution was developed by CloudSimple, not VMware or Google, and Google will offer first-line support, working together with CloudSimple.

While Google would surely love for all enterprises to move to containers and utilize its Anthos hybrid cloud service, most large companies currently use VMware. They may want to move those workloads to a public cloud, but they aren’t ready to give up a tool that has long worked for them. With this new capability, Google isn’t offering anything that is especially new or innovative, but that’s not what this is about. Instead, Google is simply giving enterprises fewer reasons to opt for a competitor without even taking its offerings into account.

“Customers have asked us to provide broad support for VMware, and now with Google Cloud VMware Solution by CloudSimple, our customers will be able to run VMware vSphere-based workloads in GCP,” the company notes in the announcement, which we got an early copy of but which for reasons unknown to us will only go live on the company’s blog tomorrow. “This brings customers a wide breadth of choices for how to run their VMware workloads in a hybrid deployment, from modern containerized applications with Anthos to VM-based applications with VMware in GCP.”

The new solution will offer support for the full VMware stack, including the likes of vCenter, vSAN and NSX-T.

“Our partnership with Google Cloud has always been about addressing customers’ needs, and we’re excited to extend the partnership to enable our mutual customers to run VMware workloads on VMware Cloud Foundation in Google Cloud Platform,” said Sanjay Poonen, chief operating officer, customer operations at VMware. “With VMware on Google Cloud Platform, customers will be able to leverage all of the familiarity and investment protection of VMware tools and training as they execute on their cloud strategies, and rapidly bring new services to market and operate them seamlessly and more securely across a hybrid cloud environment.”

While Google’s announcement highlights that the company has a long history of working with VMware, it’s interesting to note that at least the technical aspects of this partnership are more about CloudSimple than VMware. It’s also worth noting that VMware has long had a close relationship with Google’s cloud competitor AWS and Microsoft Azure, too, offers tools for running VMware-based workloads on its cloud.


By Frederic Lardinois