Pivotal, the company behind the popular Cloud Foundry application development platform, submitted its filing for an initial public offering Friday that will return a fair amount of cash to its majority shareholder, Dell Technologies.
According to the filing, during its last fiscal year Pivotal recorded $509 million in revenue, up from $281 million in its 2016 fiscal year and $416 million in its 2017 fiscal year. Subscription revenue is growing strongly, up to $259 million in the last fiscal year compared to $95 million in subscription revenue two years ago, but services revenue has flattened. Pivotal lost $164 million in its last fiscal year, which is narrower than the $283 million net loss it posted two years ago.
Cloud Foundry is an open-source project that was originally developed inside VMware and used alongside other software products from corporate parent EMC to create a spin-off company called Pivotal in 2013. Pivotal now sells and supports a commercial version called Pivotal Cloud Foundry, while the project is administered by the Cloud Foundry Foundation.
Companies just dipping their toes into the modern era of cloud computing use Pivotal Cloud Foundry to modernize the way they develop applications, moving from monolithic applications running on on-premises servers to applications that use microservices and agile development strategies to run across homegrown servers and cloud services. In the clunky language of enterprise technology, this is a “platform-as-a-service” company, although you could ask ten cloud engineers on the streets of downtown Seattle to define “PaaS” and you’ll probably get ten different answers.
It’s a product that appeals to companies who know it’s probably past the time for an IT philosophy shift that embraces cloud computing and DevOps principles. Pivotal exited its 2018 fiscal year with 319 subscription customers, and it enjoys good relationships with the Fortune 500 thanks to its history within old-guard IT vendors like EMC, VMware, and now Dell Technologies.
Ever since Dell bought EMC in the largest transaction in tech history, it seems like Michael Dell has been looking for a way to reduce the massive debt taken on to finance the transaction. Dell Technologies announced earlier this year that it was “exploring strategic options” for its businesses, and it has been reported that it is considering a reverse merger with VMware, among other things.
Pivotal has raised $1.7 billion in funding from its corporate parents as well as Ford and General Electric, according to Crunchbase.
(Editor’s note: This post was updated to clarify the amount of total revenue earned by Pivotal in its 2018 fiscal year.)