Pivotal broke free of the Dell Technologies conglomerate Friday morning, listing its shares on the New York Stock Exchange at $15 and becoming the latest enterprise tech company to go public in the process.
Trading actually opened at $16.75, but fell back a bit in the early go, ending the day at $15.73. The $15 price values Pivotal at $3.75 billion, according to Marketwatch, boosting the value of shares held by principal shareholder Dell Technologies, as well as Ford and Microsoft.
“Our customers are responding the way i expected,” said CEO Rob Mee in an interview with GeekWire after shares began trading on the New York Stock Exchange. “This is a really strong message of strength and independence, which I think is really big for us.”
Pivotal was created in 2013 as a standalone company with assets from EMC and VMware and an investment from General Electric. It is primarily known for Pivotal Cloud Foundry, platform-as-a-service technology that helps development teams at companies with older or outdated tech infrastructure start using newer software development concepts like agile development and cloud computing.
The company’s independence is not complete; Dell Technologies remains the controlling shareholder in the company, but Mee said chairman and CEO Michael Dell is content to let Pivotal operate as a standalone company. Pivotal’s business model isn’t always aligned with Dell Technologies’ core interests, given that it helps companies reduce their dependence on their own data centers, which Dell EMC would like to stock with servers and storage.
The company is not profitable, but its subscription business has been growing strongly and it finished its 2018 fiscal year with $509 million in revenue. The company had 319 subscription customers at the end of the last fiscal year, and many of those companies are big enterprise shops with a lot of money to spend.
Mee thinks Kubernetes and serverless computing will remain important emerging technologies for its customers in 2018 and beyond. Like Docker Chief Product Officer Scott Johnston, he is also seeing a rise in the number of customers who are running production workloads across multiple public cloud vendors.
“They tend to want to use two out of three,” he said, referring to Amazon Web Services, Microsoft Azure, and Google Cloud Platform.
Dell Technologies has been trying to find ways to reduce the massive debt load needed to finance its 2015 acquisition of EMC’s group of companies, which included Pivotal and VMware. Dell is apparently still considering a reverse merger with VMware to once again become a public company, but the details of that transaction would be complex.
(Editor’s note: This post was updated with comments from CEO Rob Mee, the closing price, and to clarify that proceeds from the IPO are not being transferred to Dell Technologies.)