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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 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 2Q 19 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 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.
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AI services startup Hypergiant brings on Bill Nye as an advisor
Hypergiant, a startup launched last year to address the execution gap in bringing applied AI and machine learning technologies to bear for large companies, has signed on a high-profile new advisor to help out with the new ‘Galactic Systems’ division of its services lineup.
Hypergiant founder CEO Ben Lamm also serves as an Advisory Council Member for The Planetary Society, the nonprofit dedicated to space science and exploration advocacy that’s led by Nye who acts as the Society’s CEO. Nye did some voiceover work for the video at the bottom of this post for Hypergiant through the connection, and then decided to come on in a more formal capacity as an official advisor working with the company. He’ll act as a member of Hypergiant’s Advisory Board.
Nye was specifically interested in helping Hypergiant to work on AI tech that touch on a couple of areas he’s most passionate about.
“Hypergiant has an ambitious mission to address some big problems using artificial intelligence systems,” Nye explained via email. “I’m looking forward to working with Hypergiant to develop artificially intelligent systems in two areas I care about a great deal: climate change and space exploration. We need to think big, and I’m very optimistic about what AI can do to make the world quite a bit better.”
Through its work, Hypergiant has an impact on projects in flight from high-profile customers including Apple, GE, Starbucks and the Department of Homeland Security to name just a few. Earlier this year, Austin-based Hypergiant announced it was launching a dedicated space division through the acquisition of Satellite & Extraterrestrial Operations & Procedures (SEOPS), a Texas company that offered deployment services for small satellites.
Hypergiant founder and CEO Ben Lamm along with members of the Hypergiant team at NASA. Credit: Hypergiant.
Nye’s role will focus on this division, advising on space, but also equally on advising clients as to climate change in order to ensure that Hypergiant can “make the most of AI systems to hep provide a high quality of life for people everywhere,” Nye wrote.
“Climate change is the biggest issue we face, and we need to get serious about new ways to fight it,” he explained in an email, noting that the potential impact his work with Hypergiant will have in this area specifically is a key reason he’s excited to undertake the new role.
A Better World from HYPERGIANT on Vimeo.
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As GE and Amazon move on, Google expands presence in Boston and NYC
NYC and Boston were handed huge setbacks this week when Amazon and GE decided to bail on their commitments to build headquarters in the respective cities on the same day. But it’s worth pointing out that while these large tech organizations were pulling out, Google was expanding in both locations.
Yesterday, upon hearing about Amazon’s decision to scrap its HQ2 plans in Long Island City, New York City Mayor de Blasio had this to say: “Instead of working with the community, Amazon threw away that opportunity. We have the best talent in the world and every day we are growing a stronger and fairer economy for everyone. If Amazon can’t recognize what that’s worth, its competitors will.” One of them already has. Google had already announced a billion-dollar expansion in Hudson Square at the end of last year.
In fact, the company is pouring billions into NYC real estate, with plans to double its 7,000-person workforce over the next 10 years. As TechCrunch’s Jon Russell reported, “Our investment in New York is a huge part of our commitment to grow and invest in U.S. facilities, offices and jobs. In fact, we’re growing faster outside the Bay Area than within it, and this year opened new offices and data centers in locations like Detroit, Boulder, Los Angeles, Tennessee and Alabama, wrote Google CFO Ruth Porat.”
Just this week, as GE was making its announcement, Google was announcing a major expansion in Cambridge, the city across the river from Boston that is home to Harvard and MIT. Kendall Square is also home to offices from Facebook, Microsoft, IBM, Akamai, DigitalOcean and a plethora of startups.
Google will be moving into a brand new building that currently is home to the MIT Coop bookstore. It plans to grab 365,000 square feet of the new building when it’s completed, and, as in NYC, will be adding hundreds of new jobs to the 1,500 already in place. Brian Cusack, Google Cambridge Site lead points out the company began operations in Cambridge back in 2003 and has been working on Search, Android, Cloud, YouTube, Google Play, Research, Ads and more.
“This new space will provide room for future growth and further cements our commitment to the Cambridge community. We’re proud to call this city home and will continue to support its vibrant nonprofit and growing business community,” he said in a statement.
As we learned this week, big company commitments can vanish just as quickly as they are announced, but for now at least, it appears that Google is serious about its commitment to New York and Boston and will be expanding office space and employment to the tune of thousands of jobs over the next decade.
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GE’s digital future looking murkier with move to spin off Industrial IoT biz
When I visited the GE Global Research Center in Niskayuna, New York in April 2017, I thought I saw a company that was working hard to avoid disruption, but perhaps the leafy campus, the labs and experimental projects hid much larger problems inside the company. Yesterday GE announced that it is spinning out its Industrial IoT business and selling most of its stake in ServiceMax, the company it bought in 2016 for $915 million.
For one thing, Jeff Immelt, the CEO who was leading that modernization charge, stepped down six months after my visit and was replaced by John Flannery, who was himself replaced just a year into his tenure by C. Lawrence Culp, Jr. It didn’t seem to matter who was in charge, nobody could stop the bleeding stock price, which has fallen this year from a high of $18.76 in January to $7.20 this morning before the markets opened (and had already lost another .15 a share as we went to publication).
It hasn’t been a great year for GE stock. Chart: Yahoo Finance
Immelt at least recognized that the company needed to shift to a data-centered Industrial Internet of Things future where sensors fed data that provided ways to understand the health of a machine or how to drive the most efficient use from it. This was centered around the company’s Predix platform where developers could build applications using that data. The company purchased ServiceMax in 2016 to extend that idea and feed service providers the data they needed to anticipate when service was needed even before the customer was aware of it.
As Immelt put it in a 2014 quote on Twitter:
“If you went to bed last night as an industrial company you’re going to wake up a software & analytics company.” – @JeffImmelt
— General Electric (@generalelectric) October 9, 2014
That entire approach had substance. In fact, if you look at what Salesforce announced earlier this month around service and the Internet of Things, you will see a similar strategy. As Salesforce’s SVP and GM for Salesforce Field Service Lightning Paolo Bergamo described in a blog post, “Drawing on IoT signals surfaced in the Service Cloud console, agents can gauge whether device failure is imminent, quickly determine the source of the problem (often before the customer is even aware a problem exists) and dispatch the right mobile worker with the right skill set.”
Photo: Smith Collection/Gado/Getty Images
The ServiceMax acquisition and the Predix Platform were central to this, and while the idea was sound, Ray Wang, founder and principal analyst at Constellation Research says that the execution was poor and the company needed to change. “The vision for GE Digital made sense as they crafted a digital industrial strategy, yet the execution inside GE was not the best. As GE spins out many of its units, this move is designed to free up the unit to deliver its services beyond GE and into the larger ecosystem,” Wang told TechCrunch.
Current CEO Culp sees the spin-out as a way to breathe new life into the business “As an independently operated company, our digital business will be best positioned to advance our strategy to focus on our core verticals to deliver greater value for our customers and generate new value for shareholders,” Culp explained in a statement.
Maybe so, but it seems it should be at the center of what the company is doing, not a spin-off — and with only a 10 percent stake left in ServiceMax, the service business component all but goes away. Bill Ruh, GE Digital CEO, the man who was charged with implementing the mission (and apparently failed) has decided to leave the company with this announcement. In fact, the new Industrial IoT company will operate as a wholly owned GE subsidiary with its own financials and board of directors, separate from the main company.
With this move though, GE is clearly moving the Industrial IoT out of the core business as it continues to struggle to find a combination that brings its stock price back to life. While the Industrial Internet of Things idea may have been poorly executed, selling and spinning off the pieces that need to be part of the digital future seem like a short-sighted way to achieve the company’s longer term goals.
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Apple and GE announce deep partnership
While Apple has had its share of enterprise partners in recent years including IBM, Cisco and SAP, today’s announcement that it will be working directly with GE feels a bit different with the two companies more closely intertwined than in previous deals. Apple and GE have committed to build a set of development tools and to develop apps together using Apple’s design sensibility… Read More
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Three-year old startup Vera scores huge deal to protect all of GE’s IP
When Box landed GE as a customer in 2014, it marked a turning point for the cloud content management company, giving them momentum ahead of their IPO. Three years later, Vera, a data rights management startup is getting a similar feeling, announcing GE’s 300,000 employees would be using Vera to protect the company’s intellectual property as it moved through the world. “This… Read More
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Tesla and GE are installing solar rooftop systems on 50 Home Depots
Tesla’s energy unit is working with GE’s Current to install solar systems on 50 Home Depot locations in the U.S. The installation is part of a plan on Home Depot’s part to move more of its stores to clean power, with a goal of generating 135 megawatts of clean energy from its locations by 2020, Bloomberg reports. The power generated from the installations will be sold back… Read More
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How augmented reality could save tech from itself
Indeed, as technology marches relentlessly forward, it feels like many of today’s positions could soon be displaced. But just as with past technological inflection points — whether the steam engine, the telegraph, the computer or even industrial robots — technology will always give as much as it takes, as it always has. That matters little to people who have lost their… Read More
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GE Digital snags ServiceMax for $915 million
GE Digital announced today it was buying ServiceMax, a cloud-based field service management company, for $915 million. GE Ventures had been an investor in the company as part of the $82 million Series F round in 2015. The two companies have more in common than you might think. GE is building the Predix Platform, on top of which it hopes companies will build applications that take advantage… Read More
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Pivotal scores $253 million Series C led by Ford on hefty $2.8 billion valuation
Pivotal has a couple of new friends with big wallets. Today it announced that Ford and Microsoft were joining EMC, VMware and GE as investment partners on a massive $253 million Series C investment with a whopping $2.8 billion valuation. It’s not a coincidence that Pivotal has been working closely with Ford over the last year to help it in its own transformation from a car company to… Read More
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