Pivotal, part of the Dell empire, is making a big bet on the Google-created Kubernetes cloud software as it rights the course after a 'train wreck quarter'
- On Tuesday, Pivotal announced an alpha version of Pivotal Application Service for Kubernetes, which allows developers to ship, secure, and run code on the popular open source cloud project started by Google engineers.
- Pivotal CEO Rob Mee says he hopes this product will get customers excited and open up sales opportunities, while also plugging what it saw as some gaps in the Kubernetes world.
- Besides that, Pivotal is inspecting its sales process and hired Chad Sakac as the new sales leader for North America.
- Last quarter, after it announced lower guidance than Wall Street expected, Pivotal's stock tanked over 40%. Wall Street analysts say these changes make them more confident about Pivotal, although they say will take time for it to recover.
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In June, Pivotal's stock tanked over 40% after what a Wall Street analyst called a "train wreck quarter" - but the developer software company, which is majority-owned by Dell, has plans to turn things around.
Pivotal CEO and co-founder Rob Mee tells Business Insider that Pivotal is focusing on improving execution, especially in sales. It's hiring Chad Sakac as the new sales leader for North America, and on Tuesday, it announced new products that it hopes will get customers excited.
Pivotal is known for its Pivotal Application Service, an application that allows developers to ship, secure, and run their code - helping programmers be more productive.
On Tuesday, Pivotal introduced an alpha version of PAS that's designed to run on Kubernetes, an open source cloud project that was originally started by Google engineers to manage the company's search infrastructure.
Since it became available as open source five years ago, Kubernetes has quickly become widespread as it allows users to run applications at a massive scale. Now developers can use PAS to manage their Kubernetes applications.
"Kubernetes as a technology is becoming quite popular," Mee told Business Insider. "Many companies are wanting to adopt it. They're finding it to be really complex. They're also finding that they're missing many of the developer friendly technologies that are available in our platform. We're bringing these technologies to the Kubernetes world."
Pivotal also announced new products based on PAS features that will help developers when they use Kubernetes.
"This road map that we've got now and the release of these products we're talking about is super exciting to our customers and will generate excitement for Pivotal," Mee said.
More 'predictability'
Mee intends that for the coming quarters, the company will have more 'predictability,' and it's currently inspecting its sales process to figure out how to make it happen. Last quarter, he said, the company was not able to close out some of the deals it expected in time. Many of these deals ended up closing this quarter instead.
He also says Sakac, the new North American sales leader, has extensive experience with enterprise technology, which will help.
"Having predictability is really good," Mee said. "That depends on sales execution. From Q1, that's really what we're working on. We're focusing on all stages of the sales process but bringing a lot of inspection, a lot of rigor to each stage of that as well as making sure we have a lot of prospects and make sure they know with accuracy on what stage they'll close."
These changes in the sales process may take a couple of quarters to play out, Mee says. However, launching a new Kubernetes product will open up opportunities for the company, he believes.
"What's really good with the new product is it allows our salesforce to bring the same outcomes to customers with the addition of Kubernetes which is hot," Mee said. "It opens up more conversation and allows us to talk to more customers and talk to existing customers."
Bhavan Suri and David Griffin of William Blair, who called last quarter for Pivotal a "disappointing start to the year," wrote in a note that the launch of PAS on Kubernetes made them more confident, and they were pleased with the organizational changes at the company to address sales issues.
"That said, we believe these changes will likely take at least a few quarters to work through," Suri and Griffin wrote. "Although this implies potential for muted and choppier results in the near term, we believe the long-term fundamentals of the business remain attractive and see limited downside at current levels."