IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

Why VMware is acquiring Pivotal and Carbon Black

A surprise announcement on Thursday evening sees the company boost its security and container credentials

VMware has surprised industry watchers by announcing it intends not only to buy Dell Technologies stablemate Pivotal, but also cyber security firm Carbon Black.

The virtualisation giant's plans to absorb Pivotal were no secret while the definitive agreement wasn't announced until yesterday evening, the company had already let its intentions be known a week before. The news about Carbon Black, however, was rather more unforeseen.

In the company's Q2 2020 earnings call, held on Thursday, CEO Pat Gelsinger spoke of three strengthening "secular trends" that drove the decision to make these acquisitions.

"First multicloud is the new model for enterprise IT," said Gelsinger, according to a transcript from Seeking Alpha, "second, digital transformation is driving accelerated pace of cloud native app development. Last, but not least, as businesses move applications to the cloud and access it over distributed networks and from a diversity of endpoints, security has become a significant challenge and priority.

"To address these trends, we are thrilled to announce our intent to acquire Pivotal and Carbon Black. It's an exciting day for VMware as these acquisitions address critical priorities of CIOs and will meaningfully expand our ability to power our customers' digital transformation."

In many ways the less-expected Carbon Black deal is the most straightforward: VMware is one of the biggest cloud players, security is one of the biggest threats to all organisations and for $2.1 billion cash, the company gets all the customers, assets and talent of one of the few security firms that specialises in cloud-native endpoint security. Yes, VMware had (indeed, has) some of its own offerings, but Carbon Black's use of AI and big data is significantly more advanced, so it's easy to see why the decision to acquire was made.

The Pivotal acquisition, on the other hand, is somewhat more complex. In some ways, the acquisition is a homecoming given Pivotal was spun out of VMware and its then majority shareholder, EMC, in 2012. As EMC had retained a controlling share in Pivotal, when it was acquired by Dell some four years later, Pivotal became one of the seven arms that make up the company now known as Dell Technologies with VMware making up a second.

At this point, it's hard to know whether this is more to do with internal structure at Dell Technologies, industry machinations, or general technology, as there are good arguments for all three.

From the point of view of the customer, channel partners and the company itself, it does make sense to bring the two very cloud-focused branches of Dell Technologies together into a single unit. If organisations increasingly want to buy, sell and deliver cloud virtualisation and development offerings bundled together, why not have a single point of origin?

The deal also means the parent company has increased its stake in VMware to 81.09%, however although Gelsinger has dismissed the idea that this is part of any plan to fully subsume the veteran virtualisation player, telling CNBC: "Dell is extraordinarily supportive of an independent VMware."

Expect to hear more about both acquisitions, maybe even with some CEO cameos, at VMworld 2019 next week.

Featured Resources

Accelerating AI modernisation with data infrastructure

Generate business value from your AI initiatives

Free Download

Recommendations for managing AI risks

Integrate your external AI tool findings into your broader security programs

Free Download

Modernise your legacy databases in the cloud

An introduction to cloud databases

Free Download

Powering through to innovation

IT agility drive digital transformation

Free Download

Recommended

Broadcom formally confirms $61 billion acquisition of VMware
mergers and acquisitions

Broadcom formally confirms $61 billion acquisition of VMware

26 May 2022
Linux-based Cheerscrypt ransomware found targeting VMware ESXi servers
ransomware

Linux-based Cheerscrypt ransomware found targeting VMware ESXi servers

26 May 2022
Broadcom reportedly looking at acquiring cloud company VMware
mergers and acquisitions

Broadcom reportedly looking at acquiring cloud company VMware

23 May 2022
US security agency issues emergency alert over vulnerable VMware products
Security

US security agency issues emergency alert over vulnerable VMware products

19 May 2022

Most Popular

Salaries for the least popular programming languages surge as much as 44%
Development

Salaries for the least popular programming languages surge as much as 44%

23 Jun 2022
The UK's best cities for tech workers in 2022
Business strategy

The UK's best cities for tech workers in 2022

24 Jun 2022
LockBit 2.0 ransomware disguised as PDFs distributed in email attacks
Security

LockBit 2.0 ransomware disguised as PDFs distributed in email attacks

27 Jun 2022