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VMware (VMW) Completes the Acquisition of Pivotal Software

VMware VMW recently completed its acquisition of Pivotal Software for $2.7 billion, originally announced in August 2019.

Pivotal’s operations have been combined with VMware’s Cloud Native Applications team under the newly formed Modern Applications Platform business unit.

VMWare’s Kubernetes Efforts

Pivotal brings to the table its Pivotal Application Service (PAS), a platform-as-a-service toolkit based on Cloud Foundry that’s widely used in enterprise applications.

In July 2019, Pivotal released a version of PAS that runs on Kubernetes, enabling the Cloud Foundry-based platform to add more functionality for developers who want to containerize their software apps.

VMware is integrating Pivotal’s container focus into its flagship vSphere virtualization platform toward a broader push around containers, Kubernetes, and cloud native. This includes Pivotal’s Container Service (PKS), which is its hosted Kubernetes offering.

Moreover, VMware is using Bitami, which was acquired in May 2019 to provide a catalog of pre-built Kubernetes clusters.

Along with the previous deal to buy Kubernetes startup Heptio for $550 million, VMware will strengthen its new Kubernetes portfolio called Tanzu, which was announced at VMworld in August 2019.

Tanzu aims to bring Kubernetes containers and VMware's virtual machines together on a single management platform. Additionally, it includes a technology preview of Project Pacific, which is focused on transforming VMware vSphere into a Kubernetes native platform in a future release.

Further, VMware also launched Tanzu Mission Control, which is a single point of control that allows customers to manage all their Kubernetes clusters regardless of where they run.

Other Players Offering Kubernetes

Kubernetes platform has gained solid momentum among major cloud computing service providers including Amazon’s AMZN Amazon Web Service (“AWS”), Microsoft’s MSFT Azure and International Business Machines IBM cloud.

AWS offers Amazon Elastic Kubernetes Service (Amazon EKS), which is a fully managed one. Further, the service runs upstream Kubernetes and is a certified Kubernetes conformant.

Meanwhile, Microsoft’s Azure Kubernetes Service (AKS) provides serverless Kubernetes, which offers enterprise-grade security and governance, and continuous integration and delivery features.

Moreover, IBM Cloud’s fully managed Kubernetes Service allows continuous availability across multi-zone clusters.

Nevertheless, VMware’s bid to expand its enterprise-grade Kubernetes-based offerings for modern applications bodes well as Kubernetes is well poised to gain mainstream adoption in 2020 on breakthrough product roll-outs and noteworthy acquisitions.

Zacks Rank

Currently, VMware carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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