Ford and Microsoft just sunk $253 million into the tech industry's secret weapon


pivotal ceo rob mee


Pivotal CEO Rob Mee

Ford is leading a $253 million investment into Pivotal, a software company spun off from EMC and VMware that helps its customers build better software, faster.


This deal values three-year-old Pivotal at $2.8 billion, Business Insider has learned.

Microsoft is also joining the round as a new investor, joining returning investors VMware, EMC, and GE. GE bought its first 10% stake in Pivotal in 2013 for $105 million.

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Basically, Pivotal sells a set of software tools and consulting services to help even the largest, most old-school companies build and develop software as if they were a tiny startup. Pivotal becomes their secret weapon as they turn to newfangled cloud computing and data-crunching technologies to stay competitive in a digital world.

"Enterprises can get on this journey and compete effectively in this new world," says Pivotal President and COO Bill Cook.


Home Depot, for example, has adopted Pivotal Cloud Foundry as a company-wide standard platform, so all of its many distributed teams are building software using the same tools. Other Pivotal customers include Best Buy, Twitter, and Mercedes-Benz.

It's a big deal for Pivotal, which has seen some exec turnover this past year: Tech industry legend Paul Maritz stepped down as CEO last August, though he's still on board as Executive Chairman. This is Pivotal's first investment deal under new CEO Rob Mee.

To go alongside this announcement, Pivotal shared some revenue numbers: Its flagship Pivotal Cloud Foundry is now on a $200 million annual bookings run rate this year, with its Pivotal Big Data Suite doing $100 million in annual bookings. Overall, the company is reporting a $115 million annual run rate.

What Ford gets

For Ford, making this investment is a big way to further its efforts in connected cars and autonomous vehicles, with a focus on building faster and smarter software, Ford CIO Marcy Klevorn tells Business Insider.

"Our decision is part of our vision as we become both an auto and a mobility company," says Klevorn.


While there are plenty of other companies providing similar software tools, Ford was attracted to Pivotal's philosophy of teaching better software-building methods, alongside its main products. She says that its a "teach a man to fish" approach that helps Ford be more efficient and work together more effectively.

Ford CIO Marcy Klevorn


Ford CIO Marcy Klevorn

Another big part of the Pivotal sales pitch is how it has strong technology partnerships with Amazon Web Services, Microsoft Azure, and Google Cloud Platform - the three biggest cloud computing platforms on the market.

It means that Pivotal customers have a clear and easy way to use any of those cloud providers at will, and even switch between them. Pivotal itself becomes a kind of neutral ground. Klevorn says she welcomes that approach as a kind of future-proofing.

"I think the multi-cloud strategy is a huge thing for us," Klevorn says.

FordPass Find Parking


The Microsoft Azure-powered FordPass app.


This is also where Microsoft comes in. Pivotal and Microsoft go after the same kinds of big-business customers, and the two share 100 joint customers among the Fortune 500, which is more than any other cloud provider in the same space.

Cook calls their partnership "borne out of mere openness," since customers could have chosen any provider they want.

Indeed, Klevorn says that Microsoft and Ford have an "existing relationship," with the Microsoft Azure cloud powering Ford's own FordPass app. It puts Pivotal, Ford, and Microsoft all on the same page.

Pivotal's cash will go back into growing the business, Cook says, which already has 2,000 employees in 17 offices.

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