Tech firms EMC and VMware reveal plans for Pivotal venture

New York, NY, United States (4E) – EMC Corp. and VMware Inc. announced plans to separate a group of business to form a new Internet-focused software firm that could potentially go public, a sign that both companies are gearing for more online information management.

In an investors’ forum of the Pivotal Initiative, both VMware and EMC said the plan is aimed to help companies create ways to utilize information from different sources from social media platforms like Twitter and Facebook posts to information generated by devices like tablets and smartphones.

The new venture, which is comprised of EMC’s Greenplum data analytics application, VMware’s Cloud Foundry software and other products, will have its own equity with the purpose of attracting strategic buyers or announcing an initial public offering, according to EMC Chairman and CEO Joseph Tucci. He, however, added that such plans could take some time to be realized.

EMC owns an 80 per cent stake of VMware, a leading player in the virtualization trend, which allows businesses to create one network from computer systems that are in-house or from hosted data centers and use that computing capacity based on the company’s specific needs.

Pivotal Inc., which employs 1,250 people, will become a separate company by April 1 and is expected to make $300mn in 2013. EMC will own 69 per cent of the company while the remaining equity will be controlled by VMware.

EMC is expected to infuse cash into the group , which needs $400mn of investment, according to company executives.

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