Ford wants to be known for mobility as much as its cars, and it's willing to write software companies outsized checks to prove it.
Ford announced Thursday it had led a $253 million investment in Pivotal Software, joined by
The companies had worked together for several years, most recently on the development of FordPass, a smartphone app the company launched in April and that was deployed on Cloud Foundry, Pivotal's cloud computing platform. "This relationship builds off what was already a strong relationship," Klevorn says. "We are re-positioning the company into a software world."
Microsoft had been involved in that product launch, too, notes Pivotal CEO Rob Mee. Cloud Foundry runs on Microsoft's Azure public cloud platform, and Pivotal and Azure overlap on many customer accounts, according to Mee. "We came together because of that market demand," he says.
Pivotal will pour the money into its research of new products, its CEO says. That means hiring more engineers to build versions of the platform that are friendlier to fast-growing customer segments such as banking, healthcare, and pertinent to Ford, automotive. The company will also continue to expand its Pivotal Labs locations globally, with seventeen offices today and more to come. Ford plans to open its own labs alongside Pivotal in upcoming months, and will be updating FordPass on a regular basis. Klevorn says the two companies are also working on a new launch, though she wouldn't disclose what the product will be.
The investment in Pivotal now puts GE, Microsoft and Ford together in a strategic alliance behind the company's Cloud Foundry product. Pivotal Cloud Foundry is the company's product built off the open-sourced Cloud Foundry platform-as-a-service technology. The software aims to make it easier for companies to build, test, and deploy applications such as the FordPass app. The potential to build apps for more connected devices like appliances, machinery and cars has direct strategic relevance to GE and Ford's ongoing efforts in those areas. Microsoft can then hope that those who use Pivotal will use its own products such as Azure, too.
Pivotal itself was spun out of EMC and VMware in 2013 with an undisclosed amount of capital that the company called its Series A investment. Simultaneously, GE invested $105 million for 10% of Pivotal in what the company considered its Series B. EMC still owns a large percentage of Pivotal through its initial investment, which means that soon
The merger won't change Pivotal's plans for the future, says Mee. "Michael Dell said he wants us to continue on our trajectory," says Mee. "We are combining a cloud platform with modern application development technology, and then bringing that to the rest of the world."
