VMWare goes on $4.8bn cloud spending spree

VMWare has doubled down on the cloud, writing two cheques totalling $4.8 billion to acquire security firm Carbon Black and software development firm Pivotal.

Founded in 2007, Carbon Black currently offers cloud security solutions to 5,600 customers and 500 partners globally. The cloud-native security platform leverages big data and behavioural analytics to provide endpoint protection against a growing variety and increasing velocity of cyber threats.

“The security industry is broken and ineffective with too many fragmented solutions and no cohesive platform architecture,” said Pat Gelsinger, CEO of VMWare. “By bringing Carbon Black into the VMware family, we are now taking a huge step forward in security and delivering an enterprise-grade platform to administer and protect workloads, applications and networks.”

“We now have the opportunity to seamlessly integrate Carbon Black’s cloud-native endpoint protection platform into all of VMware’s control points,” said Patrick Morley, CEO of Carbon Black. “This type of bold move is exactly what the IT and security industries have been looking to see for a very long time.”

With Carbon Black’s portfolio added to the fray, VMWare has said it can now create a modern security cloud platform for any application, running on any cloud, on any device. The aim is to add more intelligence to security functions, threat detection, as well as accelerating responses to limit the damage which can be inflicted.

This is the challenge which many enterprise organizations are facing around the world; the volume of threats is increasing, but the complexity is becoming an even greater headache. With security team limited, and due to a skills shortage, it looks likely to stay this way, many organizations are turning to artificial intelligence to shore up defences.

For Carbon Black, this could prove to be a very useful move. Although the footprint of the business is already impressive, leaning on the significant presence of the Dell Technologies family, the parent company of VMWare, could certainly open doors to new customers.

After years of neglect, it seems the security segments of the digital economy might finally get the attention deserved.

Heading over to the Pivotal acquisition, VMWare will have to part with $2.7 billion to bring this firm into the family.

“Kubernetes is emerging as the de facto standard for multi-cloud modern apps,” said Gelsinger. “We are excited to combine Pivotal’s development platform, tools and services with VMware’s infrastructure capabilities to deliver a comprehensive Kubernetes portfolio to build, run and manage modern applications.”

Pivotal will add to the ‘Any Cloud, Any App, Any Device’ strategy being set in place by VMWare. Following the acquisition of Heptio last year, VMWare has become one of the top three contributors to Kubernetes, the open-source container-orchestration system for automating application deployment, scaling, and management. With Pivotal in the stable, another leader in the Kubernetes ecosystem, the momentum will only head one direction.

Dell flies through Q3 with 15% revenue growth

Dell Technologies has reported its financials for the third quarter of 2018, with few complaining about15% revenue growth to $22.5 billion.

While the company still has a considerable bill to pay off following the $67 billion acquisition of EMC in 2016, the firm has boasted about paying off approximately $1.3 billion of core debt after three months of positive growth across the group.

“The digital transformation of our world is underway, and we are in the early stages of a massive, technology-led investment cycle,” said Michael Dell, CEO of Dell Technologies. “Dell Technologies was created to meet this opportunity head on for our customers and our investors. You can see the proof in our strong growth, in our powerful innovation and in the depth of our customer relationships.”

With total revenues standing at $22.482 billion, most of the numbers are heading in the right direction. The company is still loss-making, though this has narrowed to $356 million for the last three months and $522 million for 2018 so far, improvements of 13% and 78% respectively compared to the same periods of 2017.

Starting with the Infrastructure Solutions Group, revenue for the third quarter was $8.9 billion, a 19% increase, with the servers and networking delivering its sixth consecutive quarter of double-digit revenue growth. Storage products saw a 6% increase in revenues taking the total up to $3.9 billion.

The Client Solutions Group saw revenues increase by 11% to $10.9 billion, with Dell suggested strong growth in both the commercial and consumer units. Commercial revenue grew 12% to $7.6 billion, and Consumer revenue was up 8% to $3.3 billion, while the firm outperformed the PC industry for total worldwide units.

In the VMWare business unit, revenue for the third quarter was $2.2 billion, up 15%, with operating income of $768 million. This is one area where the Dell management team feel some of the biggest benefits of the EMC acquisition are being felt, with the dreaded ‘synergies’ tag emerging. However, it’s the external AWS partnership which seems to be claiming the majority of the plaudits.

“Overall, I think yesterday’s announcement at re:Invent just reinforced the momentum that we have in the partnership with Amazon,” said Patrick Gelsinger, CEO of VMWare. “And clearly, the VMware Cloud on AWS, we continue to see great customer uptake for that. We reinforce the expansion of that with the Relational Database Service, the RDS announcement that we did at VMworld and yesterday’s Outposts announcement just puts another pillar in that relationship. So now I’d say, we’re on Chapter 3 of the partnership. And overall, we just can see the continued momentum.”

Dell Technologies is not a company which get a huge amount of press inches nowadays, though trends are certainly heading in the right direction here.

Telcos urged to stop moaning and get on with 5G because it’s inevitable

At 5G World in London operators were in agreement that the industry needs to stop having panic attacks about the business case for 5G and just get on with it.

The CTOs of both Swisscom and Three UK both expressed frustration at the apparent tendency of many in the industry to wait for a killer business case before going all-in on 5G. Since 5G is inevitable and the eventual ROI seems beyond dispute, why not just get on with it now. ‘Sh*t or get off the pot,’ they seemed to be saying.

Heinz Herren of Swisscom and Bryn Jones of Three were joined in a panel moderated by Gabriel Brown of Heavy Reading by the brilliantly-named Constantine Polychronopoulos, CTO of the Telco NFV Group at VMware and the latter concurred that 5G is a ‘do or die’ situation. It’s not a matter of if, but when, so get on with it already.

One of the main reasons for hesitation, presumably, is the presumed capex spike that it will entail, but all three of the panel were sceptical about that objection too. Herren doesn’t see the sub-millimetre wave upgrade to 5G requiring significant additional capex and Jones compared network upgrading to painting the Forth Bridge in so much as it’s a constant, rolling, substitutional process so the capex is already baked in.

They did concede some areas are going to cost a bit extra, such as massive MIMO antennas, additional need for fibre and the cost of buying, placing and servicing small cells. Herren and Jones both concurred that having as good and active a relationship as possible with vendor partners is vital. You can read more about the capex discussion at Light Reading here.