I learned new things about Rwanda today

I came across two cool videos on Bloomberg YouTube channel on Rwanda, a country in East Africa. The first video is about how Kigali in Rwanda is nowadays. It’s surprising and cool to learn about a city where there is no plastic bag, coffee is good, cleanliness is prioritized and economy is throwing.

The second video is about how drones produced by Zipline, an American country, are used to aid doctors and patients in Rwanda. As the road infrastructure in the country is in so bad a shape that it’s challenging at times for doctors and hospitals to procure blood. The drones alleviate such a problem. This is one of the best examples of how technology can be used to save lives. The part where the drones are stopped and grounded is awesome. Such precision.

What I learned from Uber S-1

Its filing is packed with a lot of information. Below are my take-aways so far from reading it

It’s doing a lot of things

Apart from the ride-hailing business that it has been known for, Uber also offers Uber Eats, Uber Freights and New Mobility, including e-bikes, e-scooters. Additionally, it has been investing in autonomous driving cars as well.

Personal Mobility

In the quarter ended December 31, 2018, the average wait time for a rider to be picked up by a Driver was five minutes.

The rapid growth and scale of our Ridesharing products, which to date have accounted for virtually all of our Personal Mobility offering, demonstrates the size of our opportunity:

• Revenue derived from our Ridesharing products grew from $3.5 billion in 2016 to $9.2 billion in 2018.

• Gross Bookings derived from our Ridesharing products grew from $18.8 billion in 2016 to $41.5 billion in 2018.

• Consumers traveled approximately 26 billion miles on our platform in 2018.

Uber Eats

Our Uber Eatsoffering allows consumers to search for and discover local restaurants, order a meal at the touch of a button, and have the meal delivered reliably and quickly. We launched our Uber Eats app just over three years ago, and we believe that Uber Eats has grown to be the largest meal delivery platform in the world outside of China based on Gross Bookings. For the quarter ended December 31, 2018, the average delivery time was approximately 30 minutes.

Of the 91 million MAPCs on our platform, over 15 million received a meal using Uber Eats in the quarter ended December 31, 2018, tapping into our network of more than 220,000 restaurants in over 500 cities globally.

Uber Freights

We serve shippers ranging from small- and medium-sized businesses to global enterprises by enabling them to create and tender shipments with a few clicks, secure capacity on demand with upfront pricing, and track those shipments in real-time from pickup to delivery. We believe that all of these factors represent significant efficiency improvements over traditional freight brokerage providers. Since Uber Freight’s public launch in the United States in May 2017, we have contracted with over 36,000 carriers that in aggregate have more than 400,000 drivers and have served over 1,000 shippers, including global enterprises such as Anheuser-Busch InBev, Niagara, Land O’Lakes, and Colgate-Palmolive. Uber Freight has grown to over $125 million in revenue for the quarter ended December 31, 2018

Impressive growth has slowed down

Really impressive growth, but a further look reveals that the growth seems to slow down

Their market map indicates that there is not much room for further horizontal expansion. What Uber can do is to dig deeper in each market to gain more market share. Uber said that as of the quarter ended December 31st, 2018, 74% of their trips and 52% of their Gross Bookings were from outside of the US.

It hasn’t made money operationally yet

Operationally, Uber hasn’t made any money. A positive sign is that their revenue grew faster than their operating loss. In 2018, their operating loss was more or less at the same level as it was in 2016 even though revenue grew significantly in the same period

Regulations, Regulations, Regulations

Throughout the filing, regulatory challenges are repeatedly mentioned and for a good reason. Uber’s struggle with authority bodies around the world has been well documented. Below is what Uber said specifically how regulations restrict their ride-sharing operations in a few countries

We plan to grow our current SAM by expanding further into our six near-term priority countries, Argentina, Germany, Italy, Japan, South Korea, and Spain, where our ability to grow our Ridesharing operations to scale is currently and may continue to be limited by significant regulatory restrictions

In 2018, we derived 24% of our Ridesharing Gross Bookings from five metropolitan areas – Los Angeles, New York City, and the San Francisco Bay Area in the United States; London in the United Kingdom; and São Paulo in Brazil. Over the same period, we generated 15% of our Ridesharing Gross Bookings from trips that either started or were completed at an airport, and we expect this percentage to increase in the future.

If some regulations are imposed in those important markets or around airports, however likely or unlikely, it may meaningfully affect Uber’s revenue.

Another aspect related to laws is how Uber classifies its drivers. Here is what it said specifically on the matter

Our business would be adversely affected if Drivers were classified as employees instead of independent contractors

If politicians in the markets where Uber has operations decide to force the company to treat its drivers as employees and give them minimum wage, it may be an issue

Culture

The first of the norms Uber laid out in “How We Approach The Future” section reads: “We do the right thing. Period”. Not really surprising, but a welcoming sign from a company that endured a public backlash symbolized by the hashtag #DeleteUber not so long ago.

In the filing, Uber promises to “release a transparency report, which will provide the public with data related to reports of sexual assaults and other safety incidents claimed to have occurred on our platform in the United States.” this year. Another welcoming sign.

Furthermore, unlike other tech companies, Uber won’t have dual share structure which is implemented to give the founders, usually, more voting rights. For example, Mark Zuckerberg has more than half of the voting rights at Facebook.

Their stakes in strategic partnerships

In August 2016, we completed the sale of our operations in China to Didi in exchange for an approximate 18.8% interest in Didi, which, based on our current information, we estimate to be 15.4% as of September 30, 2018. In February 2018, we consummated a joint venture with Yandex whereby we and Yandex each contributed our operations in Russia/CIS to a joint venture which we refer to as the Yandex.Taxi joint venture. We received a 38.0% interest in the Yandex.Taxi joint venture at the closing of the transaction, which, based on our currently available information, we estimate to be 38.0% as of December 31, 2018. In March 2018, we completed the sale of our operations in Southeast Asia to Grab in exchange for a 30.0% interest in Grab, which, based on our currently available information, we estimate to be 23.2% as of December 31, 2018. We measure our interest in each of our minority-owned affiliates based on the outstanding shares of capital stock on an as-converted basis but without taking into account securities exercisable or exchangeable for shares of capital stock or its equivalent (including outstanding vested or unvested stock-based awards and any reserved but unissued stock-based awards under any equity incentive plan of our minority-owned affiliates).

Its business deals with Google

According to the filing, Uber paid Google from Jan 1, 2016 through December 31, 2018, $631 million, $70 million and $58 million for Marketing & Advertising (Ads), technology infrastructure & enterprise services (which I believe is Google Cloud Platform), and Google Maps respectively.

Thoughts on Apple Card

On Monday, Apple introduced its in-house credit card called Apple Card. Since it’s not available yet and the details are quite numerous, you can read more in these two articles on TechCrunch and The Verge or watch the presentation yourself here. I’ll just lay out my thoughts on the card below

I am convinced that Apple Card will attract a lot of sign-ups. After all, it’s Apple. The application process is reportedly straightforward and easy (we’ll see soon in the upcoming months). You can apply for the card from your Wallet app and the card will be shipped to you. If you use an iPhone 6 or later and are a fan of Apple, you will likely want to try your hands on the beautiful-looking titanium card for free, as long as you qualify for one. Plus, there are millions of installed iPhone 6 or later out there. So getting folks to sign up won’t be an issue. What about the usage for Apple Card? For consumers to use the Card, Apple has to give them a reason to, an incentive.

Security & Privacy

Security & Privacy is a big sell from Apple and it’s no different in this case. Apple Card comes without the stuff that makes credit card fraud possible from the physical card perspective. Plus, the way Apple sets it up makes credit card fraud significantly more difficult

Because of the way it is set up, every purchase with Apple Card requires biometric identification aside from purchases with the physical card. In the case of a non-Apple Pay transaction online — you must get your card number from the app and that is unlocked via Touch ID or Face ID, so biometrics are still in the path. And, for Apple Pay transactions, they are authenticated at the time of transaction. I personally think it would be cool to optionally require a confirmation from your phone to let a charge go through as well, but that is likely a v2 situation.

From TechCrunch

In other words, somebody needs to steal your card, your phone and either your thumb(s) or your face to make an unauthorized purchase.

Apple claimed that it wouldn’t know anything about consumer purchases using Apple Card. Plus, Goldman Sachs won’t sell data to marketers. If you care about privacy, it is attractive. Now that I work in the credit card industry, I can tell you that the level of privacy intrusion by banks is crazy. It is entirely possible to track the location of a cardholder to a store, know whether a purchase is made and if a purchase is not made, use the user data to run ads offline and online to motivate spending. If Apple and Goldman Sachs can do what they claim, this is an appealing feature, but I doubt it will be the dominant one.

No fees

According to Apple, you won’t be charged with late fees or penalty fees. You will just incur interest on your late payments. A nice feature, but from my perspective, it is not a hugely attractive one, especially if you are like me who isn’t late on credit card payments. After all, late payments will affect your credit score and consequently future APRs.

APRs

Pretty in line with the industry standard. Nothing special about this as far as I am concerned

Visibility into purchase details

Apple claimed that users could see more details on what a purchase was and where it happened from the Wallet app, instead of the user-unfriendly lines you see from your balance statement or mobile app. Once again, a nice feature that won’t be a dominant one.

Cash back

Above is the cash back policy for Apple Card and Apple Pay. 3% on Apple-related purchases is nice, but it is not a daily event, given how expensive Apple items are. 1% cash back with the physical card is nothing special. It’s even less attractive than many credit cards out there on the market. The interesting one is Apple Pay

From Creditcards.com

Because other credit cards offer two percent cash back or more on certain categories only, two percent cash back on every category by Apple Pay is more beneficial to users. According to Apple, Apple Pay will be available in 40+ countries at the end of this year. The number of merchants that accept Apple Pay is impressively high in some countries. Here is what Apple reported on the presentation

There are cases in which Apple Pay will not be competitive. For instance, if you have a card that gives back 4% cash back on dining, it sure is a better alternative than Apple Pay, even if Apple Pay is an available option. Or if you have a co-branded credit card such as a hotel or airline co-branded credit card, there is a switching cost as you want to increase your rewards points.

But using a physical credit card isn’t as convenient as a contactless option such as Apple Pay, nor is it as secure. So which payment option works in a situation depends on what situation that is and what kind of credit card user you are. If you care a lot about rewards and cash back, as well as have the time and mental fortitude to remember all the details, using multiple cards is the way to go. Nonetheless, if you are like me, a “one guy, one card” type, I would prefer something simple and easy to use/remember. Then I can see the appeal of Apple Pay. Contactless, fast, secure and decent cash back.

A push for Apple Pay

I believe that Apple Card is another push for Apple Pay to make it the “iPhone” equivalent of payment methods. Since Apple Pay is not ubiquitously available, the Card offers the connection between Apple Pay and merchants who don’t accept the service yet. If you use the Card, you’ll earn cash back that can be, in turn, used for Apple Pay. As explained above, Apple Pay can seem to be an attractive payment method to a certain type of users. According to Apple, they are on their track to meet the goal of 10 billion transactions on Apple Pay this year. If you are already satisfied with Apple Pay, I suspect that you will get more hooked when Apple Card is launched.

It makes sense to push for Apple Pay as I think Apple will earn more revenue from the service than the Card. After all, whatever revenue from the Card will have to be split with Goldman Sachs as well.

To recap, I think that this is a push for Apple Pay from Apple, an attempt to thread a delicate line between getting into the financial world and not suffering from the regulatory headaches that come with actually getting in there. Personally, I don’t think it is a “winner takes all” situation. I suspect that users will carry multiple options around and that each type of credit card user will display different levels of love towards Apple Pay and Card. I am excited about the future updates from Apple for the Card, regarding features and benefits. After all, this is just their first iteration.

Thoughts on Apple News +

What is Apple News +?

On Monday, Apple announced their “Netflix for news” or “Netflix for magazines” at the moment. They call it Apple News +. With $9.99/month, you have unlimited access to hundreds of magazines and several participating news outlets such as LA Times, Wall Street Journals, The Skimm or TechCrunch. Notable absences from Apple News+ are The Washington Post and NewYork Times

As common practice in the subscription world, the 1st month of Apple News+ is free. Once a user subscribes, the subscription is free for all family members. I never share any Apple services with my family members, so I am interested in how all that sharing with family members works and how they can avoid heavy scammers.

Apple claimed that they used “on-device intelligence” to suggest articles based on readers’ behavior. That way, Apple doesn’t know what users read. Additionally, advertisers won’t know what users read either, or at least that’s what Apple claimed.

From the demo, content on Apple News+ follows a specific format that is easy on the eyes and visually attractive. According to Macstories, out of 251 participating magazines, 125 are using Apple News Format, compared to 126 are still sticking to the old PDF format. Here are a couple of looks

Though the app allows browsing by alphabet and categories, some choices are not easy to find.

In fact, I needed to go to “Following” tab at the bottom, searched for Los Angeles Times to find the outlet. Then, I had to “follow” the LA Times to have it featured on my feed. If you want to look for TechCrunch or The Skimm, the search function in the following is probably the fastest way.

Does it make sense for popular news outlets to work with Apple?

With regard to revenue sharing, Apple reportedly seeks to keep 50% of the revenue from Apple News+ subscriptions while the other half is shared between the partners based on how much time is spent on each partner’s content. Partnering with Apple will potentially give publishers exposure to at least millions of Apple device owners, for now before Apple may decide to make the service available on Android. Publishers hope that their quality content and free marketing boost by being presented at an Apple event will catapult their digital business. On the other hand, there is also a “I already subscribed to Apple News+” risk from existing subscribers. In other words, if a user can access the same content while paying $9.99/month, why would he or she pay $39/month for WSJ, as an example?

Reportedly, even though publishers can’t have customer data, they will know what content is being read and can offer specific deals like newsletter. Plus, adhering to the new format championed by Apple requires an investment of time and effort. WSJ hires 50 more staff just for the partnership with Apple.

For the LA Times, it is understandable why they accepted the risk. The paper has 150,000 digital subscribers as of 15th March 2019. Compared to the 3 million digital-only subscribers and 4 million in total boasted by New York Times, or 1.71 million by the WSJ, the number is meagre. Hence, I can see the upside can justify the cannibalization risk. The same sentiment can be argued for the magazines. I don’t have the numbers for magazines, but I can’t imagine that their digital business is as big as LA Times or WSJ.

As for the WSJ, the math is more interesting. The WSJ has more to lose than the LA Times, but it is reported that users on Apple News + have access to only 3 days worth of archive. As an avid reader of the WSJ myself, it can be a challenge. I usually have to go back to articles even several weeks old for information. I guess that the management at the WSJ is betting that the avid readers will keep subscribing and the new revenue will flow in from extra consumption and new users.

It would be so interesting to see 6 months or a year from now whether partnership with Apple truly brings net benefits to the currently participating publishers. If it does, it will put the publishers that opt out right now, in an awkward position. Continue to stay out and risk losing more digital business or opt in?

What about readers?

I think the obvious winners here are the users. If you are an avid reader of even just a couple of magazines and news outlets, the deal is financially attractive. Some may argue that a normal user would never subscribe to that many publishers. Well, a normal Netflix user would never be able to consume all of their content library either. We are in the world of instant gratification and endless choice. I don’t see the difference here. Plus, you don’t have to worry about your data being collected by publishers as it would when you consume content on the web. Additionally, reading content in the new Apple News Format is a pleasant experience. I have an iPhone 5S and I liked what I saw. I can imagine the experience would be better on a bigger screen like newer iPhones and iPads. Finally, family members can use your subscriptions for free! At least for now!

In short, I find the launch of Apple News exciting. If there is one company that can pull this off, I can’t think of another one, except Apple. It has 900 million installed iPhones and 1.4 billion devices, a dedicated fan base, a household name and control over the iOS. The upcoming months will be interesting as I can’t wait to see the impact the new service has on the partnering publishers and how the result will change the dynamic between Apple and the opted out publishers. How would a competing service on Android look? Hope we can have some more color on the service at the upcoming earning call by Apple.

What I learn from Pinterest IPO Filing

Pinterest, that photo bookmarking tool, filed this Friday to go public. Here is what I learned from reading their S-1:

Their main users are women

Pinterest reaches more than 250 million monthly active users, two thirds of whom are female. In the United States, our total audience includes 43% of internet users, according to an independent study by Comscore based on total unique visitors to our service. This includes eight out of 10 moms, who are often the primary decision-makers when it comes to buying products and services for their household, as well as more than half of all U.S. millennials. We expect to continue to grow our user base over time, especially in international markets

Pinterest S-1
An example of successful marketing with Pinterest

The majority of their Monthly Active Users is outside the US, but most of their revenue comes from the US

Quarterly Revenue (in $ thousands)
Monthly Active Users (in millions)

They did make money on two quarters and their business seems to have some seasonality

Their non-cancelable long-term contractual commitments

In addition, as of December 31, 2018, we had approximately $731.1 million of long-term contractual commitments that are not cancelable. In March 2019 we also entered into a lease for office space to be constructed near our current headquarters campus for which we will be subject to total non-cancelable minimum lease payments of approximately $420.0 million beginning in 2022 if certain contingencies are met.

Some particularly concerning risks

• We may not be able to develop effective products and tools, including measurement tools, for advertisers
• We may not succeed in further expanding and monetizing our platform internationally.
• We have incurred operating losses in the past, anticipate increasing our operating expenses, expect to incur operating losses in the future and may never achieve or maintain profitability.

Reliance on Facebook and Google Single Sign On

A significant number of Pinners use their Facebook or Google login credentials to access their accounts on our service. If security on those platforms is compromised, if Pinners are locked out from their accounts on those platforms or if those platforms experience an outage, Pinners may be unable to access our service. As a result, user growth and engagement on our service could be adversely affected, even if for a temporary period. For example, in the second quarter of 2018, Facebook changed its login authentication systems, which negatively impacted our user growth and engagement in that period. Additionally, if Facebook or Google discontinue single sign-on or experience an outage, then we may lose and be unable to recover users previously using this function, and our user growth or engagement could decline.

Personal Thoughts

Personally, I am not very bullish on Pinterest’s prospect. The good news is that it managed to make more money from its US base more in 2018 than it did in 2017. The bad news is that it has failed to monetize its majority of its MAUs which are outside of the US. To really grow and consistently be profitable in the future, I think Pinterest needs to rectify the situation overseas soon.

It acknowledged the filing that it may not be able to achieve profitability in the future. While it may not be uncommon to have a startup acknowledge that, it is unsettling to have it from an advertising company. Facebook might be in the same boat for a while after its IPO, but back then, Facebook didn’t have the same competition as Pinterest does now. In addition to Facebook and Google, there is a little problem called Amazon, which has grown to be a force to be reckoned with in the advertising world with its superior ability to connect advertising dollars with actual sale.

So far, I haven’t come across any report on privacy violations or scandals related to fake news, propaganda or human rights abuse, the likes of which took place on Twitter and Facebook. It remains to be seen how Pinterest would handle such issues in the future once and if it grows bigger.

Facebook’s privacy-focused vision

Yesterday, Mark Zuckerberg released a blog post on a “privacy-focused vision” that centers on:

Private interactions. People should have simple, intimate places where they have clear control over who can communicate with them and confidence that no one else can access what they share.

Encryption. People’s private communications should be secure. End-to-end encryption prevents anyone — including us — from seeing what people share on our services.

Reducing Permanence. People should be comfortable being themselves, and should not have to worry about what they share coming back to hurt them later. So we won’t keep messages or stories around for longer than necessary to deliver the service or longer than people want them.

Safety. People should expect that we will do everything we can to keep them safe on our services within the limits of what’s possible in an encrypted service.

Interoperability. People should be able to use any of our apps to reach their friends, and they should be able to communicate across networks easily and securely.

Secure data storage. People should expect that we won’t store sensitive data in countries with weak records on human rights like privacy and freedom of expression in order to protect data from being improperly accessed.

Be that as it may that this vision can bring business and strategic benefits, meaning that Facebook has a reason to follow suit. Nonetheless, I have nothing, but skepticisms about this vision.

First of all, the majority of Facebook’s revenue comes from ads. By majority, I meant 98.5% of their revenue in 2018 comes from ads

Source: Facebook

When something is 98.5% of you, any claim that you will do something threatening that 98.5% part tends to raise genuine concerns about its legitimacy.

Second of all, Facebook’s track record on keeping its promise isn’t that great. For the last two years, it will be a hard ask to find a tech company that is involved in more scandals than the blue brand. I came across this disturbing article from Buzzfeed on Facebook. Here is what it has on decision-making at Facebook

Zuckerberg and Chief Operating Officer Sheryl Sandberg do not make judgment calls “until pressure is applied,” said another former employee, who worked with Facebook’s leadership and declined to be named for fear of retribution. “That pressure could come from the press or regulators, but they’re not keen on decision-making until they’re forced to do so.”

Buzzfeed

On Facebook’s attention to privacy

One former employee noted that Facebook’s executives historically only took privacy seriously if problems affected the key metrics of daily active users, which totaled 1.52 billion accounts in December, or monthly active users, which totaled 2.32 billion accounts. Both figures increased by about 9% year-over-year in December.

“If it came down to user privacy or MAU growth, Facebook always chose the latter,” the person said. 

Buzzfeed

On their denial to admit problems:

Other sources told BuzzFeed News that Facebook executives continue to view the problems of 2018 fundamentally as communication issues. They said some insiders among leadership and the rank and file could not understand how Facebook had become the focus of so much public ire and floated the idea that news publications, who had seen their business models decimated by Facebook and Google, had been directed to cover the company in a harsher light.

Buzzfeed

On a new feature called Clear History:

“If you watch the presentation, we really had nothing to show anyone,” said one person, who was close to F8. “Mark just wanted to score some points.”

Still, nine months after its initial announcement, Clear History is nowhere to be found. A Facebook executive conceded in a December interview with Recode that “it’s taking longer than we initially thought” due to issues with how data is stored and processed. 

Buzzfeed

By now, you should see why I am skeptical of Facebook’s new vision. We all have to take a side and so does Facebook. It just happens that taking advertisers side means Facebook is not on ours as users.

Thoughts on Dell’s position in Enterprise IT world

I like to learn about business strategies, particularly in the technology world. This post is just to put into words my understanding of Dell’s position in the Enterprise IT sphere. While I spent a lot of my free time on reading to navigate through as much as possible the abstraction and complexity of the IT world, I can’t understand the products/services as well as I do with, let’s say, a streaming service like Netflix. With luck, I may get some constructive feedback on what I might be incorrect about or what I have here is useful to someone out there.

IT is no longer a cost center to companies. It is where companies gain competitive advantages as the world goes digital. There are several notable trends:

  • While public clouds such as Azure or AWS offer flexibility, geographical reach, functionalities, quick time-to-market and cost-effectiveness, private clouds provide more control and better security. Companies need both. Hence, hybrid cloud is where enterprises are headed. Multi-cloud is a flavor of hybrid cloud in that a firm may use different public clouds. Whether hybrid or multi-cloud model works for one firm depends on the business requirements and resources available to that firm
  • As enterprises have IT footprint on both the cloud and on-prem, it becomes a challenge to manage the whole network. It’s critical to know which data travels to where and whether data is safe. The challenge compounds when the need for productivity forces companies to use 3rd party cloud applications such as ServiceNow, Box and Google Drive, just to name a few. As a result, the management a, automation and security of, as well as visibility into the network are instrumental to a successful hybrid/multi cloud.
  • A lot of companies have operations in different locations. Banks have branches. Retailers have stores. These branches are important touch points through which customers expect to have great experience and services. And these branches need to talk to data centers or cloud application providers. The network that links branches, data centers and the cloud must be secure, efficient, manageable and cost-effective.
  • Brands must release applications fast and often to continuously bring values to customers. From a user perspective, that’s why we often have to update our mobile applications, but there is a lot more that goes behind the scenes for brands to bring new updates to life. In order to have fast and continuous software releases, companies need to set up the necessary infrastructure that allows developers to do their job quickly and efficiently. Hence, software-defined data center (SDDC) and Kubernetes have become increasingly popular. With SDDC, data centers can be set up and later scale quickly as new technological advances increasingly relieve engineers of time-consuming manual workload. With regard to software development, micro-services is the de facto approach in which Kubernetes is a major component. Developers either want to build new software from scratch using Kubernetes or re-package existing applications on a Kubernetes-based platform
Google Trends Graph on Kubernetes

Dell itself

In short, Dell offers services and products that help companies build and scale data centers such as backup, disaster recover, file systems, storage, SDDC solutions such as VxRack. As the majority shareholder of VMWare, Dell integrates a lot of VMWare products in some of its own. The integration is critical to seamless connection between on-prem infrastructure and data on public clouds. For instance, if a firm builds its data center on VxRack, Dell’s SDDC turnkey product, and deploys some workloads on AWS using VMWare on AWS, the data and applications on-prem and on AWS can be set up quickly to talk to each other. Plus, the firm can manage all workloads using the same VMWare interface.

VMWare

Essentially, VMWare has built itself to be the one ingredient that companies wishing to adopt hybrid cloud need. It has built partnerships with AWS, GCP and IBM as collaboration with Azure is reportedly in the work. On top of that, through its offerings such as vSAN (storage), vSphere (compute), NSX (network), VeloCloud (SD-WAN) and a host of services designed for analytics, management and security such as Workspace One, Wavefront, AppDefense or vRealize, it is the glue that connects 3rd party applications, public clouds, private clouds (data centers) and branches.

Through its acquisition of EMC, Dell is the majority shareholder of VMWare.

Pivotal

Pivotal is Dell’s answer to the world’s current obsession with micro-services and Kubernetes. Pivotal offers services that help companies build applications better, faster and more efficiently. Developers want automation to relieve them of infrastructure-managing tasks so that they can focus on developing code, but they don’t want to lose too much freedom in development. Through its portfolio, Pivotal strives to meet those needs. Heptio is their latest acquisition and provides managed Kubernetes services. With Heptio, developers are not subject to the limitations imposed by PAS, but at the exchange of limited automation. With PAS, there is a lot of automation, but developers may not appreciate the rules that come with a higher level of automation. PKS is supposed to bring a balanced mix and the best of both worlds. I wrote a bit about PaaS vs CaaS here

As in the case of VMWare, Dell owns Pivotal by virtue of its EMC acquisition.

Security

Dell has its own security subsidiary in SecureWorks, a $1.8 billion company as of this writing. In addition, VMWare has its own security solutions that are designed to improve security as NSX with micro-segmentation or AppDefense.

Conclusion

The more I read about Dell and its subsidiaries, the more I am impressed by its strategy and growth through innovation and M&A (EMC, VeloCloud, NSX…). Based on my understanding of where Dell stands in the Enterprise IT world, it seems to have the necessary pieces to take advantage of the IT trends mentioned above.