Pivotal Makes First Big Move, Acquiring Mobile App Dev Firm Xtreme Labs


Pivotal, the EMC-VMware cloud and big data spin-off, has made its first acquisition, snapping up Toronto-based mobile application development startup Xtreme Labs. Terms weren't disclosed, but AllThingsD's sources pegged the all-cash deal at $65 million.

San Francisco-based Pivotal, in a Wednesday press release, said Xtreme Labs brings "deep expertise and knowledge in mobile strategy and development" which complements its own in-house cloud app development talent.

Building mobile apps is a time-consuming process for enterprises, so while $65 million might seem like a steep price for Pivotal to pay, it's actually well within reason, Jamie Shepard, regional vice president at Lumenate, a Dallas-based EMC partner, told CRN.

[Related: NSA Revelations Rattle The Cloud Market: What Are You Doing To Calm Customers' Fears?]

Xtreme Labs' development expertise combined with the Pivotal One enterprise platform-as-a-service will let enterprise customers lessen strain on internal IT and build apps more quickly, Shepard said.

"Pivotal and Xtreme Labs can now address the many firms that have begun -- or have actually delayed -- building mobile apps because it is costly, time consuming and disruptive to corporate business flow," Shepard said in an email.

With Xtreme Labs' staff on board, Pivotal said it'll now have a team of 500 employees "dedicated to agile application development." Pivotal was formed earlier this year with 800 EMC employees from EMC and 600 from VMware.

In a joint blog post, Xtreme Labs founders Amar Varma and Sundeep Madra said they're fully on board with Pivotal's goal of building apps that meld data, analytics and the cloud, describing their company as the "perfect complement to Pivotal."

"When the opportunity to explore a relationship with Pivotal came up, it immediately became clear that we shared a common vision," Varma and Madra said in the blog post.

Founded in 2007, Xtreme Labs' customer list includes Facebook, Twitter, American Express and others. It also has OEM partnerships with Apple and Microsoft and enterprise partnerships with BlackBerry and Google.

Pivotal, led by former VMware CEO Paul Maritz, aims to slow down Amazon Web Services conquest of the cloud infrastructure-as-a-service space, but its goals go far beyond that.

Pivotal is about letting customers build "data-centric applications" with tools that are more open and flexible than what Amazon has to offer, Maritz told CRN in April.

GE, which has a 10 percent stake in Pivotal by virtue of its $105 million investment in the spin-off, inked an R&D agreement with Pivotal in April. Together, Pivotal and GE are working to identify use cases for the powerful next-generation apps that the combination of big data and cloud promises to make possible.

PUBLISHED Oct. 2, 2013