Pivotal expands London office as part of European customer push

The Silicon Valley unicorn that helps enterprises adopt agile software development techniques is expanding in the UK despite Brexit, as it works towards an IPO


Pivotal - a Silicon Valley startup backed by some of the world's biggest tech firms - has opened a new office in London's Old Street as part of a push into the European market.

The platform as a service [PaaS] provider has raised more than $1.7 billion (£1.3bn) in funding so far from high profile investors including EMC, Ford, General Electric (GE), Microsoft, and VMware.

Pivotal executives and MP Matthew Hancock
Pivotal executives and MP Matthew Hancock

Pivotal has had a presence in the UK for a couple of years now but has moved into two floors of the new Warehouse office building in Old Street - also home to large tech companies Stripe and Farfetch - as it looks to expand its EMEA footprint.

The company expects to employ 200 people at its London hub by 2017, comprised mostly of software developers and a small sales team. Asked if Britain's decision to leave the EU caused them any pause CEO Rob Mee said: "I won't say that [Brexit] doesn't provide a few road bumps, but I am still very confident in our ability to expand here and do business." Asked what these road bumps are Mee identified access to talent as a concern.

The UK currently accounts for under ten percent of Pivotal's overall business, but it's ambition is to get that figure up between twenty and thirty percent for EMEA according to Alan Coad, VP EMEA at Pivotal. 

Read next: Big data "start-up" Pivotal to invest £100 million into Tech City 

Mee says that having a physical presence is important as software development is being brought back in-house, following years of overseas outsourcing by major enterprises. 

"I believe there is a bit of a reversal going on now where a lot of that low-cost offshoring is changing direction and coming back to local co-located teams which are much smaller and highly efficient," said Mee. 

He explained the logic: "One thing we have found with distributed teams is that they're actually far more efficient if the people that are in remote locations have been brought together for a period of time and they establish ways of working together, and then go back to being distributed."

There are two main strands to Pivotal's business, Pivotal Labs and Pivotal Cloud Foundry. The Labs strand is essentially a consultancy which assists customers in adopting modern software development techniques in-house. "Pivotal's way of working is to do code development with these companies and transfer that knowledge of how to work that way to our clients in a relatively short period of time by building real software with them in blended teams," said Mee. 

Pivotal also offers a version of open source cloud platform, Cloud Foundry, which allows customers to develop and launch software either from its own data centre or in the public cloud. The company also offers a suite of big data solutions.

Pivotal UK customers

Pivotal tends to attract customers that are "either facing a lot of disruption from software or are seeing very rapid evolution of consumer expectations are the industries coming to us. You see a lot from automotive, insurance, retail and finance," said Mee.

Early European customers include retailer Sainsbury's, automotive company Volkswagen and financial services provider Fidelity International. Mee said: “When Europe’s most storied companies learn to create software like Silicon Valley-based companies, and combine that with their decades of historic data, industry expertise, and financial leverage, they have the unique opportunity to become the new disruptors in their industries."

Tim Lennox, senior manager for digital and technology at Sainsbury’s said: “One of our development teams has been pairing with Pivotal over the past few months as they share our same belief of being ruthlessly customer focused and have key skills in the ability to innovate and deliver with the speed and agility of a start up.”

Emma Hammond, global PaaS product owner at Fidelity International said: “The combination of innovative software, excellent coaching and a dynamic and contemporary working environment in the Pivotal London office provides a winning formula for companies to explore both the technological and cultural opportunities required for transformational change when adopting cloud.”

Pivotal will certainly be targeting the UK's strong financial services sector, which is being heavily disrupted by both fintech companies and changing user expectations around digital products and services.

CEO Rob Mee says that it will consider an initial public offering (IPO) if it can continue to grow: "So we hope to see that continue and then when the market is good we will make the call to go public."

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