Software company VMware promised annual revenue growth of up to 20% by 2016 and, with parent company EMC, announced a new venture with a $1bn (€768m) revenue target, sending shares of both companies higher.
Pivotal will include VMware’s Cloud Foundry application service, as well as EMC’s Greenplum data analytics software and other products. EMC, the world’s biggest maker of data storage equipment, owns 80% of VMware.
Both firms are hoping Pivotal will cash in on an expected jump in demand for data analytics software as firms like telecom service providers want better tools to analyse masses of data from multiple technology platforms.
The venture, which will be majority-owned by EMC and eventually plans to go public, is expected to generate $1bn (€771,408) in revenue by 2017 and will equire investments of $400m this year and next year.
VMware said the creation of Pivotal would raise its 2013 operating margins.
Growth in VMware’s remaining businesses will increase to a range of 15 to 20% in 2014 to 2016 from its expected growth rate of 11.2% to 13.8% in 2013, according to the company.
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