Jul
18
2019
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Investor Jocelyn Goldfein to join us on AI panel at TechCrunch Sessions: Enterprise

Artificial intelligence is quickly becoming a foundational technology for enterprise software development and startups have begun addressing a variety of issues around using AI to make software and processes much more efficient.

To that end, we are delighted to announce that Jocelyn Goldfein, a Managing Director at Zetta Venture Partners will be joining on us a panel to discuss AI in the enterprise. It will take place at the TechCrunch Sessions: Enterprise show on September 5 at the Yerba Buena Center in San Francisco.

It’s not just startups that are involved in AI in the enterprise. Some of the biggest names in enterprise software including Salesforce Einstein, Adobe Sensei and IBM Watson have been addressing the need for AI to help solve the enterprise data glut.

Computers can process large amounts of information much more quickly than humans, and as enterprise companies generate increasing amounts of data, they need help understanding it all as the volume of information exceeds human capacity to sort through it.

Goldfein brings a deep engineering background to her investment work. She served as a VP of engineering at VMware and as an engineering director at Facebook, where she led the project that adopted machine learning for the News Feed ranker, launched major updates in photos and search, and helped spearhead Facebook’s pivot to mobile. Goldfein drove significant reforms in Facebook hiring practices and is a prominent evangelist for women in computer science. As an investor, she primarily is focused on startups using AI to take more efficient approaches to infrastructure, security, supply chains and worker productivity.

At TC Sessions: Enterprise, she’ll be joining Bindu Reddy from Reality Engines along with other panelists to discuss the growing role of AI in enterprise software with TechCrunch editors. You’ll learn why AI startups are attracting investor attention and how AI in general could fundamentally transform enterprise software.

Prior to joining Zetta, Goldfein had stints at Facebook and VMware, as well as startups Datify, MessageOne and Trilogy/pcOrder.

Early Bird tickets to see Joyce at TC Sessions: Enterprise are on sale for just $249 when you book here; but hurry, prices go up by $100 soon! Students, grab your discounted tickets for just $75 here.

Jul
11
2019
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OneTrust raises $200M at a $1.3B valuation to help organizations navigate online privacy rules

GDPR, and the newer California Consumer Privacy Act, have given a legal bite to ongoing developments in online privacy and data protection: it’s always good practice for companies with an online presence to take measures to safeguard people’s data, but now failing to do so can land them in some serious hot water.

Now — to underscore the urgency and demand in the market — one of the bigger companies helping organizations navigate those rules is announcing a huge round of funding. OneTrust, which builds tools to help companies navigate data protection and privacy policies both internally and with its customers, has raised $200 million in a Series A led by Insight that values the company at $1.3 billion.

It’s an outsized round for a Series A, being made at an equally outsized valuation — especially considering that the company is only three years old — but that’s because of the wide-ranging nature of the issue, according to CEO Kabir Barday, and OneTrust’s early moves and subsequent pole position in tackling it.

“We’re talking about an operational overhaul in a company’s practices,” Barday said in an interview. “That requires the right technology and reach to be able to deliver that at a low cost.” Notably, he said that OneTrust wasn’t actually in search of funding — it’s already generating revenue and could have grown off its own balance sheet — although he noted that having the capitalization and backing sends a signal to the market and in particular to larger organizations of its stability and staying power.

Currently, OneTrust has around 3,000 customers across 100 countries (and 1,000 employees), and the plan will be to continue to expand its reach geographically and to more businesses. Funding will also go toward the company’s technology: it already has 50 patents filed and another 50 applications in progress, securing its own IP in the area of privacy protection.

OneTrust offers technology and services covering three different aspects of data protection and privacy management.

Its Privacy Management Software helps an organization manage how it collects data, and it generates compliance reports in line with how a site is working relative to different jurisdictions. Then there is the famous (or infamous) service that lets internet users set their preferences for how they want their data to be handled on different sites. The third is a larger database and risk management platform that assesses how various third-party services (for example advertising providers) work on a site and where they might pose data protection risks.

These are all provided either as a cloud-based software as a service, or an on-premises solution, depending on the customer in question.

The startup also has an interesting backstory that sheds some light on how it was founded and how it identified the gap in the market relatively early.

Alan Dabbiere, who is the co-chairman of OneTrust, had been the chairman of Airwatch — the mobile device management company acquired by VMware in 2014 (Airwatch’s CEO and founder, John Marshall, is OneTrust’s other co-chairman). In an interview, he told me that it was when they were at Airwatch — where Barday had worked across consulting, integration, engineering and product management — that they began to see just how a smartphone “could be a quagmire of privacy issues.”

“We could capture apps that an employee was using so that we could show them to IT to mitigate security risks,” he said, “but that actually presented a big privacy issue. If [the employee] has dyslexia [and uses a special app for it] or if the employee used a dating app, you’ve now shown things to IT that you shouldn’t have.”

He admitted that in the first version of the software, “we weren’t even thinking about whether that was inappropriate, but then we quickly realised that we needed to be thinking about privacy.”

Dabbiere said that it was Barday who first brought that sensibility to light, and “that is something that we have evolved from.” After that, and after the VMware sale, it seemed a no-brainer that he and Marshall would come on to help the new startup grow.

Airwatch made a relatively quick exit, I pointed out. His response: the plan is to stay the course at OneTrust, with a lot more room for expansion in this market. He describes the issues of data protection and privacy as “death by 1,000 cuts.” I guess when you think about it from an enterprising point of view, that essentially presents 1,000 business opportunities.

Indeed, there is obvious growth potential to expand not just its funnel of customers, but to add more services, such as proactive detection of malware that might leak customers’ data (which calls to mind the recently fined breach at British Airways), as well as tools to help stop that once identified.

While there are a million other companies also looking to fix those problems today, what’s interesting is the point from which OneTrust is starting: by providing tools to organizations simply to help them operate in the current regulatory climate as good citizens of the online world.

This is what caught Insight’s eye with this investment.

“OneTrust has truly established themselves as leaders in this space in a very short time frame, and are quickly becoming for privacy professionals what Salesforce became for salespeople,” said Richard Wells of Insight. “They offer such a vast range of modules and tools to help customers keep their businesses compliant with varying regulatory laws, and the tailwinds around GDPR and the upcoming CCPA make this an opportune time for growth. Their leadership team is unparalleled in their ambition and has proven their ability to convert those ambitions into reality.”

Wells added that while this is a big round for a Series A it’s because it is something of an outlier — not a mark of how Series A rounds will go soon.

“Investors will always be interested in and keen to partner with companies that are providing real solutions, are already established and are led by a strong group of entrepreneurs,” he said in an interview. “This is a company that has the expertise to help solve for what could be one of the greatest challenges of the next decade. That’s the company investors want to partner with and grow, regardless of fund timing.”

Jul
01
2019
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We’ll talk even more Kubernetes at TC Sessions: Enterprise with Microsoft’s Brendan Burns and Google’s Tim Hockin

You can’t go to an enterprise conference these days without talking containers — and specifically the Kubernetes container management system. It’s no surprise then, that we’ll do the same at our inaugural TC Sessions: Enterprise event on September 5 in San Francisco. As we already announced last week, Kubernetes co-founder Craig McLuckie and Aparna Sinha, Google’s director of product management for Kubernetes, will join us to talk about the past, present and future of containers in the enterprise.

In addition, we can now announce that two other Kubernetes co-founders will join us: Google principal software engineer Tim Hockin, who currently works on Kubernetes and the Google Container Engine, and Microsoft distinguished engineer Brendan Burns, who was the lead engineer for Kubernetes during his time at Google.

With this, we’ll have three of the four Kubernetes co-founders onstage to talk about the five-year-old project.

Before joining the Kuberntes efforts, Hockin worked on internal Google projects like Borg and Omega, as well as the Linux kernel. On the Kubernetes project, he worked on core features and early design decisions involving networking, storage, node, multi-cluster, resource isolation and cluster sharing.

While his colleagues Craig McLuckie and Joe Beda decided to parlay their work on Kubernetes into a startup, Heptio, which they then successfully sold to VMware for about $550 million, Burns took a different route and joined the Microsoft Azure team three years ago.

I can’t think of a better group of experts to talk about the role that Kubernetes is playing in reshaping how enterprise build software.

If you want a bit of a preview, here is my conversation with McLuckie, Hockin and Microsoft’s Gabe Monroy about the history of the Kubernetes project.

Early-Bird tickets are now on sale for $249; students can grab a ticket for just $75. Book your tickets here before prices go up.

Jun
13
2019
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VMware announces intent to buy Avi Networks, startup that raised $115M

VMware has been trying to reinvent itself from a company that helps you build and manage virtual machines in your data center to one that helps you manage your virtual machines wherever they live, whether that’s on prem or the public cloud. Today, the company announced it was buying Avi Networks, a 6-year old startup that helps companies balance application delivery in the cloud or on prem in an acquisition that sounds like a pretty good match. The companies did not reveal the purchase price.

Avi claims to be the modern alternative to load balancing appliances designed for another age when applications didn’t change much and lived on prem in the company data center. As companies move more workloads to public clouds like AWS, Azure and Google Cloud Platform, Avi is providing a more modern load balancing tool, that not only balances software resource requirements based on location or need, but also tracks the data behind these requirements.

Diagram: Avi Networks

VMware has been trying to find ways to help companies manage their infrastructure, whether it is in the cloud or on prem, in a consistent way, and Avi is another step in helping them do that on the monitoring and load balancing side of things, at least.

Tom Gillis, senior vice president and general manager for the networking and security business unit at VMware sees this acquisition as fitting nicely into that vision. “This acquisition will further advance our Virtual Cloud Network vision, where a software-defined distributed network architecture spans all infrastructure and ties all pieces together with the automation and programmability found in the public cloud. Combining Avi Networks with VMware NSX will further enable organizations to respond to new opportunities and threats, create new business models, and deliver services to all applications and data, wherever they are located,” Gillis explained in a statement.

In a blog post,  Avi’s co-founders expressed a similar sentiment, seeing a company where it would fit well moving forward. “The decision to join forces with VMware represents a perfect alignment of vision, products, technology, go-to-market, and culture. We will continue to deliver on our mission to help our customers modernize application services by accelerating multi-cloud deployments with automation and self-service,” they wrote. Whether that’s the case, time will tell.

Among Avi’s customers, which will now become part of VMware are Deutsche Bank, Telegraph Media Group, Hulu and Cisco. The company was founded in 2012 and raised $115 million, according to Crunchbase data. Investors included Greylock, Lightspeed Venture Partners and Menlo Ventures, among others.

Jun
04
2019
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How Kubernetes came to rule the world

Open source has become the de facto standard for building the software that underpins the complex infrastructure that runs everything from your favorite mobile apps to your company’s barely usable expense tool. Over the course of the last few years, a lot of new software is being deployed on top of Kubernetes, the tool for managing large server clusters running containers that Google open sourced five years ago.

Today, Kubernetes is the fastest growing open-source project and earlier this month, the bi-annual KubeCon+CloudNativeCon conference attracted almost 8,000 developers to sunny Barcelona, Spain, making the event the largest open-source conference in Europe yet.

To talk about how Kubernetes came to be, I sat down with Craig McLuckie, one of the co-founders of Kubernetes at Google (who then went on to his own startup, Heptio, which he sold to VMware); Tim Hockin, another Googler who was an early member on the project and was also on Google’s Borg team; and Gabe Monroy, who co-founded Deis, one of the first successful Kubernetes startups, and then sold it to Microsoft, where he is now the lead PM for Azure Container Compute (and often the public face of Microsoft’s efforts in this area).

Google’s cloud and the rise of containers

To set the stage a bit, it’s worth remembering where Google Cloud and container management were five years ago.

May
21
2019
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Microsoft makes a push for service mesh interoperability

Services meshes. They are the hot new thing in the cloud native computing world. At KubeCon, the bi-annual festival of all things cloud native, Microsoft today announced that it is teaming up with a number of companies in this space to create a generic service mesh interface. This will make it easier for developers to adopt the concept without locking them into a specific technology.

In a world where the number of network endpoints continues to increase as developers launch new micro-services, containers and other systems at a rapid clip, they are making the network smarter again by handling encryption, traffic management and other functions so that the actual applications don’t have to worry about that. With a number of competing service mesh technologies, though, including the likes of Istio and Linkerd, developers currently have to choose which one of these to support.

“I’m really thrilled to see that we were able to pull together a pretty broad consortium of folks from across the industry to help us drive some interoperability in the service mesh space,” Gabe Monroy, Microsoft’s lead product manager for containers and the former CTO of Deis, told me. “This is obviously hot technology — and for good reasons. The cloud-native ecosystem is driving the need for smarter networks and smarter pipes and service mesh technology provides answers.”

The partners here include Buoyant, HashiCorp, Solo.io, Red Hat, AspenMesh, Weaveworks, Docker, Rancher, Pivotal, Kinvolk and VMware . That’s a pretty broad coalition, though it notably doesn’t include cloud heavyweights like Google, the company behind Istio, and AWS.

“In a rapidly evolving ecosystem, having a set of common standards is critical to preserving the best possible end-user experience,” said Idit Levine, founder and CEO of Solo.io. “This was the vision behind SuperGloo — to create an abstraction layer for consistency across different meshes, which led us to the release of Service Mesh Hub last week. We are excited to see service mesh adoption evolve into an industry-level initiative with the SMI specification.”

For the time being, the interoperability features focus on traffic policy, telemetry and traffic management. Monroy argues that these are the most pressing problems right now. He also stressed that this common interface still allows the different service mesh tools to innovate and that developers can always work directly with their APIs when needed. He also stressed that the Service Mesh Interface (SMI), as this new specification is called, does not provide any of its own implementations of these features. It only defines a common set of APIs.

Currently, the most well-known service mesh is probably Istio, which Google, IBM and Lyft launched about two years ago. SMI may just bring a bit more competition to this market since it will allow developers to bet on the overall idea of a service mesh instead of a specific implementation.

In addition to SMI, Microsoft also today announced a couple of other updates around its cloud-native and Kubernetes services. It announced the first alpha of the Helm 3 package manager, for example, as well as the 1.0 release of its Kubernetes extension for Visual Studio Code and the general availability of its AKS virtual nodes, using the open source Virtual Kubelet project.

May
15
2019
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VMware acquires Bitnami to deliver packaged applications anywhere

VMware announced today that it’s acquiring Bitnami, the package application company that was a member of the Y Combinator Winter 2013 class. The companies didn’t share the purchase price.

With Bitnami, the company can now deliver more than 130 popular software packages in a variety of formats, such as Docker containers or virtual machine, an approach that should be attractive for VMware as it makes its transformation to be more of a cloud services company.

“Upon close, Bitnami will enable our customers to easily deploy application packages on any cloud — public or hybrid — and in the most optimal format — virtual machine (VM), containers and Kubernetes helm charts. Further, Bitnami will be able to augment our existing efforts to deliver a curated marketplace to VMware customers that offers a rich set of applications and development environments in addition to infrastructure software,” the company wrote in a blog post announcing the deal.

Per usual, Bitnami’s founders see the exit through the prism of being able to build out the platform faster with the help of a much larger company. “Joining forces with VMware means that we will be able to both double-down on the breadth and depth of our current offering and bring Bitnami to even more clouds as well as accelerating our push into the enterprise,” the founders wrote in a blog post on the company website.

Holger Mueller, an analyst at Constellation Research says the deal fits well with VMware’s overall strategy. “Enterprises want easy, fast ways to deploy packaged applications and providers like Bitnami take the complexity out of this process. So this is a key investment for VMware that wants to position itselfy not only as the trusted vendor for virtualizaton across the hybrid cloud, but also as a trusted application delivery vendor,” he said.

The company has raised a modest $1.1 million since its founding in 2011 and says that it has been profitable since early days when it took the funding. In the blog post, the company states that nothing will change for customers from their perspective.

“In a way, nothing is changing. We will continue to develop and maintain our application catalog across all the platforms we support and even expand to additional ones. Additionally, if you are a company using Bitnami in production, a lot of new opportunities just opened up.”

Time will tell whether that is the case, but it is likely that Bitnami will be able to expand its offerings as part of a larger organization like VMware. The deal is expected to close by the end of this quarter (which is fiscal Q2 2020 for VMware).

VMware is a member of the Dell federation of products and came over as part of the massive $67 billion EMC deal in 2016. The company operates independently, is sold as a separate company on the stock market and makes its own acquisitions.

Feb
26
2019
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New VMware Kubernetes product comes courtesy of Heptio acquisition

VMware announced a new Kubernetes product today called VMware Essential PKS, which has been created from its acquisition of Heptio for $550 million at the end of last year.

VMware already had two flavors of Kubernetes, a fully managed cloud product and an enterprise version with all of the components, such as registry and network, pre-selected by VMware. What this new version does is provide a completely open version of Kubernetes where the customer can choose all the components, giving a flexible option for those who want it, according to Scott Buchanan, senior director of product marketing for cloud-native apps at VMware.

Buchanan said the new product comes directly from the approach that Heptio had taken to selling Kubernetes prior to the acquisition. “We’re introducing a new offering called VMware Essential PKS, and that offering is a packaging of the approach that Heptio took to market and that gained a lot of traction, and that approach is a natural complement to the other Kubernetes products in the VMware portfolio,” he explained.

Buchanan acknowledged that a large part of the market is going to go for the fully managed or fully configured approaches, but there is a subset of buyers that will want more choice in their Kubernetes implementation.

“Larger enterprises with more complex infrastructure want to have a very customized approach to how they build out their architecture. They don’t want to be integrated. They just want a foundation on which to build because the organizations are larger and more complex and they’re also more likely to have an internal DevOps or SREOps team to operate the platform on a day-to-day basis,” he explained.

While these organizations want flexibility, they also require more of a consultative approach to the sale. Heptio had a 40-person field service engineering team that came over in the acquisition, and VMware is in the process of scaling that team. These folks consult with the customer and help them select the different components that make up a Kubernetes installation to fit the needs of each organization.

Buchanan, who also came over in the acquisition, says that being part of VMware (which is part of the Dell family of companies) means they have several layers of sales with VMware, Pivotal and Dell all selling the product.

Heptio is the Kubernetes startup founded by Craig McLuckie and Joe Beda, the two men who helped develop the technology while they were at Google. Heptio was founded in 2016 and raised $33.5 million prior to the acquisition, according to Crunchbase data.

Dec
11
2018
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Dell’s long game is in hybrid and private clouds

When Dell voted to buy back the VMware tracking stock and go public again this morning, you had to be wondering what exactly the strategy was behind these moves. While it’s clearly about gaining financial flexibility, the $67 billion EMC deal has always been about setting up the company for a hybrid and private cloud future.

The hybrid cloud involves managing workloads on premises and in the cloud, while private clouds are ones that companies run themselves, either in their own data centers or on dedicated hardware in the public cloud.

Patrick Moorhead, founder and principal analyst at Moor Insight & Strategy, says this approach takes a longer investment timeline, and that required the changes we saw this morning. “I believe Dell Technologies can better invest in its hybrid world with longer-term investors as the investment will be longer term, at least five years,” he said. Part of that, he said, is due to the fact that many more on-prem to public connectors services need to be built.

Dell could be the company that helps build some of those missing pieces. It has always been at its heart a hardware company, and as such either of these approaches could play to its strengths. When the company paid $67 billion for EMC in 2016, it had to have a long-term plan in mind. Michael Dell’s parents didn’t raise no fool, and he saw an opportunity with that move to push his company in a new direction.

It was probably never about EMC’s core storage offerings, although a storage component was an essential ingredient in this vision. Dell and his investor’s eyes probably were more focused on other pieces inside the federation — the loosely coupled set of companies inside the broader EMC Corporation.

The VMware bridge

The crown jewel in that group was of course VMware, the company that introduced the enterprise to server virtualization. Today, it has taken residency in the hybrid world between the on-premises data center and the cloud. Armed with broad agreements with AWS, VMware finagled its way to be a key bridge between on prem and the monstrously popular Amazon cloud. IT pros used to working with VMware would certainly be comfortable using it as a cloud control panel as they shifted their workloads to AWS cloud virtual machines.

In fact, speaking at a press conference at AWS re:Invent earlier this month, AWS CEO Andy Jassy said the partnership with VMware has been really transformational for his company on a lot of different levels. “Most of the world is virtualized on top of VMware and VMware is at the core of most enterprises. When you start trying to solve people’s problems between being on premises and in the cloud, having the partnership we have with VMware allows us to find ways for customers to use the tools they’ve been using and be able to use them on top of our platform the way they want,” Jassy told the press conference.

The two companies also announced an extension of the partnership with the new AWS Outposts servers, which bring the AWS cloud on prem where customers can choose between using VMware or AWS to manage the workloads, whether they live in the cloud or on premises. It’s unclear whether AWS will extend this to other companies’ hardware, but if they do you can be sure Dell would want to be a part of that.

Pivotal’s key role

But it’s not just VMware that Dell had its sights on when it bought EMC, it was Pivotal too. This is another company, much like VMware, that is publicly traded and operates independently of Dell, even while living inside the Dell family of products. While VMware handles managing the server side of the house, Pivotal is about building software products.

When the company went public earlier this year, CEO Rob Mee told TechCrunch that Dell recognizes that Pivotal works better as an independent entity. “From the time Dell acquired EMC, Michael was clear with me: You run the company. I’m just here to help. Dell is our largest shareholder, but we run independently. There have been opportunities to test that [since the acquisition] and it has held true,” Mee said at the time.

Virtustream could also be a key piece providing a link to run traditional enterprise applications on multi-tenant clouds. EMC bought this company in 2015 for $1.2 billion, then later spun it out as a jointly owned venture of EMC and VMware later that year. The company provides another link between applications like SAP that once only ran on prem.

Surely it had to take all the pieces to get the ones it wanted most. It might have been a big price to pay for transformation, especially since you could argue that some of the pieces were probably past their freshness dates (although even older products bring with them plenty of legacy licensing and maintenance revenue).

Even though the long-term trend is shifting toward moving to the cloud, there will be workloads that stay on premises for some time to come. It seems that Dell is trying to position itself as the hybrid/private cloud vendor and all that entails to serve those who won’t be all cloud, all the time. Whether this strategy will work long term remains to be seen, but Dell appears to be betting the house on this approach, and today’s moves only solidified that.

Dec
11
2018
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Dell votes to buy back VMware tracking stock and go public again

Dell announced it has agreed to buy back the VMware tracking stock from the EMC acquisition. The company confirmed the buy-back price of $120 per share for a total of $23.9 billion. With today’s move, Dell will return to being publicly traded starting on December 28th.

Sixty-one percent of shareholders voted in favor of the deal. It’s unclear how Wall Street will deal with the $50 billion debt load the company is carrying as a result of that $67 billion EMC acquisition from two years ago, but chairman and CEO Michael Dell got the results he wanted.

“With this vote, we are simplifying Dell Technologies’ capital structure and aligning the interests of our investors,” Dell said in a statement.

A company spokesperson confirmed that Dell is going public again. “Portions of Dell Technologies have been publicly traded through, for example, VMware and the tracker stock. The NYSE:DELL Class C shares will enable investors to invest in the full breadth of Dell Technologies company.” In plain terms, that means the company will be sold on the New York Stock Exchange under the DELL symbol.

Part of the EMC deal was a payout to shareholders based on VMware tracking stock. VMware was a key part of the deal in that it was one of the more valuable pieces in the EMC federation of companies. It still runs as a separate company with separate stock listing.

There was much drama prior to this vote with activist investor Carl Icahn suing the company last month after Dell announced a price of $21.7 billion for the tracking stock last July. The move did get Dell to move the needle on the price a bit, although not as much as Icahn had hoped.

With today’s vote, Ray Wang, founder and principal analyst at Constellation Research, says the company is looking to move away from activist investors like Icahn and Elliott Management to more traditional institutional investors. “Michael Dell is attempting to rid his short-term activist shareholders for more mid- to long-term institutional types as he goes public again,” Wang explained.

As the company returns to the public markets, it means it is in the fairly unique position of going from public to private to public again. Dell originally went public in 1988 before taking the company private again in 2013 in a $24.4 billion buy-back.

At least one other company, Deltek, took a similar path over a decade ago. It eventually was sold to private equity firm Thoma Bravo for $1.1 billion in 2012 before being sold again in 2016 for $2.8 billion.

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