Dell's cloud subsidiary, Pivotal, has filed for an IPO worth $100 million.
But Dell Technologies will retain its controlling share through other subsidiaries like VMware, and is set to snap up 351 million Class B shares, which offer ten times as many voting rights as Class A shares do.
While Pivotal hasn't revealed how many Class A shares it will float, nor the price per share, that means Dell will remain in control of the company it acquired as part of the EMC family in 2016.
Pivotal's revenue grew 22% year-on-year to $509.4 million in its 2018 financial year, the filing revealed, and the vendor said that subscription revenue for its Pivotal Cloud Foundry platform now exceeds its services revenue.
But the company also recorded a net loss of $163.5 million in 2018, down from a loss of $232.9 million in 2017 and $282.7 million the year before that - suggesting that although losses are being cut, they are set to continue for some time yet.
While Pivotal detailed that funding rounds have given it a market cap of $2.8 billion, the planned $100 million floatation wouldn't offset its current annual losses.
However, it sees opportunity in targeting enterprises moving to the cloud, offering an open source platform geared towards the needs of large companies.
It revealed its IPO filing yesterday, but the move is probably not a part of Dell's plans to return to being a public company, given the mooted size of Pivotal's public offering - Dell scored revenues of $61 billion in 2017.
"Pivotal may have a big role to play in helping Dell move into the cloud, but this move is unlikely to be the major component of its wider strategic plans," said TechMarketView research director Dale Peters. "The IPO of Dell Technologies is one of the options it's looking at alongside the potential business combination of Dell Technologies and VMware - I don't think the Pivotal IPO changes anything in that respect."
He added: "The $100 million is a placeholder, so we may see the figure increase once interest is gauged. It's a reasonably low risk way to raise funds, but $100 million isn't going to do much to reduce the size of Dell Technologies' debt of c.$50b billion."
The funds will likely be used to further develop its subscription services, but this will increase operating expenses -- the risk factors in the S-1 state: "We expect our operating expenses to increase significantly in the future as we hire additional sales, research and development".
Instead, Dell has detailed its options as either remaining a private company, filing for its own IPO, or merging its business with VMware, the virtualisation giant it owns an 80% stake in, which is already a public company.
Picture credit: Pivotal
