Why Pivotal’s Xtreme Labs Acquisition is a Game Changer for Mobile Apps + Big Data

xtreme_labs_headerOn October 2, Pivotal made its first acquisition, Xtreme Labs. Shortly afterwards, Pivotal had an internal “Town Hall” meeting where many employees met the Xtreme Labs co-founders, Sundeep (Sunny) and Amar Varma, for the first time. They shared their history as a company, and as the meeting concluded, it felt less like meeting new faces and more like a homecoming.

That’s because in many ways, it was.

Mobile Roots from a Pivotal Seed

The relationship with what would become Xtreme Labs and Pivotal Labs started back in 2006.

Madra was working at a start-up and in the process of planning work with Pivotal Labs. As part of the ‘Pivotal Way’, customers come on-site to work at Pivotal and get steeped in their approach—from new hire interview tests to paired programming and the agile development process.  Over the next 9 months, Madra worked with Pivotal on his start-up, a knowledge sharing platform.

Converted to the Pivotal style development practices, Madra contacted his colleague and fellow Xtreme Labs co-founder, Amar Varma.  “I had been a software developer for a while, and I thought Pivotal was doing some really interesting things. Amar and I wanted to work together for some time, and we saw the mobile space taking off. We wanted to apply our version of the Pivotal way to the mobile space.”

Just after the iPhone was launched in 2007, the two began their journey. This was a very different time for mobile as Blackberry was the enterprise standard phone and Apple’s App Store didn’t exist until 2008. But the two founders saw an opportunity, and decided to seize it.

To get their company off the ground, the two co-founders sat down with Pivotal founder, Rob Mee, and shared they wanted to build a company like Pivotal Labs, but focused exclusively on developing mobile applications. “Rob was great,” said Varma. “He supported us the whole way, advising us on how to approach setting up our business and basically giving us an operating playbook.”

The two Xtreme Labs founders then went out and landed their first mobile contract and partnered with Pivotal. Since then, Xtreme Labs has gone on to service over 400 clients, such as Viacom, Shutterstock, Mountain Equipment Coop, Bell, Viggle, and the two companies have shared many projects.

Mobile Is Evolving

Since 2007, a lot has changed in the mobile space.  Mostly, it boils down to mobile device and applications have collided.

When Xtreme Labs was founded, the majority of their work surrounded making attractive, user friendly apps work on mobile devices. But in the early days, many of the apps they built could be considered simplistic in comparison to the apps of today. Today, application frameworks provide a better, faster application experience, and the apps themselves are more sophisticated, using geo-location, browsing history, and social media profiling to tailor user experience.

Since 2007, mobile applications have evolved to become at least on par for user experience with desktop applications, and certainly have become more convenient. In fact, this year is set to be the year when the pendulum finally swings and mobile traffic becomes more than 50% of the overall internet traffic, beating out desktop browsers.

With the types of projects converging, an acquisition seemed like a good idea. Madra states, “Our relationship has now come full-circle. Combining the companies is less about culture or process and more about knowledge-sharing in a growth area. When we started, mobile was small and not a big part of our customers’ traffic. Now, many of our clients do more traffic on the mobile device than the website.”

Data is the Key to Mobile App Evolution

According to Madra, “Our customers now ask why and how we fit with Pivotal. So, I use a simple example everyone is familiar with. Xtreme Labs is like Batman’s tool belt. We focus on mobile and have great tools to do iOS and Android development really well. Pivotal brings the entire Bat Cave—the car, the motorcycle, the plane, advanced laboratories, a supercomputer, and more. This is important for the future of mobile solutions, particularly when we consider data and analytics.”

Mobile generates a lot of data—in many cases, it can be more data than traditional websites. There are many more sensors and ways to collect data. On a traditional desktop, you might be able to capture the type of browser, version, and OS. With a phone, you have the same browser, version, and OS, but you also have access to geo-location, an accelerometer, a gyroscope, as well as the cameras and microphones—creating an infinite stream of big data.

Today’s mobile apps are also getting more sophisticated in how they capture and analyze data. Each project today seems to revolve around using big data to better target their customers and revenue.

“Today, many applications are their own product, line of business, or have a direct impact on revenue,” states Varma. “For example the Viggle app uses the phone’s microphone to sync with television audio. They use this information to then push a real-time data stream of premium content back to the phone for two-screen viewing. Within this consumer media experience, what happens on TV triggers a push to the phone—even ads on the television can be linked to the phone with audio content recognition.”

Getting improved returns on advertising is the holy grail of the ad business. Correlating content to a person’s experience right at that minute, whether it is video programming or timed offers, means that consumers are already in a mental state to consider a purchase, increasing their chances to respond to the advertisement and raising sales.

To illustrate, Varma shares an example of a cruise line who will providing apps for people to use while on the ship—deck plans, port guides, schedules, and even messaging through WIFI to reduce overseas telecommunications expenses. The app also captures data to analyze people’s habits and promote offers. For example, if they know a customer goes to the gym early every morning, they can promote a morning spa package to them. Since the spa often has availability in the morning, the promotion generates incremental revenue that hits the bottom line.

Where Mobile is Going with Pivotal

“As we look across Pivotal’s products, there are some powerful opportunities with Spring, CloudFoundry, and big data solutions like GemFire, Pivotal HD, and HAWQ,” says Madra.

Madra believes that wherever we have mobile development clients that are also Spring shops, there is an opportunity to create value. For example, Xtreme Labs’ financial service customers are wide users of the Spring framework.

As one company, Xtreme Labs now leverages the entire Spring team and ecosystem in the mobile solution space. Of course, the Spring Mobile and Spring for Android projects existed already, and projects like Spring XD will shift how companies design and develop real-time analytics solutions for mobile data capture. There are also opportunities to address Java runtime efficiency and cost with tc Server.

Another big area of opportunity today is the mobile workforce.

For example, Lowe’s made the decision to purchase 42,000 iPads and iPhones for employees to use at the point of sale, improve customer service on the floor. With handy tablets, everything from activities like inventory checks to back-office system access for employee timesheets becomes easier. Before, the employees couldn’t access internal systems, only managers could which created significant bottlenecks.

Now, greater system access means companies like Lowe’s has needs for improved scalability of their systems, and this is where Pivotal Labs and our expertise with all of the Pivotal application, data and cloud fabrics will help.  Pivotal brings solutions like GemFire to help scale traditional databases or mainframes. As well, companies can deploy new, mobile capabilities on an open PaaS like CloudFoundry, allowing for apps to be ported between IT data centers and 3rd party clouds.

Of course, some of the data-driven mobile examples above point out the power of analytics and big data in the mobile space. As mobile apps become more sophisticated and impact revenue, analysis will become more important. Here, Pivotal HD, HAWQ, and other data and analytical products can analyze unstructured data like microphone audio or the entire set of behavioral and transactional data captured around location.

Summing up the whole story, Madra explains, “Mobile apps are becoming smarter and more sophisticated—and companies need to measure their impact financially. In addition, we are seeing a growing trend where companies are developing mobile apps with analytics, big data, and cloud computing in mind. So as these trends are emerging in the market, it makes perfect sense for us to combine our mobile expertise with Pivotal’s big data, cloud and application development expertise so we can build better products and services for the mobile market.”

More Information About Pivotal + Xtreme Labs

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