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7/24/2014
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VMware Reports Solid Quarter, Bookings Jump 24%

Revenue came in at the high end of expectations, though expanded product line "will take time to ramp."

7 Cloud Service Startups To Watch
7 Cloud Service Startups To Watch
(Click image for larger view and slideshow.)

VMware turned in "solid" second quarter 2014 results with revenue growth of 17.2% and order bookings growth of 24%.

Enterprise license agreements, in which VMware sells more products to the same customer, moved up to 37% of total bookings, the company said Tuesday, compared to 25% for the same quarter the year before.

The results represented revenue of $1.46 billion for the quarter, higher than the $1.43 billion estimated by Wells Fargo equities analyst Jason Maynard, and at the high end of VMware's own quarterly projection. Net income was $167 million or 38 cents per share, compared to $245 million or 57 cents per share for the same quarter last year. VMware has $6.64 billion in cash, cash equivalents, and short-term investments on hand.

VMware CFO Jonathan Chadwick said it had made eight deals worth more than $10 million in Q2, some of which slipped into the second quarter when they didn't close during the first quarter.

[Want to learn more about how containers may affect VMware? See What Docker Means For VMware, Cloud.]

"We continue to see strong performance across our business, further evidence that VMware is uniquely positioned as IT transitions from client-server computing to the mobile-cloud era," said CEO Pat Gelsinger.

(Source: Pixabay)
(Source: Pixabay)

Maynard termed the quarter a solid one for VMware but predicted its stock would grow in value at a "low double-digit" rate "whereas the consensus view is mid-teens or better," he wrote in a research note about the earnings call. "We think adjacencies like management tools and vSAN and acquired products, such as AirWatch and NSX, have great promise but will take time to ramp."

VMware just announced its vCloud Hybrid Service will expand into Asia Pacific through partnerships in both Japan and China. It will offer vCloud-based services through a China Telecom partnership from a data center in Beijing and through SoftBank in Japan. VCloud Hybrid Service is meant to offer a compatible environment in cloud data centers for enterprise VMware product users who want to move some of their work into the cloud.

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Charles Babcock is an editor-at-large for InformationWeek, having joined the publication in 2003. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive Week. He is a graduate of Syracuse ... View Full Bio

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Stratustician
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Stratustician,
User Rank: Ninja
7/26/2014 | 12:00:13 PM
Re: The well-orchestrated legacy data center
There's no doubt that while Amazon and Microsoft might have the public/hosted cloud market figured out, VMware still seems to dominate the in-house/private cloud market.  Makes sense as they've made significant investments in building tools to support not just legacy apps, but also services such as internal billing (Chargeback) and strong management tools.  
batye
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batye,
User Rank: Ninja
7/24/2014 | 8:55:24 PM
Re: The well-orchestrated legacy data center
for now it would be a temporary good investment :)
progman2000
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progman2000,
User Rank: Moderator
7/24/2014 | 4:02:39 PM
Re: The well-orchestrated legacy data center
Wow, nice movement on the stock too.  Figures, I don't own any...
kbannan100
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kbannan100,
User Rank: Strategist
7/24/2014 | 2:39:11 PM
Re: The well-orchestrated legacy data center
This is good news for VMware, EMC (which is probably providing a good chunk of the hardware) and users who want to offer more x-as-a-service offerings such as IT-as-a-Service. More virtualization is also good for the environment and for a company's bottom line since they don't have to build more data centers, buy more hardware and pay for software licenses they don't need. 

Virtualization has been a crucial piece when redefining IT and the operating model. 

--KB 

Me: http://bit.ly/1iMdSE5  

 
Charlie Babcock
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Charlie Babcock,
User Rank: Author
7/24/2014 | 1:27:07 PM
The well-orchestrated legacy data center
Unless companies resolve to rewrite most of their legacy applications, VMware has a great future as the orchestrator of the ongoing, legacy and somewhat uncloudlike enterprise data center. In many cases, "private cloud" is going to look a lot like well-orchestrated virtualization. And that in itself will be a big gain over the previous way of doing things. Does it go far enough? Depends on how badly you want the benefits of simplified, automated cloud computing with radically simplified development procedures.
Multicloud Infrastructure & Application Management
Multicloud Infrastructure & Application Management
Enterprise cloud adoption has evolved to the point where hybrid public/private cloud designs and use of multiple providers is common. Who among us has mastered provisioning resources in different clouds; allocating the right resources to each application; assigning applications to the "best" cloud provider based on performance or reliability requirements.
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