VMware On Track To Produce 50% Revenue Growth This Year

VMware finished its first quarter of 2008 with $43 million in net income compared with $41 million the year before, after software license revenue grew 73% year over year and support, subscription, and professional services revenue grew 62%.

License revenue was $294 million and service revenue was $144 million, for a total of $438 million, an increase of 69% over the same quarter of the previous year.

Earnings per share declined slightly from 12 cents in the first quarter of 2007 to 11 cents in the first quarter of 2008, based on net income calculated by generally accepted accounting principles.

VMware saw its first $1 billion-plus year in revenue last year, closing out 2007 with revenue of $1.3 billion. It expects a 50% jump in revenue growth in 2008. Second-quarter revenue this year is expected to increase 55% compared with last year, said Diane Greene, president and CEO of the company that is a subsidiary of EMC.

Customers who virtualize their data centers with VMware's ESX Server hypervisor and its Virtual Infrastructure 3 management software "get an insurance policy for business continuity and disaster recovery" by using the virtualization market leader's products, Greene added.

Greene said VMware expects revenue to continue to grow as customers rapidly expand their adoption of virtualization after test-driving it for the past year or two. VMware will also continue to expand its "multitier partner distribution model," in which it encourages partners to use and install its products and independent software vendors to distribute their applications as virtual appliances.

In addition to growing U.S. revenue at a rate of 65%, VMware's revenues from Brazil, China, India, and Russia are growing at a triple-digit rate, Greene said. Overall, international revenue is growing at 74%, she said.