Feeds

VMware sucks more customers into its virtual orbit

Earnings beat estimates, see return to customer growth

The essential guide to IT transformation

VMware's third quarter earnings for 2013 comfortably beat analysts' estimates, driving the virty company's share price up, though there is little evidence of major spending on the company's attempt at building an Amazon-whipping cloud.

Just last quarter, the company had suffered from sludgy license revenue growth but trousered a decent profit, partly due to layoffs. The results filed on Monday showed both growth in licenses as well as support – and profit.

VMware turned over $1.29bn for the quarter with a net income of $261m, compared with $1.24bn and $244m in the previous quarter.

The company reported an earnings per share of $0.84, versus analyst expectations of $0.82. The good results drove the company's share price up 8.3 percent in after-hours trading.

"Our strong performance in Q3 is clear validation that our customers have confidence to let us help them," said chief Pat Gelsinger on a conference call discussing the results.

The company grew its software licenses revenue to $564m from $530m in the previous quarter, and software services – primarily revenue from support – crept up to $725m.

Though VMware launched its strategically important vCloud Hybrid Service this year in an attempt to take on Amazon and Microsoft in the cloud, few mentions were made on the call of the company's "cloud" division.

The results filing showed that the company's spending on property and equipment rose to $94m in the quarter, up from $75m a year ago.

This is meaningless as far as cloud data centers go, since a full-fat mega-facility will cost anywhere between $200m and $600m. So far, there is little evidence that VMware is building a large cloud, and all signs point to an incremental infrastructure addition rather than anything truly impressive.

The company said on the call that sales of its vCloud Management Suite exceeded internal expectations, but failed to specify what those expectations were.

VMware upped its full-year revenue expectations to $5.26bn, up from a prior estimate of $5.24bn on the back of projecting greater federal government and enterprise contracts.

The only headwind this hack can see for VMware is the growth of clouds running on homebrew Xen hypervisors (Amazon), or an increasing decision by companies to use Sun Containers–esque technology like current flavor-of-the-month Docker instead of more typical virtualization approaches, but the threat these shifts pose is miniscule for now. ®

Next gen security for virtualised datacentres

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?