Virtualisation uptake still rapid, VMware sales show

Revenues at virtualisation software vendor VMware beat Wall Street expectations in the second quarter of its financial year, leaping 48% to $673.9 million.

For the first time, more than half ($340 million) of VMware’s sales came from outside its native US in the three months ending June 30, as its non-US markets grew 53%.

The company’s business is currently divided almost equally between licence sales, which grew 42% to $324 million in the latest quarter, and services revenue, up 54% to $340 million.

VMware’s net income performance was similarly strong, rising to $74.5 million from $32.5 million in the year ago quarter.

The company told investment analysts in a conference call that it expects future demand for virtualisation software to be driven not only by cloud computing but also by a variety of new business technology paradigms including mobility.

“IT executives are exploring much broader architectural implications of managing users in dramatically different ways,” explained COO Todd Nielsen. “Many customers are not looking at a traditional product/feature/cost/benefit analysis, but rather asking larger questions about how they’re going to manage users in a dramatically changing world defined by mobility, ubiquitous computing, and increasing end-user demand and expectations.”

The figures show that VMware is still going from strength-to-strength in the hardware virtualisation segment, despite rivals Microsoft and Citrix ramping up their respective efforts.The former announced in March that it would offer free virtual desktop infrastructure (VDI) licenses to those customers willing to leave VMware.

As the graph below demonstrates, VMware has consistently outstripped the IT industry average revenues, according to the Information Age Index, even during the the darkest days of the 08/09 global recession.

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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