VMware licence revenues plunge 20%

VMware has reported a 20% decline in license revenue in its second quarter results, suggesting that even growth technologies like virtualisation are being affected by the downturn.  

The virtualisation leader’s net profit fell to $33 million from $52 million in the same quarter last year, on the back of flat revenues of $456 million. Licence revenue fell to $228 million.

Following a dramatic slow down in the first quarter, VMware’s latest results still beat Wall Street estimates and sent the software firm’s stock up 7%."We executed around what we said we were going to do," said the company’s chief operating officer Tod Nielsen. "People appreciated that."

The company blamed “the challenging macroeconomic environment” and said it was having difficulty closing large deals, however small projects were still forthcoming.

It also said the introduction of a new product, vSphere, had affected sales by channel partners as they focused on training. vSphere is marketed as a ‘cloud operating system’ allowing organisations to provision their own cloud-based processing, storage and networking requirements.

Rival virtualisation vendor Citrix, meanwhile, saw second quarter revenues that were similarly flat at $392.8 million, the company revealed this week. But net income rose 23% to $42.5 million, somewhat challenging the perception that VMware is the rockstar of the virtualisation sector. In Europe, however, Citrix’s revenues fell by 12% to $113 million.

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