VMware profit up 62%

As the IT industry falls apart around it, virtualisation software provider VMware is significantly increasing its profitability.

Net income for the first quarter of its financial year was $69.9 million, up 62% from $43.1 million in last year’s first quarter.

Revenues, meanwhile, grew a modest (but in this context, impressive) 7% year-on-year to $470.3 million.

However, there were ill portents in the numbers. Licence revenues for the quarter fell by 13% to $257 million, although. This was compensated for by a 48% rise in services revenue, up to $213.3 million.

The company predicted that revenues will either remain the same or shrink in the second quarter of the financial year.

“Due to the tough economic conditions, we expect customers will continue to keep a very tight rein on their IT spending, particularly new investments,” said VMware CFO Mark Peek. “Also during this quarter, we and our extensive ecosystem of partners will begin the transition to VMware vSphere4.”

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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