VMware bucks downturn in first quarter

Peter Dinham
Thursday, 23 April 2009 14:55

Business IT - Technology

“With these “internal” clouds, IT departments will be able to dramatically simplify how computing is delivered in order to help decrease cost and increase flexibility, enabling IT to respond more rapidly to changing business requirements, claimed Maritz.

And, according to Maritz, with this announcement, “VMware is once again redefining the scope and value of virtualization for our customers. This substantial new platform brings the benefits of cloud computing to the enterprise in an evolutionary and non-disruptive way– delivering uncompromising control with greater efficiency while preserving customer choice.”

VMware also reported first quarter services revenues of US$213.3 million, a 48% increase from last year, with Maritz commenting that the company’s business mix continues to shift, with services revenues becoming a larger proportion of total revenues.

“In the first quarter, services revenues were 45% of total revenues compared to 33% a year ago, and driven by the challenging macroeconomic environment, license revenues were US$257.0 million, a decline of 13% from a year ago.”

VMware’s chief financial officer, Mark Peek, said  operational execution had resulted in strong cash flow, and enabled the company to “continue to make the strategic investments needed to grow our business.”

However, due to the tough economic conditions, Peek said he expect customers would continue to keep a very tight rein on their IT spending, particularly new investments.

“Also during this quarter, we and our extensive ecosystem of partners will begin the transition to VMware vSphere 4. As a result, we expect our second quarter revenues will be flat, or even down, compared to the second quarter of 2008,” Peek cautioned.