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VMWare Smashes $1 billion Quarter

VMWare Smashes $1 billion Quarter

Virtualisation behemoth VMWare has surpassed financial predictions to smash the $1 billion barrier in the fourth quarter of 2011. The scale of VMware's virtual server revenue stream now rivals IBM's Power Systems and System z mainframe physical server businesses (individually) and, according the The Register, is roughly the same size as the systems business at Oracle, and larger than the Itanium-based server business at HP. In the final quarter of last year, VMware sold $513.8m in software licenses for its myriad virtualization tools, showing an increase of 21.6 per cent compared to the same period in 2010. Services revenues rose further, showing a 32.2 per cent increase, hitting $546.5m. In told the company's sales for the final quarter hit $1.06bn, up 26.9 per cent. Despite skyrocketing costs, president and CEO Paul Maritz kept an iron hand on spending and boosted net income by an impressive 67.2 per cent to $200.4m - meaning VMware brought in almost a fifth of its revenue to the bottom line. You might think that the launch of the ESXi 5.0 hypervisor, the vSphere 5.0 management stack, plus vCloud extensions for cloud management, which all came out last summer, no doubt helped VMware have a strong finish to the year. But software license sales actually cooled quite a bit as 2011 came to an end, perhaps thanks to server refresh cycles being delayed by Intel and AMD, or perhaps because customers are just jumpy about the global economy. For all of 2012 VMware expects to have sales of between $4.475bn and $4.6bn - an increase of between 19 and 22 per cent over 2011's sales.

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