Virtualization Pro

Feb 23 2010   2:42PM GMT

VMware’s quarterly earnings and you

Makking Mak King Profile: Makking

That frenetic time in the business circles known as “earnings season” is upon us yet again. It is a time when companies announce how they have fared during their past fiscal quarter and give estimates of how their short and long term future prospects appear. These values tend to have real impacts for those that trade in the markets. They also can be used to determine how well a company is doing in its industry, in addition to what the future may hold for those that work with their product line.

VMware posted their quarterly earnings on January 25. After reading theĀ official report from VMware, I picked out a couple highlights that I thought were interesting:

- Fourth quarter revenues were up 18% from the fourth quarter of 2008
- 2009 revenues were $2.0 billion, an increase of 8% from 2008

And a quote from Paul Maritz, president and CEO:
“The quarter’s strong performance, anchored by demand for vSphere, signals that virtualization is a key technology for customers who need to save money today, yet invest in a strategy that is central to the emerging cloud computing model,”

Think about what these numbers and quote mean in the context of what has happened in the financial system over the past 18 months. Banks from the time of the Civil War have collapsed. Credit markets nearly froze up. International currencies has seen large fluctuations. Yet, VMware has actually GROWN REVENUE. Not a small amount, but a full 8% from 2008. That is astounding to me. I don’t know of any individuals that have grown their income by 8%, let alone a company doing so.

So what does that growth tell us? It tells me that some companies are still willing to spend money, if they see a tangible benefit. This benefit has be measured in dollars, not just processing cycles or application performance. Companies exist to make money, pure and simple. That is true for VMware, as well as its customers. It is apparent to me that the financial benefits of virtualization and cloud computing are sufficiently attractive even “in this economy” (for some levity, I ask you to start counting how many times you hear the expression “in this economy” in a single day — you will be amazed) to prompt customers to move forward with their IT projects, at least as much as it involves VMware and eventual cost savings for them.

What does that mean to those of us that work with and support VMware products? First, it means we are in a better position than many others in our field. This feels like having a CNE or MCSE certification did in the mid 90′s. We have seen the benefits of virtualization, have learned how it works, and have helped our own customers (whether internal or external) to reap the rewards as well. As one individual I work with likes to say: “It’s better to win.” Yes, dear reader, count yourself among them when you see VMware post quarterly results like this. It means that you have chosen to work with a software vendor with a solid product line that is in demand. Good call.

Cheers,

Mak King

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