When VMware released its Q2 2011 results the other day the figures were impressive in their own right but they were also clear evidence of the momentum around cloud computing and the importance of virtualisation technology in enabling it (see Diversity – driven by the cloud). And that means VMware has robust prospects.
Not surprisingly, CEO Paul Maritz cited the adoption of virtualisation and the key role it plays in “the next era of computing” as a Q2 revenue driver that resulted in a 37% increase in sales (35% cc) to $921m, way above expectations of $837m. That Q2 was the seventh consecutive quarter of double-digit growth was another bonus and cloud momentum indicator.
Operating income soared 85% to $187m, with net income rising to $220m from $75m. The operating margin was 31.6%.
The overall figures were helped by growth in services revenue. $70m of the $456m services revenue was from professional services, which was a rise of 17%, although some of this was due to M&A activity. The rest was from maintenance and support. However, licence sales (arguably the real indicator of performance) grew by 44% to $465m and with a rich existing product portfolio and new entrants such as vSphere5 the company has a solid and expanding foundation. vSphere is interesting because of its role in enabling private clouds.
The only thing to take down the mood was the news that while US revenue was up 35%, and international expanded by 38%, this was largely due to growth in Asia. VMware said conditions were worsening in Europe, across the region.