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VMware posts profit and sales increase driven by record licence sales in Q2 2011

Jenny Williams

VMware's latest results reflect increasing adoption of virtualisation as more businesses switch physical servers and desktops to virtual infrastructure. Sales increased 37% to $921m while profits more than doubled in the second quarter of 2011, driven by record enterprise licence sales of its virtualisation portfolio.

According to the company's latest financial results, VMware's sales increased 37% in the second quarter of 2011, compared with the same period last year, to reach $921m (£570.5m). Licence sales were $465m for the quarter, an increase of 44% compared with last year's figures.

Profits more than doubled from $75m in the second quarter of 2010 to $220m in the second quarter of 2011.

Mark Peek, chief financial officer, said the quarter results were driven by "strength across geographies and record enterprise licence agreement bookings as a percentage of total bookings".

International sales grew 38% to $471m from the second quarter 2010. Service sales, including software maintenance and professional services, were $456m for the quarter, an increase of 30% on 2010's figures. The company expects third quarter sales to increase up to 32%, with annual sales showing an increase of up to 31% compared with 2010.

"The quarter's strong performance reflects the continued adoption of virtualisation as a key technology for the next era of computing," said VMware CEO Paul Maritz.

"VMware will continue to help customers accelerate towards more efficiency, flexibility and automation with VMware vSphere5 and the cloud infrastructure suite," he added.

VMware's vSphere5 was unveiled this month and introduces the company's new licencing model based on memory, called vRAM.

In an analysis of vSphere5, Computer Weekly's sister site, SearchVMware.com noted that VMware had introduced vSphere Desktop to address some licencing concerns and costs. "The vSphere 5 licensing model isn't exactly the best fit for virtual desktop infrastructure (VDI), so VMware came out with a separate edition specifically for this use case," said SearchVMware.com.


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