Services boost drives VMware double-digit revenue growth

Virtualisation and IaaS provider VMware reported revenues for the second quarter of $1.24bn, an 11% increase compared to 2012

Virtualisation and infrastructure software company VMware has reported  revenues for the second quarter of 2013 of  $1.24bn, an 11% increase from the same period last year, driven by services revenue.

For the three months which ended June 30, VMware reported  $530.5m in licence revenue an increase $13.3m compared to the same period in 2012. Its services revenue grew 17.6% to $712.6m.

The company’s operating income for the second quarter was $270m, up 28% from last year’s second quarter while its net income for the quarter was $244m, up 28% from $192m in 2012. Its non-GAAP operating income too rose 16% for the quarter.

"The second quarter was a strong finish to a solid first half of 2013 for VMware," said Pat Gelsinger, chief executive officer, VMware.

As a result of a strong Q2, VMware’s half yearly revenue for 2013 was also up from $2.17bn in 2012 to $2.43bn with its services revenues up from $1.17bn in 2012 to $1.41bn this year.

Gelsinger said the company has a “significant market opportunity in the second half of 2013 and beyond”. He attributed the growth in revenue to the move from a “client-server era” to the “mobile-cloud era” of IT. Migrating to the new era of computing will enable businesses to attain new levels of efficiency, control and agility, according to Gelsinger.

Estimating a similar growth in the third quarter of 2013, the company is expecting its annual 2013 revenues to be in the range of $5.12bn to $5.26bn, and annual license revenues to be between $2.21bn and $2.29bn. This will represent growth rates of 15% to 18% for total revenues and 8% to 12% for license revenues.

VMware  launch of VMware vCloud Hybrid Service in May, its first attempt at a hybrid IaaS. 

At its launch, CEO Gelsinger said that the cloud service would help VMware’s 500,000 customers “reap the benefits of the public cloud without changing their existing applications”. The hybrid cloud platform couples VMware’s virtualisation and software-defined datacentre capabilities to extend in-house datacentres to the public cloud “seamlessly”

The company is also moving higher up the software stack with the support for SAP’s in-memory database, HANA, on VMware’s cloud platform.

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