VMware Rides Virtualization Wave to Strong Quarter

Continuing to ride a successful wave of enterprise server virtualization, VMware on Monday reported a strong 46 percent growth of quarterly income from the same quarter a year ago, or US$714 million up from $456 million the year prior.

The U.S. led the demand for VMware services and licences, particularly the U.S. federal government, which is heavily ramping up on virtualization, said Mark Peek, who is VMware's chief financial officer, in a statement.

U.S. revenue grew slightly ahead of revenue gathered from elsewhere in the globe. U.S revenue jumped 47 percent, to $362 million, compared to a 44 percent growth, or $352 million, for the rest of the world.

The revenue was split fairly evenly across licenses -- $343 million, up 43 percent -- and services -- $371 million, up 49 percent.

GAAP Net income for the company jumped as well, up to $85 million in this quarter, which ended on September 30, from $38 million in third quarter fiscal 2009. During this quarter, VMware acquired two companies, performance analytics software provider Integrien, and security firm TriCipher. VMware's Non-GAAP net income for the third quarter was $165 million, up from $95 million the third quarter of 2009.

The revenue beat consensus analyst predictions, who estimated the company would generate $698 million this quarter. Because of this strong performance, the company expects fourth quarter revenues to be somewhere between $790 and $810 million, which would be an increase of 30 percent to 33 percent, year-on-year.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com

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