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vSphere Rakes It In for VMware

Revenue for the virtualization company continues to build on the strength of its hypervisor technology, but there's growing interest in its cloud services.

• By Michael Domingo
• 04/22/2014

VMware's latest quarter was a profitable one, and vSphere helped to rake in the biggest portion. And there are indications that companies shifting from client-server computing to cloud-based services are liking what they see in VMware's offerings.

First off, VMware netted $199 million in earnings on $1.36 billion in revenue for the first fiscal quarter of 2014. Those results are 14 percent better than the year ago quarter (in which profit for Q1 2013 was $173 million, and revenue was $1.19 billion).

Licensing revenues accounted for 41 percent of total revenues, at $561 million, with ongoing maintenance revenues and professional services making up the other 59 percent. Compared to the year-ago quarter, licensing revenue is up by 18 percent.

COO John Chadwick said during an earnings webcast that vSphere licensing revenue grew, with "non-stand-alone license bookings of vSphere again at greater than 45 percent of total license bookings, as compared with greater than 30 percent in Q1 2013."

Meanwhile, he also said that the AirWatch acquisition that took place earlier this year alone contributed $5 million in profit, with licensing and maintenance split down the middle, and is expected to contribute $100 million when the year is done. COO Carl Eschenbach said that bookings for components in the vCloud suite totaled around 30 percent year over year, and 50 percent of end user license agreements contained some component of vCloud suite. He said that the company's hybrid cloud business also grew 100 percent year over year.

"As the industry shifts from client-server computing to the mobile-cloud era, customers are choosing our solutions because we have the most complete vision and offering for navigating this evolving world," said VMware CEO Pat Gelsinger.

VMware's official Q1 2014 earnings press release, a replay of the earnings call, and other financial information can be found here.