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VMware sees growing SMB, desktop order book in Q2

Alex Scroxton

Strong market demand for its vSphere packages in the SMB market helped virtualisation experts VMware book a record number of transactions during its second quarter, according to company CFO Mark Peek.

Reflecting the general mood of recovery in the market, COO Todd Nielsen remarked: "The industry continues to be broadly benefiting from pent-up customer demand."

He added that VMware continued to hold "high expectations" for the desktop virtualisation market, although could not yet predict at what pace sales would pick up, with much hanging on the strength of the Windows 7 upgrade process.

Speaking on a conference call, Nielsen said VMware was seeing up to 60% of its proof-of-concept resource focused on VDI and desktop virtualisation sectors, although he did not specify which quarter he was talking about.

Like many large US vendors, the European macroeconomic crisis haunted VMware's quarter, with the vendor expressing caution about the remainder of the year after noting sequential sales declines in some of the key EMEA markets, including the UK.

The strengthening US dollar did not help matters, said Peek, who noted that the posted gains against the pound, euro and Australian dollar "negatively impacts our top-line license revenue when converted from those currencies."

All told, VMware second quarter sales grew 48% year-on-year to $674m (£442.9m), with international revenues up 53% to $340m, license revenues up 42% to $324m and services sales - including software maintenance and professional services - were up 54% on the year-ago period to $350m.

VMware banked GAAP operating income of $101m and GAAP net income of $75m, up from $33m in Q2'09.

The firm is now targeting full-year revenues of around $2.6bn.


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