VMware posts billion dollar quarter

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VMware posts billion dollar quarter

Alex Scroxton
VMware has posted yet another stellar quarter as demand for cloud computing technology continues to ramp up, with Q4 and full year sales up 27% and 32% to $1.06bn (£680m) and $3.77bn respectively.

Fourth quarter net income was $200m, up from $120m this time last year, while full year profits more than doubled from $357m to $724m.

Broken out in greater depth, licence sales grew 31% to $1.84bn and service sales, including software maintenance and professional services, were up 31% to $1.93bn. New billings rose 29%, knocking analyst estimates for six and offering further proof, if proof were still needed, that the market for server virtualisation shows absolutely no signs of slowing down.

"The quarter's strong performance further signals that virtualisation is the foundation for
simplifying and automating IT," said CEO Paul Maritz. "As customers continue to drive significant IT transformation, our task remains in providing solutions that go beyond cost reduction, yielding business and competitive value."

However some market watchers have suggested that 2012 could be a tougher year for VMware. Investment research house Zacks downgraded the firm's stock to neutral, warning that a combination of poor spending environments in the US and EMEA, coupled with renewed attacks from rivals such as Microsoft and Citrix, could prove an obstacle to future growth.

Looking ahead, VMware CFO Mark Peek projected first quarter 2012 to fall somewhere around the $1.01bn to $1.04bn mark, up between 20% and 23% on Q1'11.

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