| From: Glenn Petersen | 6/2/2017 10:18:22 AM | | | | | | VMware beats profit estimates, raises full-year forecast
Reuters
Thu Jun 1, 2017 | 6:38pm EDT
Virtualization software maker VMware Inc ( VMW.N) on Thursday reported a better-than-expected first-quarter profit and raised its full-year forecast, fueled by strong demand for its software used by companies to boost cloud computing efficiency.
Still, VMware shares fell as much as 6.6 percent in extended trading after the company released its results, but pulled back to trade down about 2 percent after VMware provided the forecast on a call with analysts.
Summit Redstone Partners analyst Srini Nandury said the initial drop in the stock could have been due to VMware's billings — the total revenue plus the change in deferred revenue — falling short of expectations. Billings are an indicator of future revenue.
VMware has benefited from strong demand from businesses for its virtualization software that allows one computer or server to perform the work of multiple machines by emulating them, which boosts efficiency and helps cut costs.
The company's net income rose 44.1 percent to $232 million, or 56 cents per share, in the first quarter ended May 5. Excluding one-time items, it earned 99 cents per share.
The company said revenue climbed 9.3 percent to $1.74 billion, with services revenue rising 10.7 percent to $1.13 billion.
Analysts had expected a profit of 95 cents per share and total revenue of $1.71 billion, according to Thomson Reuters I/B/E/S.
VMware's adjusted operating margin of 28.5 percent was lower than its margin of more than 30 percent in the past three quarters.
The company, which is majority-owned by Dell Technologies Inc ( DVMT.N), said research and development costs jumped 18.2 percent, while sales and marketing expenses rose 3.7 percent.
VMware's billings of $1.35 billion was below Wall Street's estimates of $1.6 billion, Summit Redstone's Nandury said.
Still, the company's revenue forecast for the current quarter was better than expected, while it raised its full-year revenue forecast.
VMware forecast current-quarter revenue of $1.84 billion-$1.89 billion, while analysts' were expecting $1.81 billion.
Its profit forecast of $1.11-$1.14 per share for the period edged past analysts' estimate of $1.09.
The company raised its full-year revenue forecast to $7.61 billion from a prior forecast of $7.57 billion.
Shares of Palo Alto, California-based VMware have risen about 58 percent in the last 12 months.
(Reporting by Laharee Chatterjee in Bengaluru; Editing by Sai Sachin Ravikumar)
reuters.com |
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| From: Glenn Petersen | 8/29/2017 10:57:33 AM | | | | | | What You Need To Know About VMware Cloud On Amazon Web Services
Janakiram MSV , Contributor
Forbes
August 29, 2017
Almost after a year of the announcement, VMware Cloud on AWS is finally available to customers. At VMWorld 2017, both the companies highlighted the benefits of the partnership. Existing businesses using VMware stack can easily extend their virtualized data center to Amazon’s public cloud.
Source: VMware
VMware and AWS Partnership
________________________________-
VMware’s decision to embrace AWS as its public cloud surprised industry analysts as well as customers. After all, AWS was an arch rival that continued to threaten the core business model of virtualization and private cloud.
Subsequently, VMware sold vCloud Air, the original public cloud offering that was launched with much fanfare in 2013. It gave the company the opportunity to stay focused on its bets.
Will this deal help VMware in the long term? What does it mean to AWS, who is already the leader in the public cloud market? How will this partnership influence Microsoft? Let's find out.
VMware has done the right thing by getting rid of its public cloud business. Developing the data center management software is very different from managing the data center in itself. While VMware has proven track record of developing the virtualization platform and management tools, it realized it cannot handle massive data centers spread across the globe. Having taken the crucial decision of moving away from the public cloud, VMware swallowed its pride when it approached its key competitor for partnership.
Pat Gelsinger, VMware’s CEO and his leadership team were fully aware of the long-term implications of the deal. When you consciously exit a market segment to protect the interest of the core business, the next logical step is to partner with the leader in that segment. VMware has done precisely that – partnering with the public cloud leader. This move would also checkmate Microsoft, which is a much bigger threat than the public cloud. So, VMware hit two birds with one shot.
VMware's customers were already making a move to AWS eroding the revenue opportunity around vSphere and vCenter. On the other hand, Amazon started to build tools for vSphere to lure enterprises to its public cloud. With the IT spend moving to public cloud, it would be extremely challenging for VMware to convince customers to continue investing in its flagship products. The partnership with AWS eases the tension by enabling customers to use VMware products while still moving to the public cloud. The super aggressive sales teams at VMware can continue to push the envelope without ever fearing the public cloud threat.
When it comes to infrastructure, VMware can ride on top of Amazon's global footprint. Customers across the globe can choose a region closer to their data center for public cloud migration. VMware would not have built the kind of infrastructure that AWS delivers. When Amazon announces a new region, VMware can piggyback on it without the CapEx and the management expertise. This comes as a huge win to VMware and its ecosystem.
Here comes the best thing about the deal – VMware gets to run its own stack in AWS. It is not giving up on Sphere for Xen or NSX for VPC. For all practical purposes, VMware Cloud is the best rollout of its Software Defined Data Center (SDDC) platform running in 10+ regions. Customers consuming VMware cloud will not even realize that they are dealing with AWS. The whole user experience, tooling, pricing, licensing, and workflow is so familiar that customers wouldn’t even need to know that their virtual machines are running on Amazon’s infrastructure.
 Source: Janakiram MSV
VMware Stack on AWS
_____________________________
The most interesting aspect of this deal is that AWS has become a co-location provider for AWS. Except for the underlying physical infrastructure, VMware stack doesn’t have any dependencies on Amazon’s cloud services. The bottom line is that VMware has got the most reliable and widespread real estate provider to run its public cloud.
If this is a such a strategic move for VMware, what’s in it for AWS? Andy Jassy, CEO of AWS is considered to be an incredibly shrewd businessman. His consent to this partnership means that it is certainly valuable for AWS in the long term.
Private cloud to AWS is what public cloud was to VMware. It is simply not their strength. Though AWS executives deny the potential value of private cloud, it is a known fact that many workloads can never move to the public cloud. Customers who benefited from the public cloud want similar capabilities in their data centers. This is, of course, the sweet spot for Microsoft. If AWS doesn’t have a strong on-premises to cloud migration story, Microsoft’s Azure Stack is waiting in the wings to take over the opportunity. Amazon’s partnership with VMware will counter the Azure Stack threat. With one stroke, AWS gained the foothold over some of the largest enterprises running VMware stack. It is now confident that even if customers run a different software stack, their workloads will ultimately run on AWS infrastructure.
With VMware cloud co-located with Amazon’s cloud, there is a potential opportunity to cross-sell and up-sell the services. Large enterprises, that are customers of VMware can easily move their data warehouses to Amazon Redshift. When their enterprise agreements with Oracle or Microsoft come for renewal, they can choose to go with Amazon’s relational database service. They can also take advantage of the emerging services related to Internet of Things, Machine Learning and Artificial Intelligence, where VMware has no role to play. Once the cross-pollination of services takes place, customers will never leave AWS. This will transform into an ultimate win for AWS. Amazon just got a very compelling value proposition for its hybrid cloud.
Finally, AWS will leverage the massive salesforce of VMware to drive their cloud adoption. Every new deal to VMware Cloud indirectly fetches revenue to AWS. This would open up additional GTM opportunities for the partner ecosystem.
Let’s shift gears and analyze the impact of this deal on Microsoft.
Microsoft has taken time to ship Azure Stack, its private cloud platform, a competitor to VMware’s vCloud Suite. The delay was mainly due to the changing market dynamics. Microsoft has learned from the mistakes committed by VMware. Redmond is clear that its private cloud offering should closely resemble the public cloud capabilities delivered through Azure. The modular architecture, parity with the public cloud and partnership with OEMs make Azure Stack a very compelling private cloud offering in the market. Microsoft’s goal is to move every System Center customer to Azure by making the migration seamless. The company is counting on Azure Stack to make this happen.
VMware Cloud on AWS will indirectly help Microsoft is telling a cohesive story to customers about its unified hybrid cloud strategy. It will emphasize on the fact that Azure on-premises and Azure in the public cloud is a better combination than VMware in enterprise and AWS in the public cloud. It will be interesting to watch how Microsoft will respond in the coming months.
These dynamics left Google in a strange position. Google got to fix its weak hybrid story. With AWS and Microsoft strengthening their hybrid offerings, Google is looking for a partner. It recently announced a deal with Nutanix for the same reasons. But Nutanix’s presence in enterprise data centers is much smaller compared to VMware and Microsoft.
The changing market dynamics will benefit enterprise customers. The platform vendors are sorting out issues to make it easy for the customers to move to the cloud, which is certainly a welcome sign.
forbes.com |
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| From: Glenn Petersen | 8/30/2017 6:37:03 AM | | | | | | Another big deal for VMW:
Google and VMware are teaming up with a $2.8 billion startup to get an edge in the cloud wars with Amazon
Matt Weinberger
Business Insider
August 30, 2017
Google Cloud VP Sam Ramji Google
______________________________________
Google may be losing to Amazon in the cloud wars, but the search giant has a not-so-secret weapon — and some brand-new partners — that could help it fight back.
The weapon is something called Kubernetes, a software project that started out as a way for Google to manage its massive server infrastructure and has since become a go-to tool for modern software developers.
The partners are VMware and Pivotal, which is a spin-off of VMware valued at $2.8 billion. Together, the three companies plan to promote Kubernetes to large companies with their own data centers.
The partnership, announced on Tuesday, is centered on Pivotal's new Pivotal Container Service (PKS), which promises to make it effortless for companies to roll out Kubernetes. PKS allows developers build applications that can be easily installed on servers running VMware's software or run in Google's cloud.
Everybody gets something from this deal: Google gets access to VMware's customers, which include many of the world's largest companies. VMware gets to give its customers easy access to Google's cloud, including all of its cutting-edge artificial intelligence services for software developers. And Pivotal gets cozier with both companies.
Package it up
Underlying Kubernetes is a trendy developer technology called software containers that was pioneered by Docker, a $1 billion-plus startup.
Containers are neat metaphorical boxes into which developers can package their software programs. They ensure the applications run in the same way regardless of the computers that are running them, be they laptops, servers, data centers or cloud platforms. Kubernetes is emerging as the most popular way to manage those containers.
"I've never had a single engineer push back on Kubernetes as the container standard for the industry," James Watters, a senior vice president at Pivotal, told Business Insider.
James Watters, a senior vice president at PivotalPivotal Labs
_______________________________________
Kubernetes has become such a smash hit that Google rivals Microsoft and Amazon decided to support the technology in their own clouds. But Google retains an edge with the technology. As the inventor of Kubernetes, Google Cloud has a reputation for being the best home for projects using the software, which it turns out is a lot of them.
PKS lets developers write the code they want to write while, behind the scenes, Kubernetes handles the hard part of managing the containers. Kubernetes simplifies the task of building software that has to run at large scales, which is why Google created it in the first place.
Tying PKS to VMware's offerings will likely prove "attractive both to cloud-native developers and companies with strong investments in [VMware] products and skills," said Dave Bartoletti, an analyst at tech research firm Forrester.
VMWare's partnership with Google and Pivotal was born of simple demand, said Sanjay Poonen, the virtualization software provider's chief operating officer. Companies are looking for ways to use Kubernetes, so VMware went looking for ways to offer the technology, he said.
"We go where our customers are going," Poonen said.
Cloud fronts
The tie-up could help the three partners battle not just Amazon but other cloud players as well.
Google's target: Microsoft, which has long held that its investments in data center products like Windows Server give it an edge in the cloud wars. With PKS, Google will get access to companies that use VMware in their data centers. That could give the search giant a foothold from which it could spread its technology across both the cloud and the data center.
"Somehow, all this stuff should work well together," said Sam Ramji, a vice president of product management at Google. "You're gonna have data centers, and you're gonna have cloud."
VMware COO Sanjay Poonen VMware
_____________________________________
Meanwhile, PKS has its sights set on Docker, which has its own technology to manage containers. With VMware and Google behind it, Pivotal believes that PKS can grab market share from Docker, Watters said.
Finally, VMWare is aiming at Red Hat, its longtime foe. The $17 billion enterprise software company offers OpenShift, an application development platform that's similar in some ways to PKS. With the help of PKS and Google, VMware is hoping it can stem some of OpenShift's growth.
"The three of us are coming for Red Hat," Poonen said.
businessinsider.com |
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| To: Glenn Petersen who wrote (314) | 1/29/2018 4:01:04 PM | | From: Glenn Petersen | | | | Dell is considering a sale to VMware in what may be tech's biggest deal ever
- VMware could buy Dell in massive reverse-merger, sources say. Dell currently owns 80 percent of VMware.
- The deal would give Dell shareholders a way to profit from having taken Dell private in 2013 and help pay off some debt.
- VMware was the crown jewel of Dell's 2015 acquisition of EMC, but the company's business model is under threat as enterprises move to the cloud.
Alex Sherman | @sherman4949
Published 4 Hours Ago Updated 2 Hours Ago CNBC.com
Dell Technologies could emerge as a public company through a reverse-merger with VMware, the $60 billion cloud computing company it already controls, according to people familiar with the matter.
The reverse merger, whereby VMware would actually buy the larger Dell, would then allow Dell to be traded publicly without going through a formal listing. It would also likely be the biggest deal in tech industry history, giving investors who backed Dell's move to go private in 2013 a way to monetize their deal, while helping Dell pay down some of its approximately $50 billion debt.
VMware's stock fell sharply on the news. At midday, it was down 8.5 percent.
While Dell may also pursue a more traditional initial public offering, said the people, a reverse merger would allow the company to avoid a new public offering. Dell hasn't decided on a strategic option and is also considering several other paths forward, including other acquisitions or buying the remaining stake of VMware it doesn't own, as has been previously reported. Dell is unlikely to sell the company outright or sell its stake in VMware, one of the people said.
VMware was seen as the crown jewel in 2015 when Dell acquired EMC for $67 billion. That gave Dell 80 percent of VMware, which was an early pioneer in a technology called virtualization. That process gave companies a way to run the large computers in their data centers more efficiently by packing multiple "virtual" computers on a single piece of hardware.
While the technique is still widely used, VMware's growth prospects have been tempered as companies have moved more of their infrastructure from their own data centers to large cloud providers like Amazon and Microsoft. In 2016, the company agreed to let customers run its software on arch-rival Amazon's cloud service, an admission that the cloud model is taking precedence.
The reverse-merger is one of the more audacious strategic initiatives being looked at by Dell and its advisers, said the people, who asked not to be named because the discussions are private. Dell's board of directors will meet next month to consider a slew of options, many of which are still in the early stages of examination, including the reverse merger.
If VMware were to buy Dell, VMware would issue shares to Michael Dell and Silver Lake, the private owners of Dell. The owners could then sell shares on the public market as a way of monetizing their investment in Dell, the people said.
The exact valuation of Dell isn't known because the company is private. Dell took itself private in a $24.4 billion deal in 2013. It then acquired EMC for $67 billion in 2015, a deal that still stands as the largest technology acquisition of all time.
Theoretically, a VMware acquisition for Dell would top that, making it the largest technology deal ever. Dell acquired more than 80 percent of VMware when it completed its deal for EMC in 2016. VMware's platform virtualization software was a key reason Dell pursued EMC two years ago.
While VMware's revenue has consistently grown each year, that has slowed. Annual sales rose 6.7 percent in 2016 from 2015 after six consecutive years of double-digit percentage growth. Still, net income of $1.2 billion was an all-time high for the company for 2016, and 2017 full-year estimates suggest the company will top that mark.
Spokespeople for Dell and VMware declined to comment.
cnbc.com |
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| From: Glenn Petersen | 4/17/2018 10:01:22 AM | | | | | | VMware shareholders are winning their battle to block Michael Dell's push for a reverse merger (VMW)
Julie Bort
Business Insider
April 16, 2018
Michael Dell
-----------------------------------
-- VMware shares soared on Monday on word that Michael Dell is ready to abandon his reverse merger plan between VMware and Dell Technologies.
-- Shareholders were in open revolt, and Wall Street analysts were openly negative about the prospect of the deal.
-- Employees weren't thrilled either, and neither were VMware's hardware partners that compete with Dell, according to reports.
-- The deal would have been huge, and would have given Dell a non-traditional path to going public again.
VMware shareholders are happy, and the stock is up about 7% over the close of Friday, thanks to rumors that Michael Dell is growing cold on the idea of a reverse merger — a move that would have made Dell a publicly-traded company again, after it went private in 2013 after a $24 billion buyout.
Dell is listening to angry VMware investors and bearish Wall Street analysts who have been saying that this merger is bad for VMware and only good for Dell, multiple news outlets reported on Monday.
For instance, one of VMware largest investors, Jericho Capital Asset Management, was pressuring the VMware board to end discussions, Bloomberg reported last month.
And T. Rowe Price Group, the largest independent shareholder of VMware, also opposed any such deal, it told Barron's last month.
"The proposed Dell-VMW reverse merger has previously drawn public opposition by VMW shareholders, due to the slow-growth, legacy nature of Dell's core business as well as its heavy debt load," Credit Suisse's Brad Zelnick summarized in a research note on Monday.
On top of that, the merger could have crushed VMware's growth by making it impossible for it to maintain its strong partnerships with Dell's long-time hardware rivals, especially Hewlett-Packard Enterprise, CRN's Mark Haranas reported.
As we previously reported, we heard rumblings that employees inside VMware were not too happy about the idea, as well.
All told, the clear threat was that the reverse merger could lead to investor lawsuits, among other issues.
To recap what everyone was so upset about: Michael Dell's company Dell Technologies is currently VMware's largest shareholder. Dell was considering merging with VMware, essentially selling itself to the smaller company. Because VMware is already a publicly-traded company, it would mean Dell would basically go public without the need for an IPO.
That would also mean that VMware shareholders would suddenly be on the hook for all of Dell's $53 billion in debt (much of which it incurred by buying EMC), Zelnick points out, adding that VMware represents about 10% of Dell revenues but over half if its free cash flow. Under the current structure, where VMware remains an independent publicly traded company, Dell cannot lay its hands on that cash.
In fact, in 2016, EMC executives promised that after it merged with Dell, the combined company wouldn't raid VMware's cash and wouldn't harm its long-term ability to do business with its competitors.
VMware declined to comment.
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| From: Glenn Petersen | 8/24/2018 11:54:05 AM | | | | | | The second quarter press release: sec.gov
VMware shares slide despite strong Q2 results
The company reported Q2 revenue of $2.17 billion, uppercent year over year.
By Natalie Gagliordi for Between the Lines |
ZDNet
August 23, 2018 -- 20:32 GMT (13:32 PDT)
VMware released second quarter financial results after the bell on Thursday, beating market estimates. The virtualization giant reported a net income of $644 million, or $1.56 per share. The income includes a gain of $231 million from VMware's investment in Pivotal Software, the company said.
Non-GAAP earnings were $1.54 per share on a revenue of $2.17 billion, up 13 percent year over year. Wall Street was looking for earnings of $1.49 per share with revenue of $2.14 billion.
VMware's license revenue came to $900 million, an increase of 19 percent year over year. Services revenue was $1.2 billion.
In statement, CFO Zane Rowe said the quarter was driven by "strong operational performance across the business. Product license bookings grew double-digits year-over-year in all major product categories."
In terms of guidance, analysts expect VMware to report Q3 earnings of $1.49 per share on revenue of $2.16 billion. Shares of VMware were down almost four percent after hours.
zdnet.com |
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