VMware on Tuesday reported a slight drop in third fiscal quarter 2012 income despite enjoying record revenue and non-GAAP income for the quarter.

At the same time, the cloud and virtualization technology leader expects continued growth to come thanks to a couple of key acquisitions that it expects to help it be a leader in the development of software-defined data centers going forward.

VMware also used the release of its third quarter 2012 financial results to unveil the hiring of Jonathan Chadwick as its new CFO. Chadwick, who will officially take the CFO spot on Nov. 5, most recently served as corporate vice president of arch-rival Microsoft and CFO of Skype, which Microsoft acquired.

[Related: Analysis: Nicira Buy To Bring VMware Closer To OpenStack, Networking Vendors]

VMware reported revenue for the third quarter of $1.13 billion, up 20 percent from the $942 million it reported for its third fiscal 2011 quarter.

Nearly half the total revenue, or about $554 million, came in the U.S., which was up about 25 percent over last year.

Revenue from license sales hit $491 million for the quarter, up about 11 percent over last year, while services revenue rose about 29 percent during the same period to $643 million.

Carl Eschenbach, chief operating officer and co-president of VMware, said a big feature of the third quarter was the $1.2 billion VMware invested in acquiring software-defined networking (SDN) startup Nicira and its acquisition of DynamicOps, a developer of management software for provisioning apps and services across heterogeneous cloud infrastructures.

The idea of the software-defined data center has emerged as the clear winner in terms of data center development going forward, Eschenbach said.

"The excitement around Nicira validates our approach to the software-defined data center," he said.

For VMware, that spells growing strength for its vCloud Suite of software for building and managing a complete cloud infrastructure, as well as its Cloud Operations Services for helping customers transform their IT infrastructures into cloud infrastructures, Eschenbach said.

"The response to vCloud Suite and Cloud Ops from both partners and customers has been encouraging," he said.

VMware CEO Pat Gelsinger said vCloud Suite is VMware's first implementation of the Nicira SDN technology, giving his company a big opportunity to expand its reach into customers' public, private and hybrid clouds.

"We are the company customers increasingly turn to for help for transforming their IT to the cloud," Gelsinger said.

NEXT: Looking Behind To vRAM, Ahead To 2013

During the question and answer period following the conference call with analysts to discuss the third-quarter financials, VMware's Eschenbach said that VMware's ending of its short-lived vRAM licensing scheme and returning to its previous CPU-based licensing model was welcomed by both channel partners and customers.

Channel partners said the reinstatement of the CPU-based licensing model removed a big sales barrier in the third and fourth quarters of 2012, while customers prefer the CPU-based model because of the simplification versus the vRAM model, he said.

When asked about the potential threat to VMware by the expected release of System Center 2012 by rival Microsoft, Eschenbach dismissed any concerns by saying that it has yet to reach the market and that the global economic environment is the main factor going forward.

"While Microsoft is coming to market with a new platform, it should be called out that this is the third time in seven years that Microsoft has come to market with a 'good enough' product," he said.

Looking forward, Eschenbach expects VMware's fourth quarter 2012 revenue of between $1.26 billion and $1.29 billion, or up between 19 percent and 22 percent over the fourth quarter of 2011. That includes a 14-percent to 18-percent rise in license revenue to between $587 million and $605 million.

For all of 2012, VMware is maintaining the midpoint of its previous guidance by calling for total revenue of $4.572 billion to $4.602 billion, or up between 21.4 percent and 22.2 percent over 2011, Eschenbach said. Licensing revenue for 2012 is expected to be up from 12.8 percent to 13.8 percent over 2011 because of a seasonably strong fourth quarter, he said.

PUBLISHED OCT. 23, 2012