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VMware on Tuesday said increased demand for services combined with greater-than-expected IT spending propelled strong revenue and income growth during its first fiscal quarter of 2010.
The company also said it was able to maintain price discipline despite aggressive competition from unnamed rivals.
VMware reported revenue for its first quarter of 2010 of $634 million, up 35 percent over the $470 million the company reported for the same period in 2009.
The company also reported a profit of $78 million, or 19 cents per share, up from $70 million, or 18 cents per share, last year.
Revenue from the U.S. market was $317 million, up about 30 percent over last year compared to a 40 percent increase in non-U.S. revenue.
VMware reported strong growth in both license and services revenue. License revenue was up 21.4 percent over the same period last year, while services revenue was up by 50.1 percent, led by a 52.1 percent increase in maintenance revenue.
As a result, services revenue accounted for 50.7 percent of total revenue, VMware reported.
Mark Peek, VMware CFO, said the company was able to maintain strong price discipline during the quarter, keeping prices similar to what they were in 2009.
The ability to grow without discounting prices beyond the norm indicates the importance customers placed on the company's technology as a base on which to build private clouds, Peek said.
"The message from our customers is, cloud computing is not a destination. It is an architecture," he said.