VMware Fires On All Cylinders: NSX, vSAN, Compute Add To Growth While AWS, VeloCloud Opportunities Take Shape


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VMware's business is growing thanks to innovation in its cloud and software-defined product strategies, but the company is only getting started, CEO Pat Gelsinger told investors on Thursday.

The company in its third fiscal quarter 2018 saw growth across the board in its NSX software-defined networking and vSAN software-defined storage businesses, and even in its flagship vSphere compute business as clients look to merge on-premises and cloud environments, Gelsinger told investors on the VMware earnings conference call.

The expansion will continue as businesses adopt new technologies, including the company's VMware Cloud on AWS strategic relationship with Amazon Web Services and capitalizes on its planned acquisition of VeloCloud Networks, he said.

[Related: VMware, Pivotal Intro Pivotal Container Service, Partner With Google Cloud To Bring Kubernetes Containers To Enterprises]

"Our strategy to transition from a compute virtualization company to providing a broad portfolio of products and services across cloud, mobile, networking, and security, is proving successful as we continue to drive forward with our plans," Gelsinger said.

The CEO said VMware had moved quickly to expand its VMware Cloud on AWS with new hybrid cloud capabilities, disaster recovery services, and an expansion to its second AWS availability zone, all of which will make it more suitable for enterprise production environments.

"We expect production use cases to ramp quickly as we move forward," he said.

Gelsinger said that revenue stemming from its new AWS relationship would not be material for fiscal 2018 or fiscal 2019. However, he said, the cloud, in general, will help drive the company's revenue going forward.

That relationship will also drive VMware's on-premises revenue as well, Gelsinger said. He said it is rare today to find an enterprise customer without at least some AWS experimentation. At the same time, VMware is used by nearly 100 percent of enterprises.

As a result, VMware Cloud on AWS would allow customers flexibility in investing n both on-premises and cloud environments, he said.

Even as cloud opportunities are on the horizon, newer technologies like IoT and edge computing are likely to bring many compute applications back from the cloud to on-premises infrastructures where they can be handled more quickly than moving the data to the cloud for processing, Gelsinger said.

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