VMware's NSX, VSAN Sales Surge In Q2, CEO Gelsinger Bullish On Dell-EMC Deal Impact

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VMware said Monday its software-defined data center technologies, particularly its NSX software-defined networking and VSAN software-defined storage, helped it beat Wall Street's profit and revenue forecast during its fiscal second quarter. 

Excluding items, VMware reported earnings of 97 cents a share and revenue of $1.69 billion. Wall Street analysts had forecast 95 cents a share and revenue of $1.68 billion. VMware shares jumped more than 9 percent to 68.26 in after-hours trading. 

VMware CEO Pat Gelsinger said during the vendor's earnings call that Dell's pending acquisition of EMC -- the majority stakeholder in VMware -- is expected to quickly expand its business.

Gelsinger said NSX and VSAN are appealing to a broader range of customers that are looking to run, deploy, and manage more applications in the cloud.

[Related: What Will A Merged Dell-EMC Look Like?]

"The rock stars of Q2 were NSX and VSAN. … We see nothing changing in the second half," Gelsinger said on the call.

NSX license sales more than doubled in the second quarter of 2016 year-over-year and VMware now has more than 1,700 customers using the technology, Gelsinger said.

NSX revenue should continue to grow as VMware continues to see positive early results from new SKUs targeting midmarket customers, according to Gelsinger. 

"These new SKUs are designed to help us reach into the mid-market. … These are also a way to reach more into the channel," Gelsinger said.

VSAN revenue also more than doubled over last year, and over 5,000 customers are now using the technology compared to 3,500 customers last quarter, said Gelsinger.

Zane Rowe, VMware chief financial officer, said his company also saw hybrid cloud and SaaS revenue grow by strong double digits over last year's quarter, accounting for about 8 percent of total revenue.

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