VMware reports big data centre services growth for the year

VMware SDDC business

Both the software defined data centre champion and its parent Dell have posted their full year results, and it’s a mixed bag overall.

Data centre systems firm VMware saw it annual revenues top the $10bn for the first time on the back of a number of acquisitions in the last year.

Sales at VMware were up 12% to $10.9bn, with big contributions from the acquired Pivotal and Carbon Black, along with those from Intrinsic, Veriflow, Uhana, Bitfusion.io, AVI Networks, Bitnami and AetherPal. Pivotal was acquired from VMware’s parent company Dell Technologies last year, which reported its results at the same time (see below).

VMware has created a new subscription and SaaS revenue reporting line in its results, which covers as-a-service offerings from the VMware Cloud Provider Program, VMware Cloud on AWS, Pivotal, Carbon Black, CloudHealth Technologies, VeloCloud, Horizon Cloud, Wavefront and AppDefense. And this business is said to have grown an impressive 44% annually to $1.9bn.

Reported sales of on-premise software licenses were up 4.6% year-on-year to $3.2bn, but overall services revenue – including ongoing support and maintenance – grew a much higher 8.6% to $5.8bn.

VMware issued guidance for its FY21 revenue, saying it will top $12bn.

Earlier this month, VMware appointed Sylvain Cazard as its new vice president for Central EMEA, succeeding Luigi Freguia. Freguia’s promotion to general manager and senior vice president for EMEA was announced in November 2019.

Cazard previously led VMware’s software-defined data centre business (SDDC) for two years, following three years as country manager for France and several years managing global accounts. He will now be responsible for driving business growth, sales and operations across Germany, Austria, Switzerland, Russia/CIS countries, Israel and Eastern Europe.

Nick Cross took over Cazard’s role as SDDC leader for EMEA. He was previously leader of VMware’s EMEA HCI (hyperconverged infrastructure) team.

VMware parent Dell Technologies reported record full year revenue for the year ended 31 January 2020, but declining infrastructure sales and a modest overall sales forecast going forward hit its stock price.

There was a 5% fall in the share price after extended trading yesterday. In the fourth quarter, sales were up 1% to $24bn year-on-year and the full-year revenue went up 2% to $92.2bn.

Infrastructure Solutions Group revenue was down 7% year-on-year to $34bn, with servers and networking revenue declining 14% to $17.1bn and storage revenue flat at $16.8bn.

The firm’s Client Solutions Group revenue was up 6% to $45.8bn. Revenue for Dell’s other businesses – Secureworks, the offloaded RSA Security, Virtustream and Boomi – was up 7% to $1.8bn. Earlier this month, Dell sold RSA Security for $2.1bn to a consortium led by Symphony Technology Group, Ontario Teachers’ Pension Plan Board and AlpInvest Partners.

During the quarter, Dell generated an operating income of $717m, up from $331m in the same quarter last year. And for the full year, operating income jumped to $2.6bn, from a loss of $191m in FY19.

Dell is expecting FY21 revenue to be between $91.8bn and $94.8bn, with operating income of $3.4bn to $4bn.

But this guidance does not factor in any potential impact from the COVID-19 virus. The likes of Schneider Electric, Apple, Samsung and Microsoft have already reported lower sales since the virus spread across China affecting supply chains, and reported illnesses started to mushroom internationally.