Enterprise Adoption Rate of VMware's Cloud Technology and Software Quite Promising...

A pioneering name in the field of Virtualization software and services, VMware has reported strong earnings in the second quarter. Moreover, with the company's software-defined networking product's license bookings being doubled, its revenue forecast for the remaining year went up too.

As per VMware's officials, the total number of customers for SDN software NSX reached to 1,700. It was not just the SDN software that emerged in popularity among enterprises but the company's technology for hyper-converged systems did a great job too. VMware's Virtual SAN (vSAN) and VxRail has also seen a new high.

The company's officials also disclosed that the product's bookings had tripled which was a good sign.

How Good the Performance Has Been for VMware in Real?

The product that actually made VMware a start in the quarter came out to be Virtual SAN (vSAN). What drove the company's revenue so fast was indeed the willingness of enterprises to take the available high-end technology into production. VMware signed hefty deals during the period, especially with healthcare and midmarket enterprises.

VMware also reportedly gained double-digit revenue growth in its major software-as-a-service products including AirWatch, vRealize as a Service and Desktop as a Service. Besides that, similar growth was witnessed in infrastructure products for hybrid clouds including -

·         vCloud Air

·         vCloud Air Network

8 percent of the overall revenue for VMware came from SaaS and Hybrid Cloud products. Overall revenue rose by 11 percent to reach $1.69 billion. The company also reported 54 percent increase in net income, taking the figures to $265 million.

How VMware Takes this Growth in Business?

While products like SDN, vSAN and VxRail saw a huge demand from enterprises, older virtualization products' sales figures kept going down. VMware seems quite confident about the success of its newer products.

As far as handling the concern of declining sales of older virtualization products is concerned, VMware has an entirely unique strategy for the same. The company considers it vital to attain better progress in new product areas if declining sales of its traditional server virtualization technology is to be countered with great success.

This move would not only help tackle the issue of sales but also would showcase VMware's capability to enter growth markets successfully.

Pat Gelsinger, VMware's CEO, said in a teleconference that VMware has reached that particular point where enterprise customers now feel comfortable enough in moving to starting production in Cloud. In the remaining half of the year, the company is expecting faster, more bookings of its new products so as to counter the degrading sales of traditional server virtualization software.

For the second half of the year, VMware has forecasted revenues in between $6.95 billion to $7.05 billion. The company's CEO though is moreover expecting the same level of growth in new product areas in the second half.