VMware profit plummets

By Kevin McLaughlin on Jul 25, 2012 8:08 AM
Filed under Cloud

Execs hail Nicira deal.

VMware has reported fiscal second quarter results mostly in line with Wall Street's expectations, but ended up being overshadowed by the vendor's $US1.2 billion acquisition of network virtualisation startup Nicira.

VMware's second-quarter net income was $US192 million, or 44 cents a share, down nearly 13 percent from the $US220 million and 51 cents a share it turned in during last year's second quarter.

Excluding items, VMware earned 68 cents per share, while Wall Street analysts polled by Thomson Reuters were expecting 66 cents per share.

Nicira is VMware's most expensive acquisition to date, said CEO Paul Maritz, who is moving over to EMC on Sept. 1 to take the newly created role of chief strategist.

However, Nicira is poised to transform networking in much the same way as VMware has transformed the data center with server virtualisation, Maritz said.

"Our strategy is to be a leader in providing the software ingredient of the software defined data centre," Maritz said. "With Nicira, VMware is well positioned to provide the networking function for other, non-vSphere based pools of infrastructure. This is a deepening and a broadening of our strategy."

VMware will pay $US1 billion in cash and $US210 million of assumed unvested equity awards for Nicira, a startup founded by Stanford University researchers Martin Casado and Nick MeKeown and University of California at Berkeley researcher Scott Shenker.

For its third quarter, VMware is expecting revenue around $US1.1 billion. For fiscal 2012, VMware is expecting revenue of between $US4.5 billion and $US4.6 billion.

This article originally appeared at crn.com

Follow us on Facebook and Twitter

Copyright © 2014 The Channel Company, LLC. All rights reserved.


VMware profit plummets
Top Stories
Buyout for one of Australia's biggest Apple resellers
Investor to roll up $14m MyMac with accessories wholesaler and MSP.
Google and Apple scramble to fix 'Freak' security bug
Google partners already have patch, Apple to release next week.
Lenovo debuts US$149 Windows tablet, two Android models
Ideapad MIIX 300 comes with one year of Office 365.
Sign up to receive CRN email bulletins
As a reseller, my main source of credit is:

Latest Comments
CRN Magazine

Issue: 335 | January/February 2015

CRN Magazine looks in-depth at the emerging issues and developments for the channel, and provides insight, analysis and strategic information to help resellers better run their businesses.