NSX and VSAN were “the rock stars of Q2” as VMware beat earnings expectations and increased its forecast for the rest of 2016, CEO Pat Gelsinger said today.
The sunny outlook, announced alongside second-quarter earnings, indicate VMware might be successfully riding the “secular shift” to the cloud, as then-COO Carl Eschenbach phrased it last fall. The changes involve greater use of public clouds and open source software, two trends that weigh on the IT industry as a whole.
NSX licenses doubled during the second quarter, with customers for the network virtualization platform now numbering 1,700, Gelsinger said on today’s earnings call.
VSAN, the company’s software-defined storage platform, gained 1,500 customers during the quarter, bringing it to 5,000, Gelsinger said.
Bookings for VSAN and VxRail both doubled year-over-year during the quarter, Gelsinger said. VxRail is VMware’s hyperconverged infrastructure platform; it’s being resold by Dell, which is about to close its acquisition of VMware parent EMC.
VMware also benefitted from its older businesses. The company has been assuming that its server virtualization business will continue to decline, but that decline is happening more slowly than expected.
A Friend in IBM
To demonstrate VMware’s successful transition to a cloud business, Gelsinger cited a couple of deals with undisclosed customers. One was a “top financial institution” moving 40 percent of its workloads to IBM SoftLayer, a cloud offering that uses VMware’s entire stack for the software-defined data center (SDDC).
VMware also happened to announce a new NSX customer today: Kuwait National Petroleum Company (KNPC), which plans to use NSX and the vRealize suite to help move IT to the cloud. KNPC eventually hopes to use that cloud to offer infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) to its sister companies.
For its second quarter, which ended June 30, VMware reported revenues of $1.69 billion and net income of $265 million, or 62 cents per share.
Those numbers compare with revenues of $1.52 billion and net income of $172 million, or 40 cents per share, for the year-ago quarter.
Non-GAAP net income of 97 cents per share beat the consensus analyst estimate by 2 cents, according to Thomson Financial.
VMware shares were up 9 percent at $68.20 in after-hours trading.
EMC’s Last Call
The other big news at VMware this week is that the final stage of the Dell acquisition will occur. EMC shareholders will vote on the deal in a special meeting tomorrow.
EMC likewise reported earnings this afternoon, without an accompanying conference call for analysts.
For its second quarter, which ended June 30, EMC reported revenues of $6.02 billion and net income of $581 million, or 29 cents per share. Those numbers are up slightly from last year’s second-quarter revenues of $6 billion and net income of $487 million, or 25 cents per share.
EMC’s non-GAAP earnings of 45 cents per share beat analysts’ expectations by 3 cents. The company’s shares rose 2 percent to $28.10 after-hours.
