“We have seen a strong start to Q3; we just signed our largest-ever telco deal with Vodafone,” Gelsinger said on VMware’s second quarter fiscal year 2018 earnings conference call. He called the Vodafone deal “a huge step forward in our NFV initiative,” adding that the company has more than 90 NFV wins and is seeing an uptick in deployments.
“And these wins definitely they are vSphere wins, but they also include…key components of NSX [and] our management products,” he said.
VSphere is the company’s compute platform; NSX is its network virtualization technology.
Also on the call Gelsinger lauded the company’s second quarter results. VMware revenue for the quarter reached $1.90 billion, an increase of 12.2 percent from the second quarter of 2016. Non-GAAP net income was $489 million, or $1.19 per diluted share, up 22 percent year-over-year.
This wasn’t a surprise. Last week VMware pre-reported better-than-expected earnings and said it expected second-quarter revenue to be between $1.89 billion and $1.90 billion.
The Vodafone NFV deal, however, was a surprise.
It could be related to Vodafone’s Project Ocean, which Vodafone has been relatively secretive about, or the service provider’s 5G plans.
Project Ocean is Vodafone’s program to virtualize its network and compute infrastructure and to use cloud technology. The service provider hasn’t said much about it but earlier this year Nokia and Mirantis said they were involved.
Nokia said its Nuage Networks business unit will be the supplier of software-defined networking (SDN) for all of Vodafone’s data centers. And Mirantis said it will provide OpenStack-based virtualization infrastructure management (VIM).
Last year, the company announced a partnership with Amazon Web Services (AWS) to develop VMware Cloud on AWS. The joint service lets customers run their vSphere private clouds from VMware alongside their applications in AWS’s public cloud.
The AWS partnership promises to be a hot topic at this year’s VMworld conference taking place next week. Some investors pressed Gelsinger for more details about it on the earnings call.
Gelsinger said the partners will expand the joint service globally and add capabilities. “It really is a start of a rich roadmap of joint innovations that we will be seeing with AWS.”
Versus Azure Stack
VMware Cloud on AWS is about “allowing VMware customers to seamlessly go to the cloud and take advantage of a cloud service is the full VMware experience,” he said. It gives customers the “ability for a strong installed base of VMware to seamlessly extend their position to the AWS environment as well as to be able to consume additional AWS services in a very effective manner.”
The Azure Stack, on the other hand, brings Microsoft’s cloud on premise. “We believe that is a harder thing for customers to consume versus the elegance of what we’re laying out in our AWS strategy,” Gelsinger said.