Once again VMware bested COVID-19 and posted quarterly results that beat Wall Street’s expectations. And it’s sending Tanzu, VMware’s Kubernetes platform, into space per an eight-figure deal with the U.S. Space Force.
“The United States Space Force has recently committed to the Tanzu platform to help deliver a continuous DevOps environment with increased velocity and agility,” said VMware CEO Pat Gelsinger on his company’s second-quarter fiscal 2021 earnings call today. Later, during the question and answer part of the call, Gelsinger noted that the U.S. Space Force made an “eight-figure commitment to the Tanzu platform.”
VMware’s overall revenue for the quarter hit $2.88 billion, a 9% year-over-year increase, boosted largely by subscription and software-as-a-service (SaaS) revenue growth. The combination of subscription and SaaS license revenue grew 11% year over year to $1.35 billion. And total subscription and SasS revenue for the second quarter was $631 million, a 44% increase from a year ago. Subscription and SaaS revenue now represents 22% of VMware’s total revenue.
“And we expect our momentum to continue,” Gelsinger said, touting VMware’s SaaS strength. “Stay tuned to hear more about SaaS announcements at VMworld in September.
VMware Cloud on AWS is one of these SaaS offerings, and for a second consecutive quarter Gelsinger said it saw triple-digit growth year over year. Although VMware and Amazon Web Services announced the initial availability of their hybrid cloud service three years ago, VMware’s Q1 fiscal 2021 earnings call was the first time that VMware provided any insight into that product’s growth. However, executives have yet to provide a specific customer count or revenue amount for VMware Cloud on AWS.
Tanzu Exceeds Expectations
While VMware also didn’t put a specific number on Tanzu sales, Gelsinger said the company “did exceed our overall bookings for Tanzu in the quarter.” He noted VMware’s Daimler customer win — one of its largest Q2 deals, included VMware Cloud Foundation plus Tanzu.
“There’s a marked increase from customers, and interest in app monetization,” Gelsinger said. “And as they move their Kubernetes project from this original phase of developers playing around with it into the enterprise production phase, the value proposition of VMware is starting to really materialize.”
Another big Q2 customer win — Dish Network — also included Tanzu, Gelsinger said. Under this deal, announced in July, VMware will supply its Telco Cloud platform to support Dish’s burgeoning 5G network plans. The carrier will use that platform as an abstraction layer running across multiple network domains and will allow Dish to tap into hyperscale public cloud capacity while maintaining core control points.
Gelsinger also noted VMware’s 5G aspirations on the Q2 call today. “We view the VMware Telco Cloud as the software operating system for 5G and beyond, and our momentum in the last quarter shows the industry is agreeing,” he said. “We are excited to be partnering with Dish to bring 5G speed and performance to the majority of the U.S. population with the world’s first open radio access network offering. With VMware, the new software defined cloud native 5g network will be equipped to deploy new services in a cost-effective manner with great agility.”