VMware Reports Strong 2016 Growth and Dismisses HPE Threat, but Needs a Plan to Protect New Businesses

C. Drake

Summary Bullets:

• VMware has emphasized the importance of emerging businesses such as hybrid cloud and hyper-converged infrastructure to its 2016 revenue performance.
• In order to safeguard future growth, VMware must pay attention to the rapidly changing competitive dynamics within these emerging business segments.

Presenting his company’s Q4 and full-year results for 2016, VMware CFO Zane Rowe noted the important contribution of emerging businesses such as hybrid cloud and hyper-converged infrastructure (HCI) to VMware’s overall performance. In Q4, hybrid cloud and SaaS revenue – a category that includes vCloud Air and SaaS offerings such as vRealize as a Service – experienced double-digit growth and accounted for 8% of total revenue. VMware has emphasized the importance of its Cross-Cloud Services initiative – commercially availability in mid-2017 – for the future of its hybrid cloud strategy. Another key element of this strategy is Cloud Foundation, a software-defined data center platform based on NSX, vSphere and vSAN for building private clouds and extending them to the public cloud.