VMware waiting for Tanzu take-off, tops guidance as customers kick tyres

VMware has posted another quarter of strong financial results and revealed that industry players have started to discuss new possibilities now that the company is not part of Dell.

Revenue for the third quarter was $3.19 billion, an increase of 11 per cent year on year and ahead of the forecast $3.12 billion.

Subscription and SaaS revenue rose 21 per cent year on year, while annual recurring revenue reached $3.3bn. up 25 year over year.

VMware Cloud did well, with hyperscale partners called out as a source of increased sales, and the Carbon Black security products were also singled out for praise.

CEO Raghu Raghuram also asserted that the company's multi-cloud management efforts are bound to bear fruit given the world is heading to hybrid multicloud.

The CEO also said that breaking up with Dell has already seen other player open discussions about how they might work more closely with VMware.

"We are seeing a sense of excitement and possibility from the partners," Raghuram said. "There are partners that are already planning to or starting to staff up on their VMware expertise. We are talking to other partners about what we could do to help them further in the markets where we could have joint solutions."

Also on joint solutions, Raghuram said VMware's ties with AWS are getting even closer, with the two working to "further expand the addressable set of workloads that can be served using our joint solution."

Investment analysts on the call were keen to ask about adoption VMware's flagship vSphere suite now that it integrates the Tanzu container portfolio.

Company president Sumit Dhawan said customers like the idea of managing containers with vSphere, but few are doing it. "From a customer adoption perspective, huge interest, still early stage," he said. Execs were, however, pleased that its Tanzu Community Edition - a free on-ramp to VMware's approach to containers - has been downloaded 10,000 times in five weeks.

Raghuram updated investors on Project Arctic - a plan to offer vSphere as a service - and said it's "still in the very early days." But he added that when it emerges, Arctic will "weave in things like disaster recovery and better security." VMware customers will have less to worry about, the CEO suggested, and VMware will get a nice chance to upsell customers into SaaS.

The CEO also pointed out that Tanzu is VMware's way to ensure it gets a bigger slice of the public cloud, an admission that the company knows cloud native software will mostly be written for containers before long. ®

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