https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Technology Solutions Brokerages
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
  • MSP 501
    • Back
    • 2022 MSP 501 Rankings
    • 2022 NextGen 101 Rankings
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
  • Channel Futures TV
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
  • Resources
    • Back
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Advertise
    • 2022 Editorial Calendar
  • Awards
    • Back
    • 2022 MSP 501
    • Channel Influencers
    • Circle of Excellence
    • DE&I 101
    • Channel Partners 101 (CP 101)
  • Events
    • Back
    • CP Conference & Expo
    • MSP Summit
    • Channel Partners Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • About Us
  • DE&I
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Technology Solutions Brokerages
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
  • MSP 501
    • Back
    • 2022 MSP 501 Rankings
    • 2022 NextGen 101 Rankings
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
  • Channel Futures TV
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
  • Resources
    • Back
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Advertise
    • 2022 Editorial Calendar
  • Awards
    • Back
    • 2022 MSP 501
    • Channel Influencers
    • Circle of Excellence
    • DE&I 101
    • Channel Partners 101 (CP 101)
  • Events
    • Back
    • CP Conference & Expo
    • MSP Summit
    • Channel Partners Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • About Us
  • DE&I
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Agents
  • Cloud Service Providers
  • Channel Partners Events
 Channel Futures

Cloud


Shutterstock

SaaS Cloud connections

Fewer VMware SaaS Subscriptions Linked to Perpetual Horizon VDI Licenses

  • Written by Jeffrey Schwartz
  • August 30, 2021
Newly promoted CEO Raghu Raghuram remains bullish on the overall shift to SaaS and subscriptions.

VMware SaaS subscription growth has taken a slight hit, as some of its customers continue to stick with perpetual licenses. To be sure, VMware subscription and SaaS revenues are growing at a healthy rate. But the growth rate was marginally less than the company had anticipated during its most recent fiscal quarter.

A key culprit was VMware Horizon, the company’s VDI offering. During its second quarter (FY22) earnings report late last week, VMware said subscription and SaaS revenues of $762 million rose 23% year-over-year. Also, during the quarter that ended July 30, annual recurring revenue (ARR) of $3.2 billion rose 26%. Nevertheless, perpetual license sales of $738 million were 3% higher over the same period last year, higher than expected.

VMware's Zane Rowe

VMware’s Zane Rowe

“We were expecting a few more customers to lean into to the sub and SaaS part of that portfolio, versus the term license,” VMware CFO Zane Rowe said during the company’s earnings webcast. “For a variety of reasons, they chose term, which on the margin actually did impact our split between sub and SaaS and on-prem,” he said.

Overall, VMware revenues of $3.14 billion, which were 9% higher than the same period last year, beat expectations. But concerns about the subscription growth initially sent VMware’s share down 5%. While fewer VMware Horizon deals were subscription-based than expected, Rowe indicated the pandemic was not a weighing factor.

Rowe said VMware was pleased with Horizon’s performance, along with its entire end-user computing (EUC) portfolio, including Workspace One.

“It’s just that the mix, if you will, within those products shifted a little bit more to term than we had expected originally,” he added.

VMware is aggressively adding new cloud management capability to VMware Horizon and Workspace One. Earlier this month, the company announced that all of its VMware Horizon Control Plane services, primarily offered on VMware Cloud for AWS, are also now available with connectivity to Microsoft Azure. VMware Horizon Control Plane services are an extension of the Horizon Control Plane. They enable desktop as a service (DaaS) connected to multiple on-premises and cloud backends.

Bullish on Shift to Subscriptions

VMware expects the rate of growth of its SaaS subscriptions during its second quarter to continue this quarter. In certain geographies and vertical industries, some customers still prefer perpetual licenses over subscriptions, according to VMware CEO Raghu Raghuram. VMware still anticipates a growing share of its customers will continue to prefer subscriptions and SaaS, Raghuram said. VMware has stated its intent to accelerate its shift from perpetual license to subscriptions. At the same time, Raghuram emphasized that VMware will provide its software as customers want it.

VMware's Raghu Raghuram

VMware’s Raghu Raghuram

“If you look out over the next year or so, we are very bullish about our overall subscription and SaaS portfolio,” Raghuram said. “This is a big focus of mine. And if you look at most of our recent products and innovations, they’ve all come to market with a subscription and SaaS business model, and that will continue. In addition, we are checking all of our existing perpetual license software products and making them also available in a subscription and SaaS business model.”

Raghuram, who became VMware’s CEO on June 1 after predecessor Pat Gelsinger taking the helm at Intel, said that work is underway with products including vSphere, its hyperconverged infrastructure (HCI) product line and NSX. “As we do that, we will be strengthening our subscription and SaaS go-to-market mechanisms. Over the next year, I actually expect our subscription and SaaS business growth to accelerate.”

Divestiture from Dell Technologies on Pace

The planned divestiture of VMware from Dell Technologies is on pace to close in early November, both companies confirmed. Dell announced plans to spin-off its 81% stake in VMware back in April. The move will help shave nearly $10 billion of debt from Dell’s balance sheet. Dell said the spinoff will help accelerate its focus on hybrid cloud, edge, 5G, telecommunications and data management. As a standalone company, Raghuram said he believes VMware has an opportunity to grow faster.

“We will have increased strategic operational and financial flexibility to drive VMware growth strategy, while also strengthening our longstanding strategic relationship with Dell,” Raghuram said. “The partnership, we expect. will continue to benefit our customers and partners as well as both Dell and VMware.”

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Jeffrey Schwartz or connect with him on LinkedIn.

 

Tags: Cloud Service Providers MSPs Cloud Desktop Mergers and Acquisitions Technologies Vertical Markets

Most Recent


  • Black Hat expo hall 2022
    The Gately Report: Black Hat USA Edition with Cisco, IBM, CISA, More
    Black Hat USA has come roaring back since the COVID-19 pandemic.
  • Making Waves
    7 Channel People Making Waves This Week at Microsoft, Rackspace, RingCentral, Avaya
    Hackers targeted one UCaaS firm by impersonating the company's IT department.
  • Hired
    Former CenturyLink, Spearhead Channel Leader Joins Equinix
    Equinix conducted about 30% of its business through partners a year ago and has vowed to increase that number.
  • Welcome Mat
    Okta Names Splunk Vet New Global Channel Chief
    Okta's global channel chief left the company in June.

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Word subscribe on a computer monitor
    Aveva Pushes Ahead with Subscription Strategy
  • Out and In doors
    Jenni Flinders Now Heading NetApp Partner Programs as Chris Lamborn Departs
  • money
    $75 Million Corelight Funding Round Includes CrowdStrike Investment
  • Top stories megaphone
    Top Stories in August: Lumen, AWS, Microsoft, T-Mobile, Ransomware

Upcoming Events

View all

MSP Summit

September 13, 2022 - September 16, 2022

Channel Partners Conference & Expo

May 1, 2023 - May 4, 2023

Galleries

View all

The Gately Report: Black Hat USA Edition with Cisco, IBM, CISA, More

August 12, 2022

7 Channel People Making Waves This Week at Microsoft, Rackspace, RingCentral, Avaya

August 12, 2022

Oracle Cloud & AT&T, AWS Lead Cloud News Roundup

August 12, 2022

Industry Perspectives

View all

How to Take Shared Responsibility for Securing Cloud

August 11, 2022

Seize the Application Modernization Opportunity

August 2, 2022

A Growth Mindset: Your Organization’s Strategic Differentiator

August 1, 2022

Webinars

View all

Outsmarting RaaS: Implementation Strategies To Help Your Clients Before, During, and After a Ransomware Attack

August 23, 2022

Why it is Important to Upgrade Aging Servers and How to use Live Optics to Upgrade Efficiently

August 25, 2022

Executives at Home are Not Alright: An Intro to Digital Executive Protection

September 8, 2022

White Papers

View all

Work Goes Remote – (and Other Top ITOps Trends)

May 25, 2022

The New Bottom Line: How MSPs Can Meet the Healthcare Crisis While Evolving Their Businesses

April 19, 2022

How to build a Security Operations Center (on a budget)

April 4, 2022

Channel Futures TV

View all

ThreatLocker Preaches Zero Trust, Addresses Industry Competition

ScienceLogic Debuts New Partner Portal

August 9, 2022

Vonage a ‘Single Communications Stack Provider’ for Partners, Customers

June 27, 2022

IBM, Partners and the $1 Trillion Hybrid Cloud Opportunity

June 26, 2022

Twitter

ChannelFutures

.@splunk vet Bill Hustad named @Okta's new #channelchief. dlvr.it/SWXmws https://t.co/ILQesul0Cz

August 12, 2022
ChannelFutures

The Gately Report: #BHUSA edition with @Hacker0x01, @Cisco, @SaltSecurity, @CISAgov, @ExtraHop, @IBMSecurity, more.… twitter.com/i/web/status/1…

August 12, 2022
ChannelFutures

Channel People Making Waves Include: @kencarnesi, @szebenisz, @vasujakkal, @brettsmith52, @DaveMichels… twitter.com/i/web/status/1…

August 12, 2022
ChannelFutures

Nancy Henriquez, VP of Sales & Marketing at MSP 501 award-winning @synetek, touches on the importance of gathering… twitter.com/i/web/status/1…

August 12, 2022
ChannelFutures

.@Equinix's new hire is a familiar face in the telco channel. dlvr.it/SWXV6v https://t.co/jIg0LrZ4DO

August 12, 2022
ChannelFutures

Missed the news this week from @OracleCloud and @ATTBusiness? We've got it here. Plus, news from @AWSCloud and… twitter.com/i/web/status/1…

August 12, 2022
ChannelFutures

Huge channel-impacting acquisitions in the past month. We've got details on @IBM, @nokia, @GoTo, @EnsonoIT,… twitter.com/i/web/status/1…

August 12, 2022
ChannelFutures

Boost privacy by design with #shiftleft mindset and add #security to cloud deployments from start, says… twitter.com/i/web/status/1…

August 12, 2022

MSP 501

The industry's largest and most comprehensive partner awards program.

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Galleries

Educational slide shows and images from live events.

Media Kit And Advertising

Want to reach our audience? Access our media kit.

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Events
  • Telecoms.com
  • MSP 501
  • Black Hat
  • IoT World Today
  • Omdia

WORKING WITH US

  • Contact
  • About Us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2022 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X