October 18, 2011
VMware and IBM both announced quarterly earnings on Oct. 17. Wall Street was a bit disappointed with IBM’s growth projections, while investors are still digesting VMware’s longer-term outlook. But take a closer look, and you’ll find IBM and VMware both talking about growing cloud computing demand.
Let’s start with the official numbers.
VMware’s Q3 revenues grew 32 percent to $942 million. Also, VMware Q3 net income was $178 million, up sharply from $85 million in Q3 2010. But Wall Street has mixed opinions about VMware’s Q4 revenue forecast, which is about $1.03 billion to $1.06 billion.
IBM said Q3 revenues were $26.2 billion, up 8 percent from Q3 2010. Also, IBM Q3 2011 net income was $3.8 billion, up 7 percent from Q3 2010. But Wall Street is concerned about IBM’s top-line revenue growth, and IBM shares are down about 5 percent today (Oct. 18, 2011).
For cloud services providers, the more important news involves cloud-centric revenues from IBM and VMware. In both cases, the news sounded good.
Noted VMware CEO Paul Maritz in a prepared statement: “I’m pleased with another solid quarter for VMware illustrated by progress with new products, growth across our portfolio and a growing community. We are becoming a significant partner to businesses moving to the cloud.
Highlights for the quarter, according to VMware, include the launch of the VMware Cloud Foundry PaaS offering and the unveiling of the VMware vSphere 5 cloud infrastructure solution product line. In other words, VMware is seriously building out its cloud business, with no intention of stopping any time soon.
Meanwhile, IBM said its cloud revenue (Q1 through Q3 2011) has doubled vs. full-year cloud revenue for 2010. IBM didn’t say which specific products and services fit in the cloud revenue bucket. But the 100 percent growth — in three quarters of 2011 vs. four quarters of 2010 — certainly sounds impressive.
Talkin’ Cloud will continue to analyze cloud-related revenues when we update the Talkin’ Cloud Stocks Index after U.S. markets close on Friday, October 21.
Additional insights from Joe Panettieri.
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