VMware (NYSE:VMW) announced its Q2 earnings on July 23 which showed the effect of a growing virtualization demand. It reported a 22 percent y-o-y revenue growth which came in at $1.12 billion. Free cash flows were up 29 percent y-o-y at $2.01 billion. U.S and international revenues grew 22 percent y-o-y to $551 million and $572 million respectively. Enterprise license revenues experienced a growth of nearly 30 percent y-o-y and license revenues came in at $517 million and services revenue was $605 million. It also announced the acquisition of Nicira, a virtual networking business for $1.26 billion. 
Outlook For 2012 – BIG Data And BYOD
- VMware Earnings: Hybrid Cloud, End-User Computing Services Drive Top-Line Growth
- How Has VMware’s Revenue & EBITDA Composition Changed Over The Last Five Years?
- What Will VMware’s Revenue And EBITDA Look Like In 5 Years?
- Software Licenses & Maintenance: What’s VMware’s Revenue & Earnings Breakdown?
- What’s VMware’s Fundamental Value Based On Expected 2016 Results?
- Why We Revised Our Price Estimate For VMware To $74
The bring-your-own-device (BYOD) revolution is led by VMware with its View Mobile Secure Desktop. It provides a safe and secure environment for mobile virtualization by providing secure snapshots of the desktop which can be monitored and controlled by IT departments. It has an efficient hybrid storage mechanism which combines Flash and legacy storage to provide speed as well as cost efficiency.
Cetas, a Big Data analytics company, was recently acquired by VMware. The Cetas software is designed to run on virtual resources like Amazon Web Services and VMware’s vSphere, making it easier to scale and cheaper to use. This acquisition makes sense for VMware as its applications that are deployed on the vSphere provide another opportunity to cross-sell. This cost efficiency and an Analytics-as-a-service model will open up the market for small and medium enterprises, satisfying an unmet need in the analytics space.
We have a $112 Trefis price estimate for VMware, which is ~25% above the current market price.Notes: