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VMware (VMW): Second-Quarter 2008 Results (Updated)

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VMware reported its second-quarter 2008 results today, with an earnings conference call which was followed closely after the abrupt removal of Diane Greene two weeks ago (see our ‘the week after‘ post too for reference). Don’t feel too bad for her, we’ve just reported on her potential payout, which could be well over $50 million USD.

These are the results that were just announced, in bullet points:

  • Net income of $52.4 million, or 13 cents a share, compared with $34.2 million, or 10 cents a share, a year earlier.
  • Revenues for the second quarter were $456 million, an increase of 54% from the second quarter of 2007. Update: this is below Wall Street analysts expectations and estimates, who projected $458,6 to 460 million in revenue – (which the company also projected in April but revised later on). Shares going down.
  • GAAP operating income for the second quarter was $61 million, compared to $47 million for the same period last year.
  • Non-GAAP operating income was $112 million, an increase of 52% from the second quarter of 2007.
  • GAAP net income for the quarter was $52 million, or $0.13 per diluted share, compared to $34 million, or $0.10 per diluted share, for the second quarter of 2007.
  • Non-GAAP net income for the quarter was $92 million, or $0.23 per diluted share, compared to $52 million, or $0.16 per diluted share, for the second quarter of 2007.
  • Cash exceeded $1.5 billion and deferred revenue was $721 million as of June 30, 2008.
Second quarter U.S. revenues grew 43% to $240 million from the second quarter of 2007. International revenues grew 68% to $216 million from the second quarter of 2007 driven by strength in Europe and Australia.
Software license revenue grew 39% to $284 million from second quarter of 2007. Service revenues, which include support, subscription and professional services, were $172 million, an increase of 85% from the second quarter of 2007.
As for the financial outlook:
  • 2008 revenues are targeted to grow approximately 42% to 45% compared to 2007. Update: this is rather modest.
  • Third quarter 2008 revenues are targeted to be within a range of approximately $462 to $468 million. Update: Analysts were projecting revenue of $497.3 million
  • Third quarter GAAP operating margin is targeted to be between 11% and 13%. This guidance includes stock-based compensation, employer payroll tax on employee stock transactions, amortization of intangible assets and capitalized software development costs which are targeted at 9% of projected revenue.

VMware is hosted a conference call today reviewing its results and discussing its financial outlook. The call was scheduled to begin at 2:00 p.m. PT/ 5:00 p.m. ET.

A noteworthy statement from Paul Maritz in the call was also the fact that VMware intends to make VMware ESXi completely free. The free version, officially called ESXi 3.5, will be available to download starting July 28. Maritz believes this approach to virtualization will help bring more customers into the VMware fold and make virtualization technology ubiquitous.

VMware

Emulex First HBA Vendor to Support Sun’s Solaris Containers

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Emulex recently announced that its LightPulse Fibre Channel host bus adapters (HBAs) now offer Virtual HBA technology within Solaris 10 Operating System environments. Enhanced capabilities such as virtual port management, available via Emulex’s HBAnyware management suite, are designed to enhance the overall functionality of Solaris Containers.

“Once again, Emulex is demonstrating leadership in the area of virtualization by providing enhanced capabilities for virtualized servers within Solaris environments,” said Scott McIntyre, vice president of customer marketing, Emulex Corp. “Emulex pioneered Virtual HBA technology and is the only HBA vendor to support Sun’s Solaris Containers for virtualized server environments.”

Emulex’s family of 4Gb/s and 8Gb/s HBAs support Virtual HBA technology, which allows users to effectively virtualize the HBA functionality so each virtual machine running on a server can independently access its own protected storage. Coupled with Solaris Containers, Emulex Virtual HBA technology, which leverages the NPIV standard, also allows customers to maintain usage of SAN management tools and best practices, such as fabric zoning and LUN mapping/masking.

“Working with Emulex to support its Virtual HBA technology provides Solaris customers with a robust virtualized server solution that delivers the most enhanced capabilities available today,” said Michael Wojnar, Networking Product Line Marketing Manager, Sun Microsystems.

“This collaboration is critical because of the high correlation between virtualized servers and networked storage, and ensures that our customers deploying Solaris Containers now have a superior solution.”

Server virtualization and blade server deployments continue to be a major driver for increased Fibre Channel SAN adoption. Leveraging Emulex HBAs with its next generation management suite, HBAnyware, provides customers with enhanced virtualization features, such as virtual HBA management across all major operating system platforms including Microsoft, VMware, Linux/Xen and Solaris. Further, customers may now leverage the benefits of NPIV management functionality within a centralized single console. Online boot from SAN and enhanced diagnostics features also enable unmatched scalability and efficient management capabilities.

“We looked at the capability of the Emulex Fibre Channel HBAs and management tools and saw features that were not available from other suppliers,” says Steven Ham, Senior Windows System Administrator at Home Interiors & Gifts, Inc. “With the HBA management tools, we get discovery and dynamic configuration capabilities that would otherwise require additional investment in tools running on other SAN components.”

In an effort to educate customers and channel partners on Emulex’s connectivity solutions and enhanced HBAnyware management suite functionality, Emulex is offering a series of whitepapers and webinars.

For details, visit: http://www.emulex.com/solutions/san/index.jsp.

[Source: VMblog]

Azure Uses Intel Virtualization Extensions To Counter Malware

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Paul Royal, principal researcher at Damballa, has developed a new tool called Azure, which takes advantage of the virtualization extensions in Intel‘s chips to evade the virtual machine and sandbox checks malware authors often include in their ‘work’. Because the extensions exist at the hardware level, below the level of the host OS, the malware doesn’t have the ability to detect Azure, allowing researchers to analyze its behavior unimpeded.

“The whole point is to get out of the guest OS so the malware can’t detect you and attack,” said Royal. “Intel VT doesn’t have the weakness of in-guest approaches because it’s completely external. Others use system emulators, but to get everything exactly right in terms of emulation can be tricky.”

Royal plans to release the source code for Azure at the upcoming Black Hat conference in Las Vegas and will make the tool available for download, as well. Royal said he is still working on features that he plans to add to a future version of Azure, including a precision automated unpacker and a system call tracer.

Intel’s virtualization technology (VT) is a set of extensions added to some of the company’s chipsets that help implement virtualization on the hardware, rather than the software level. VT is designed to help enterprises make better use of their hardware resources and save energy.

[Source: SearchSecurity]

Interphase Systems Wants Lew Smith To Grow Virtualization Business

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Management and technology consulting company Interphase Systems today announced it has named Lew Smith as Product Manager, Virtualization Solutions. In this newly created position, he will be responsible for building Interphase’s virtualization practice and offerings. Smith will continue to build relationships with existing technology partners, as well as engaging in new partner relationships.

Smith comes to Interphase Systems with 11 years of experience working with large enterprise companies in the areas of IT project management and large-scale application management. Most recently, he served as a senior project manager at Advanced Automation, a manufacturing systems integrator, where he managed multiple million dollar projects within the food, beverage, and pharmaceutical industries.
Lew Smith holds a Bachelor of Arts degree from Elon College in Elon, NC. He currently lives in Kennett Square, PA.
“Virtualization is our fastest growing practice area and we had the need for a dedicated Product Manager with the expertise and experience to lead this part of our business,” said John Biglin, CEO of Interphase Systems. “We are thrilled to have Smith join us at this important time to help expand our growing virtualization practice nationwide and bring businesses a solution that will save them time, money, and energy, while also providing increased security and disaster recovery capability.”
[Source: Marketwatch]

British Library Consolidates Wealth of Digital Data With Virtualization

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The UK’s national library, the infamous British Library, is using a new Ethernet networking infrastructure as the basis for a number of projects to digitize huge amounts of content and to consolidate its data center using virtualization.

Stephen Lilgert, the British Library’s head of infrastructure strategy and development told IT PRO the library is celebrating its tenth anniversary at its St Pancras facility and needed to update its existing networking technology in support of a number of initiatives.

The Library now uses equipment from Foundry Networks (which coincidentally, as announced today, was acquired by Brocade) to meet demands in increased networking capacity for a wide range of digital projects, from digitizing current and historical library collections and materials, to enabling virtualization in order to control costs through better use of server infrastructure.

It is using the latest BigIron RX-8 Layer 2/3 backbone switches and FastIron Edge X Series Power over Ethernet (PoE) ready switches to augment its existing Foundry equipment already installed at its Boston Spa and St Pancras sites.

Lilgert also said VMware technology, used for 18 months now, has already helped reduce the server farm by 80 machines.

“That amounts to £14,000 a year in power, not to mention £4,000 in air-conditioning and cooling,” he said. “We’re looking to reduce our large physical server infrastructure through a combination of consolidation and virtualisation. We are running a clustered, high-availability VMware infrastructure working on the basis of around 25 virtual servers sitting on one physical host. Bandwidth, therefore, needs to be increased at the distribution layer hence the deployment of gigabit Ethernet FastIron Edge X Series switches in our computer rooms.”

[Source: IT Pro]

Nebulas Virtualise Appoints New CEO, Partners With VMware, PlateSpin and Vizioncore

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Nebulas Virtualise, a provider of virtualization solutions and part of the Nebulas Solutions Group, has appointed Mike Young to head the division and announced a series of new technology partnerships, including VMware, PlateSpin (Novell) and Vizioncore.

According to the company, Mike Young, who has been appointed to head Nebulas Virtualise, is a virtualization specialist with over 20 years’ experience in managing complex IT projects. He will lead the technical team and will be involved at all stages of client projects. Before joining the company, Young worked at System Group Integration (SGI) where he was responsible for implementing large scale VMware and Microsoft solutions.

The new partnerships with VMware, PlateSpin and Vizioncore are expected to ensure that the company can offer customers the latest virtualization solutions. Nebulas Virtualise will market a complete service from initial consultancy, cost and return on investment analysis, infrastructure planning and migration and management of virtualized environments. The financial details of the partnerships were not disclosed.

[Source: TradingMarkets]