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VMware NSX, vSAN Revenues Accelerate, AWS Cloud Service Launching On Schedule

VMware faces intense competition in the software defined data center (SDDC) market, but CEO Pat Gelsinger likes the company’s product and services lineup — particularly NSX, vSAN and the forthcoming VMware Cloud for Amazon Web Services (AWS).

“Overall both products — NSX and vSAN — both of them had very strong quarters,” Gelsinger said during the company’s quarterly earnings call today. NSX now has 2600 customers, and the network virtualization technology had an 85 percent growth rate during the quarter. Meanwhile, vSAN had a 150 percent growth rate and now supports 8,000.

NSX and vSAN are critical to VMware’s effort to evolve beyond traditional vSphere server virtualization — which is a large but saturated business. Companies that attended last week’s VMware Partner Leadership Summit are also starting to bet on the new technologies, Gelsinger said. The partner support “gives us a broadening of our ability to reach the market overall,” Gelsinger asserted. “So both products [NSX and vSAN] are very hot. Both of them continue to see great momentum.”

Ross Brown

Among the potential reasons for the partner interest: VMware around August 2016 updated its partner program to boost margins for NSX and vSAN, Channel Chief Ross Brown told ChannelE2E at the time. An “auto approve” deal registration system should also accelerated deal flow, he added.

Fast forward to present day, and those products play a key role in the forthcoming VMware Cloud on AWS service — which customers are beta testing now. “VMware Cloud on AWS will be powered by VMware cloud foundation — which includes vSphere, vSAN and NSX,” Gelsinger said. The beta test is “significantly over subscribed” and the completed service is on track for lunch by mid-year, he added.

Looking ahead, it’s a safe bet AWS and VMware will partner on a channel cloud strategy. I suspect details or at least some preliminary guidelines will potentially emerge at VMware VMworld (August 2017) or Amazon AWS re:invent (November 2017).

In the meantime, VMware seems to be gaining momentum. Revenue for the company’s first quarter was $1.74 billion, up 9 percent from the first quarter of 2016.

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