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Pat Gelsinger VMware

VMware NSX, VSAN Adoption Further Accelerates

VMware (VMW) momentum around VSAN (virtual SAN) and NSX (network virtualization) continues to accelerate, according to CEO Pat Gelsinger.

The latest evidence: NSX license bookings more than doubled and 1,700 customers were running the network virtualization software toward the close of VMware’s Q2 2016. Those milestones helped to lift VMware top-line revenues 11 percent to $1.693 billion for the quarter.

VMware also experienced “strong-double digit” revenue growth across its SaaS and hybrid cloud offerings — which includes vCloud Air, vCloud Air Network, some of AirWatch, desktop as a service (DaaS) and more.

Investors were impressed. VMware shares climbed roughly 9 percent in after hours trading.

The company’s momentum comes during a critical time. In recent quarters, some VMware investors and partners were worried about the company’s heavy dependence on the traditional server virtualization market — which is saturated. Other pundits worried that rivals like Cisco Systems would leapfrog VMware’s network virtualization efforts. Some critics even suggested that Dell’s buyout of EMC, expected to be completed this month, would ultimately distract VMware’s business — since VMware essential is an EMC sibling.

Amid all that noise over the past year or so, VMware CEO Pat Gelsigner vowed that NSX and VSAN would deliver strong growth. Fast forward to present day and his assertions are coming true.

Still, the company’s next-generation virtualization efforts are just getting started. The shift to a software-centric world, Channel Chief Ross Brown stated during a recent podcast, will unlock new partner opportunities. Moreover, VMware plans to fine-tune its partner program incentives at some point later this year in a bid to drive even more NSX and VSAN success.

Admittedly, VMware still faces some major hurdles — particularly in the public cloud services market, where Amazon Web Services and Microsoft Azure are setting the pace. Aware of that reality, Gelsinger says VMware is preparing new NSX enhancements that will blanket multiple clouds.

In the meantime, VMware’s Q2 2016 revenue growth figures have largely silenced the company’s critics — at least for now.

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