VMware CEO After Storming Quarter: “Tech is Stronger than GDP”

“CIOs have become more important to the business…”

Virtualisation giant VMware’s Q1 outperformed expectations, with subscription and SaaS revenue for the quarter climbing 39 percent on-year to $572 million.

VMware Cloud on AWS (a way of running virtual apps and desktops from the cloud giant’s data centres) meanwhile reported triple-digit revenue growth, the company said.

Company revenues for Q1 were $2.73 billion. GAAP net income crept up $6 million to $386 million.

“Tech is Stronger than GDP”

CEO Pat Gelsinger told analysts on an earnings call: “Tech is stronger than GDP, and software and cloud is stronger than tech… Everybody will get affected by a major GDP impact.

“But technology, digital transformation is more important. So it will be several points stronger than the GDP, and cloud and software will be several points stronger than tech overall.”

Regarding the global shift to remote working, VMware’s CEO — who is somewhat uniquely placed to have a bird’s eye view of how CIOs have responded, owing to the company’s proposition — said: “Overall, this has just radically increased the ability to have managed devices, also a meaningful acceleration of VDI (Virtual Desktop Infrastructure).

“VDI was sort of, ‘hey, we’ll just use a subset of apps that are managed apps as opposed to a true, full VDI experience’. So unquestionably, this has been an accelerant [for full VDI]. More customers need it.

“[WFH] is not a spurious thing. We’re going to be here a while…

“Every device needs to become managed. Every device needs to become secured, right?”

He noted that “Most CIOs have become more important to the business in this process. Everybody is now looking at those budgets and saying, ‘oh, which are the projects that are now most critical?’

“We’re not seeing customers engaging with us differently, but we do see priority shifts, right, different views of their pipeline turning into deals at different points in time.”