Vmware (VMW) 30 May 192020 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to today's VMware First Quarter Fiscal Year 2020 Earnings Conference Call.

As a reminder, today's conference is being recorded. And at this time, I would like to turn the conference over to Paul Ziots, Vice President, Investor Relations.

Thank you. Good afternoon, everyone, and welcome to VMware's First Quarter Fiscal 2020 Earnings Conference Call.

have Vice Chief Officer. President we Zane Officer; call Executive Rowe, and the Pat Executive Gelsinger, and On Chief Financial

their will we prepared Following take questions. remarks,

posted close press at being is the and webcast in Slides webcast the market Our conjunction issued this webcast. website from after conclusion accompany be was and this of release simultaneously is ir.vmware.com. downloaded can on which call with our where remarks, of viewed live

subject risk such are risks will as the make not those VMware forward-looking Actual We intend the X-Ks On may and described update files and this call statements. results SEC. do that uncertainties. currently to assume today, we a forward-looking statements result factors, in to differ obligation materially no and with any XX-Qs of XX-Ks, various including to

today's In we GAAP substitute as be measures. as to certain These are non-GAAP measures. of not financial discuss considered VMware's financial will used isolation measures from performance, or should in which addition measures addition, non-GAAP during in for call, a

gains other Pivotal Our tax items, effect impacting rate. stock GAAP compensation, stock-based transactions, of on intangible on dispositions GAAP payroll of the software acquired acquisitions, and and non-GAAP discrete results amortization assets, the employee on our including employer measures or our exclude losses tax related items

in press and on release You can Relations find comparable additional disclosures regarding these the with GAAP our non-GAAP measures, including measures reconciliations website. Investor

for will available the call of the XX link. webcast The website this our be under days next replay Investor Relations on company

business begins the of July quiet Thursday, XX, period XXXX fiscal XXXX. quarter at second Our close

over to it I'll that turn With Pat.

important revenue with the diverse Dell during start share. the with Services, per to of non-GAAP partners quarter were $X.XX to product was key quarter increased a portfolio. XXXX fiscal Paul. announce Web year-over-year pleased good across especially Microsoft. QX We Amazon share and agreements per earnings XX% our for Total Thanks

geos the after the QX, in record-breaking QX had XXXX.. strong Our results year-over-year other geographies trailed EMEA and Americas in growth while particularly Asia-Pacific

cloud is any that VMware's a any delivered to software app on vision architecture device. deliver to enables any

this embraced cloud, increasingly look and transformations. being strategy comprehensive modern for our digital hybrid security across apps, Customers to to deliver on and their Our networking customers vision digital solutions continue multi-cloud, to to enable is VMware by Workspace.

cloud every preferred AWS offering AWS month. hybrid our the new cloud with major Cloud continues capabilities on On VMware front, VMware accelerate delivering and to

We the purchase with addition reseller first the flexibility deals recently lender in agreement of agreement AWS VMware enabling one customers place. cloud a national resale and PennyMac, the AWS closed through VMware. announced in the was to leading home AWS on to servicer

We also in recently was recently announced XX available on with AWS service designated the Mumbai, availability VMware and Singapore, VMware Cloud Canada, on globally. now in cloud regions AWS FedRAMP in Paris level. FedRAMP baseline The cloud environments. on at process baseline authority the to operate sensitive are to path the high used to high data protect in computing most requirements government's the unclassified

to infrastructure to service managed service to cloud a Featuring unveiled and edge Digital, organization Within hybrid storage, cloud and enabling center VMware's VMware simple, delivered which on a be software, on-premises business on and differentiation. the to example At World of VMware in They customers Dell Dell networking scalable Cloud, VMware, fully Cloud April, data UK's Care as in digitally-enabled customers hybrid NHS Dell more help Dell by its momentum to partner technology System. will available and innovation solutions make Technologies and set accelerate have and One the high-performance for we compute, focus secure, locations. offering, seeing national announced provide the environments is information are Health cloud simpler and and manage. deploy EMC we made customer new across AWS infrastructure cloud a that will care. of the Technologies Technology

announced Foundation, expanded VMware also comprehensive capitalize Microsoft offerings. solutions VMware VMware spanning and sold customers and enables offering and In Cloud announced newly with to Dell Azure on Cloud. and their by a partnership on storage, supported Microsoft, Azure cloud, Technologies is that cloud of the client an compute, management networking, software-defined

side Azure customers client the Workspace the with On expanded productivity this via manage devices with of across will able Directory. Microsoft integrations be XXX full mutual to Intune ONE agreement, use to features Office cloud-based and Active

the Horizon customers will to their to addition, Windows extend In of Desktop VMware Microsoft enable cloud initiatives Azure. further Cloud Microsoft VMware accelerate Virtual on capabilities leveraging

as NSX of VMware specific As such solutions. also VMware's proof VMware networking, initiatives with Azure cloud multi and of further Microsoft to further are infrastructure Azure between VMware services VMware with strategy, and a drive integration integration Azure exploring integration to an management

services also be significant Azure VMware marks specific to exploring, a will and on-premises announcement This the bringing step Microsoft VMware forward customers. relationship. in We

also now flexible with applications. stack VMware's line announced in Cloud We VMware for recently X.X, full which architecture Foundation of business is integrated VxRail available ready HCI

the pre-configured network, VMware announced HPE I/O complexity HPE ReadyNode controller storage X build for Infrastructure. to Desktop and server to of hybrid balance well own customers Horizon want Additionally, an of data management as cloud. optimized In this deployment that CPU data as with a designed features release Virtual supports new who ReadyNode and help The removes analytics. memory their and vSAN the April,

operations will Cloud advancements expanded to private across releases This our Platform. combine quarter, clouds. provide programmable enhanced new drive we product integrated Management across provisioning vRealize self-driving and and to VMware capabilities hybrid These continue

of the a their acquisition to building of our help outcomes. rapidly Kubernetes source QX gain upstream PKS, enabling We with VMware the achieve we customers are essential an platform, open them also control accelerating distribution Heptio business environment, support. ability while enterprise to superior introduced multi-cloud as CloudHealth result out In

and of kubernetes and leader applications click either and catalog stacks accelerate cloud is offering solutions vSphere extend which recently largest rounded and kubernetes current and cloud packaging deploy apps of NSX. a tightly allow environments. to offerings, offerings that to modern with customizable the kubernetes out our To our multi edition development portfolio application Bitnami, upstream we integrated This highly leverage acquired or one now major for customers in providing a

NSX providers NSX center the of networking and NSX-T to and newest that cloud performance large service. be enterprises, NSX-T of to Cloud, accelerate release can the as networking Communication virtual we is needs of both and Telco XG cloud leverage X.X the function just data the to datacenter build service beginning adoption the cloud On of data meet virtualization, network small. front, updated center and rolled into scale they designed VMware for is

March. to security strategy broadly VMware during RSA keynote I more was pleased at talk in about my

remove security from cloud. with We to are complexity today, intrinsic security inherent to the helping committed and endpoint deliver

Service intrinsic apps introduced for innovative digital the devices, experience to an internal on-premises while continue to firewall, of across firewalling infrastructure. Customers we security and standards. maintaining security defined the with environments great employees that highest dramatically also the cloud approach that RSA, be reduces challenged the an part and During with all a is VMware attack surface providing

Our Workspace customers act. helps platform ONE with this balancing

We Workspace digital aimed customers' announced our several this simplify our digital journeys. platform to innovations Workspace to quarter

we of announced Workspace acquisition to remote the Firstly, AetherPal support extend digital capabilities. our

and together Dell Workspace new transform unveiled customers and to offering bringing and support Dell ONE Dell services secure, In hardware how support Technologies SecureWorks manage, Workspace, deploy, with unified a endpoints. addition,

and the XXX Hybrid Workspace now mutual announcements, embrace multiple key Finally, momentum VMware clouds VMware across solutions. the custom Dell together models digital experienced managed manages three, cloud VMware with can cloud now with Microsoft manage now customer partners Cloud Infrastructure including to hyper-converged on the built as QX ONE IBM our partnership verified Two, announced customers clouds our and one, we and and with Reflecting with partner is Foundation their workplace meet Microsoft, and Cloud and on along clouds needs. AWS such Azure EMC.

datacenter integration major NSX support category. our most our client of With the Microsoft every most release, expansion uniquely our provides cloud across Workspace virtual the comprehensive is overlay and edge. ONE recent for partnership, Network network With the best cloud and

as the businesses VMware their foundation software the We deliver their harness experiences world's superior and digital infrastructure. customers to our digital ubiquitous technology to for remain customers. continues committed for the helping for essential serve

talk I'll now to to turn business it performance. Zane more our about over

for is us and in results of thanks this all continued today. and for pleased which quarter. to platform cloud broad our reflected We're Thank hybrid you, our expanding our with you Pat multi environments, progress joining

and as enhanced cloud Web us those Microsoft grew help their with accelerate growth. well customers cloud revenue recently revenue year-over-year. such and of In subscription QX, than Amazon total have Services, total positioned journeys comprised XX% partnerships grew year-over-year. future SaaS our XX% Dell Hybrid and license to revenue XX% Our greater announced XX% support and increased and

was XX.X% initiatives. count and of drive ongoing includes Non-GAAP and share the growth. and million for in VMware for our our cloud $X.X Workspace reflecting end SaaS a cash short-term with and Velo the to billion ONE, hybrid our cloud earnings revenue CloudHealth, Cloud, AWS. category guidance share billion. per was These offerings was QX totaled VMware investments revenue such quarter investments operating addition services provider subscription QX and Unearned and non-GAAP $X.XX multi cloud margin shares. $X.X at on on recurring hybrid to quarter cloud Horizon In as Cloud continued consistent diluted program, XXX

QX or or XX% was XX% the of reclassification excluding adjustment Unearned revenue a plus subscription SaaS the revenue XXX License to our which adjustment revenue up from fourth revenue Growth and fiscal revenue plus of the unearned impact unearned exiting in revenue in saw an quarter percentage reclassification quarter. XX% same in revenue from XXXX. license an year-over-year hybrid in the in when benefits sequential also our for from excluding positive revenue change in XXX in change sales and of due to reduced business momentum QX We QX the both unearned the ASC the increase benefited XXXX. cloud unearned grew XX% offerings. up sequential

VMware grew time over license was all top We with the XX,XXX. and FYXX. this NSX top which in quarter first all included an were exited also deals. $XXX the We're VxRail with the of NSX of making partner with some QX. performance the selling at license as vSAN. we've for in QX total for license especially VxRail progress with a pleased the our scale vSAN The pleased deals XX was bookings the million of bookings of we're quarter full deployments count to of on year-over-year with for included X year-over-year area been focused of $XX QX vSAN XX compared NSX, customer over number in XX% QX of XX% million QX increased of in we in end versions to over portfolio We led growing our business. included backlog

we which the This Workspace top had EUC ONE. our market channel leading was in mobility in of manufacturers, will bookings Dell. and teens the employees. opportunities their license product are over ever of sold Sddc time. bookings are our and with the the bookings using of by double XX% the SaaS SDDC over particularly with Core ONE grew low such in year-over-year driven Core grew approach across up Workspace included for this in world's teens with open globally as one deals to in deal second-largest adoption now we commercial bookings digits. percentage expect to of total the year-over-year, lean through increase low QX offerings new it EUC EUC this subscription license XX Over quarter X XX,XXX low

million license for strong bookings license license increased and the primarily the our well million high in authorization vRealize our In growth the end double the bookings management grew VCPP single current in value Compute up cloud mid quarter. hybrid the by repurchase digits bookings in which compute we solutions which management of growth the bookings as stock management driven digits customers. QX, in Cloud remaining digits as year-over-year. year-over-year. $XXX in was total in driven $XXX under repurchased CloudHealth cloud grew Cloud with at had bookings single management by total

of an shared the authorization announce billion year, FYXX. $X.X last good through we're additional pleased which outlook positive maintaining our of a end to QX We're quarter. we FYXX stock was and start to the repurchase for

non-GAAP XX.X% non-GAAP to share to year-over-year a and $XX.XXX continue earnings License growth revenue billion, share revenue of a margin growth of XXX the per we $X.XX shares. of XX% account diluted operating $X.XXX per expect year, of billion. XX.X% For of full million share total on to

flow cash $X.XXX expect to free and flow continue also of $X.XXX of billion operations cash billion. from We

an be year-over-year billion, up year-over-year. is For license total of expected with revenue billion, XX.X% $X to $X.XXX FYXX revenue XX.X% increase of QX,

share accompanying per deck a share XX.X% website expect is full the margin non-GAAP on non-GAAP $X.XX Detailed We million XXX slide of our guidance QX and call. this operating shares. for of and account diluted a the contained on EPS of in year

value our environments. providing reiterating issued multi enhance for us we cloud hybrid QX profitability to quarter. customers and premium forward continue will guidance and for on has execute performance for summary, In portfolio a to technology generation. and to updating well-positioned look on to our partners We and we're year again the with next cash our growth, our plans progress revenue previously flow foundation you

turn I'll the that call With over Paul. back to

Zane. Thanks

the get as let's begin one I'll people to limit you question to can consisting Q&A, we Before one Operator, to of we possible. part get so many yourself started. as ask

[Operator Instructions]

RBC Capital from Matt first And we Hedberg. Markets have

a perspective about Hey guys, could think question. well the it And contributing growth? guys technical relationship the from at do a how a bit versus at question how here to about more with talked a thanks as to drill level, Dell top out think you talk about about taking into little for expanded you I'm relationship wanted guess Azure as down both I my start you AWS? if that high-level Microsoft and wondering that line I you high World.

said, these This customers thanks, the footprints appreciate and brought are customers think Matt. looking together, see that I'd Pat what Dell, interest market and and was Technologies Azure, like and to of to with and of as that really come were Dell Hey, question, my is was VMware announcements Amazon. because Microsoft, big obviously ultimately together, partners the advantage I starting high on thus really boy, take who this with and the World us strategic and

VMware solution in service. environment, offered Azure It's to advantage is by And streaming delivered Microsoft virtual their customers cloud, the take simple. driven, VMware of enabling further Azure a customer

some addition that, management, capable networking we services things Azure fully the Microsoft XXX partnership to of announced Microsoft in that a Workspace In we well then forward-looking with Azure client announced environment, the AD now on-premise. in and ONE as

VMware, preferred with for bring offer really we marketplace them. and really compelling advantage for the contrast, VMware, the to take So, partnership VMware overall. VMware is by footprint a is Amazon announcement the cloud the the offering leading AWS the relationship very In being offered to customers that of

or HCI like technology ways. the available Foundation I is to the run One is either way customers software The the it this think VMware VMware three software/hardware can our the offering. or Cloud about with

or and seen cloud other partners it cloud for we've customer; or is are that our IBM, on run now on there, examples announced we clearly and And as we plus outpost partners years, as the great momentum them. Dell X,XXX there, will of the two Second can AWS VMware run it that for great Azure momentum we've announced plus VMware the the EMC cloud VMware on-premise. also but on cloud now VMware have, well

cloud with Azure lot that preferred really to Cloud industry see in from and great and the VMware for strategy AWS. customers, momentum comprehensive Azure a is bringing this uniquely excitement of VMware cloud we for that Foundation that in offering continue So, unmatched hybrid we offering, a now into on-premise, centric and Microsoft is see

just Hey, will part the highlighted part continue SaaS our we grow I VCPP be grew to of Matt. XX% cloud business was This category revenue our year-over-year. hybrid and as add, which nicely it is that Zane. part which of of earlier I'll

that we continued continue growth by the area So to see expect Microsoft augmented relationship. to

Next, Lynch. Please we America have Merrill from Kash go Bank Rangan of ahead.

partnering compression top not that need integrate a but the there market to have net It different and everybody. are think just turns see one, competition, this level you compression out compression in to these AWS going that at game, playing be and put year. question I providers a a a that companies Microsoft, your world the is the that [ph] congratulations really you you're the and partnering into, zero-sum for partnerships you. curious driven don't all new competition. is to fiscal do to so them. the fundamental additive When your you're customer by look if it for I'm opportunity the start fantastic AWS on Hi, it's was available that or at really Pat, want to and but you're cloud mouth, for with technology words a changed big you and competition I had to total to previously the got two with Microsoft it's

So we long how to in a this additive of marriage sustain? new where -- can that spectrum zero-sum can partnership Thank world, in are completely this it a marriage? how and a Is you. or

future. They're we end highest far going Yes, back are positioning. that migrate take the there's re-platform Azure, it's if and we it's multiple IBM of statement. thanks cloud in five Kash clouds. from strategies go to Everybody really advantage for that all the agreeing clouds where not with question, see to believes the years agreed to this a uniformly the And having good quarter. spectrum now on I And going the level, with can powerful multi-cloud to of that hybrid VMware And ago. that the today. a Amazon, have that the hybrid appreciate of cloud with come plus Customers Google, we've forward additive hybrid we that positioning to and inside said seen comments multiple be now ultimately and a began for for is

cost example us, that to technologies, They're them. automation, world, VMware customers we their workloads, that it. industry we're and because and NSX benefiting their, the to on where it's is take cloud we're from in at stack accelerating customer great operations say of is the efficient interest able supporting is ability with reduce more cloud. new more about IT accelerate a seeing their for now think and Also, use and to I'll running they're this aligned positioning people's all be this So, to highly the move clearly point, that able for expand hybrid

reaching right we're these they effective essentially operational that because we're would have. TAM expanding So costs into the

growth So say at the of I'd public I'm point this see to continuing clouds. rate great the

we're end we term, from on the we're getting the evidence every of the the additive spectrum, but business and for we're opportunity is on rate, growth track. is to way long say us customers clearly Our would this right

Next ahead. from John Jefferies go have we DiFucci. Please

spend really why on on I strong results I generally And do players. Do and face here, and for I what even strong. you you. companies they some you software spend mean results three here Thank looks out of look of have raise was some And many just than cash, sort like Pat I two don't are because then really you it I got in a that guess too right many VMware Pat are infrastructure seeing lot aside a Zane, guys guidance. here. didn't that quarter time Zane you the have other have to to the but anything -- also the much players. echo we soft really to like softness view know you others apps that you are. don't so two. have don't think want tonight want there don't guys --I because a better contribute of

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the the effects, We macroeconomic affect Well, thanks in comments. that some mac-- they'll think do everybody these environment. that for right of John that

in long-term some to As going continue optimistic to continue optimistic. technology tech say the of trends their on losers can of that IT right software will before, different of on to be and market that. differentiation. businesses the becoming We growth outpace growth. view we to this of out me and going growth. Enterprise is outpace you've be heard tech and more there's on Overall, We be GDP breaking see IT being sort side growth technology winners centered

of optimistic. of remain overall the going we cyclicality different on the aspects, some players, affects trade some different Clearly, but

deliver Our very my Zane? strategy a and pleased the team quarter. to resonating execution is super solid of future well the into with

I'll Pat's year, in the customer consistency to out. the about some out Yes. thought extent point, like portfolio degree expected. as feel product We our not we're about John, we had playing some it's and the in And ROI I immune we've to to we've of also would as good the it. strong. start point you as pointed we investment just year that add is some for out to their feel

resonates. So I think that

from I think that. the strategy benefiting resonates we're and

I with year. think environment. tie landscape, forecast across seeing and we're the beyond some macroeconomic there's what some we're our of feel But volatility seeing that uncertainty good to and obviously the you're early comfortable the broader what for about

with Barclays. question from Lenschow Next is Raimo

all being stronger to guidance congrats of me actually cannot and how of all actually again his actually you Pat the we well horizon Hey, had or kind raise. saw And John's Zane and game software changed you. the you you of your sales goes normal I approach? was than but on we from the beat you your wanted maintain on overruling anything a know that you as and like conservative was is if see And billings kind that Thank good the was stay point. QX on results kind --we just, score QX, know billing --

will environment. and uncertainty for year, We're Zane the right first mean And here. that say help the it will me we the I half do with certainly comfortable. macro for in start feel Well maintain the right. view we I'll and marketplace. with is certainly influences guide and the some in we There

and seeing a strategy teams to with that think well those into continuing going is the quite we And QX that for got the momentum around it's us. we're execute half. for the give year. but in about it, go strength. positioned some We uncertainties good still are to We We feeling yet a second our early us by lot our strong of are year of execution see

it, actually add good conversation just was Yes, with Raimo. Pat. it I'd a

not in the would otherwise year. little We on a start one. thought what early the this of we on aligned for variability some we're think little ahead confident some the FX our think and here little of at, look naive volatility global that we're bit as think the did It's seeing weakness we're quarter-to-quarter. a had about to competitors to year. there. And year And a John uncertainty came mentioned, that I in pressure again bit bit and have out a of see good of I So we

we're the comfortable positioned the how again like So where, we're for and year forecast.

we Karl Deutsche Bank. have Next Keirstead with

total was while for that Thanks. billings Zane. on Question if a highest The against the you growth of you could adjusted XX% pretty just we've I'm strength. a seen wondering in compare. tough elaborate

I think about what SaaS I wondering little that you're you the that the further hybrid that billings strong the our it, And mentioned renewal year. you. says add cloud to could bit a that just of renewals, to Thank know but more. maintenance I'm contributed total DR, you the so of bucket the through environment most number remainder maybe facing

mention in that some did fourth strength in more we that. the momentum done give on that The terrific have that saw I Karl. to teams maintaining moving Happy from job quarter. clearly color we and sure, Yes, quarter. benefited a the from the fourth

feel the towards the which saw is strong second year. only the business been have obviously half a that's been bookings from We growing the of we attach has strong the SaaS quarter, element the bookings of in then there. bookings about last renewals So from too. part nicely and number, aggregate with not some key ELAs good And that we strength PSO saw benefit

the good saw some as side the And we strong services well. came in of renewals then things. So

that I'd I'd say but guide overall speaking put to the out that's us side. the from the and out put strength again the that motivation that's we earlier generally So maintain in guide say seeing the year, booking given the you're total to

with Next have Pritchard Walter we Citi.

Hi, thanks. Zane Similar for question license on billings. I guess the

that's what revenue thinking anything bigger that going bit asked Why performance. forward the maybe billing is little you that the similar and growth now. I specifically billings And this spread license is and think there I seen the more about rate. from guess about a is revenue that wouldn't it accelerated just be where think between logically growth you've license to we guess see I bit the that a we're might detail case Karl

a spread the team. period bookings total It's increase to a question, that Walter. we've on that we've dialogue I'd revenue. in bookings, say be as The and to piece the great would license had some what Karl versus reason for guess we've the Yes. you'll the add on comes SaaS to here growth I tracked see seen with bookings

As perpetual bookings into revenue. with the the faster license into you know, will will translate SaaS revenue SaaS translate product than bookings the

any seen ramp you growing kind of with pleased very would expect of you been we've and products. SaaS SaaS and And of will the the type and more So see as products side. we've you'll SaaS with SaaS with strength our more revenue any bookings on expect booking as would products, with portfolio in come the then

the great and both is point well bookings again obviously I on SaaS a revenue the revenue of will both side. unearned continue will for by we're discrepancy on driven total the and license observation. bookings. strength on We the The as it's So quarter strength we're the the seeing seeing bookings bookings, and year, like SaaS between that be but the as fourth through course

our that of expanding And to of CloudHealth strength, VMware the on quarter. our Dell numbers subscription of creating strategic might us is of now it the strategic but component that time. think we some the these right that committed just of above we're These customers effects to onto of the as business XX% Zane, our as pile these our that the to outpost, be of are up growth we all role expanded market. giving this seeing Cloud business highly cloud more the have present EMC, ONE We've implications SaaS Workspace we see other VMware the financial of VCPP on is in we've effect also to that some over ability Cloud. relevance and Cloud the VMware are a value that implications, and a go will And bit, emphasizing now in seeing been XX% this a service our a starting business. good rate of drive direction And the portion and are to company hybrid a more to emphasizing

Next Mark we excuse Murphy. JPMorgan from JPMorgan we or me have have

you cut Walter US you thoughts just contract ask Pat, Sorry, Amazon VMware the I any did both get hybrid given on JEDI the partner had government's $XX that wanted settle and if Federal to is how you out Microsoft. now will billion for off.

for opportunity that see VMware You participate to JEDI contract. in the

that a be or point to not installed occur a various comments might approval. in losers answer winners the our is That's the forecast is were ready in authority the critical very FedRAMP obviously provider federal part achieve we off of that We base or the defense intelligence approval milestone what that to in are We're that while now ATO communities and our can't I'll able and high. offering exactly our governments a commented we getting for operate. call And that with with also our us it, be our occurs and FedRAMP government. out the or to are protests in getting may the as cloud we right. on process to FedRAMP simple Yes the with to vein, on military

significant our a of as critical is one us. to this cloud extension is see we quite and that So opportunity offering an VMware

Obviously, up that hopeful our nice And strong with we're in a participating piece with this partnership us us. to very positions that. So area important and Amazon that to be we over a time. way are business of is think I of becomes ourselves aligning

we James have Raymond Michael from Turits. Next

and of could if growth? I bit specific the were on one, also hybrid the be Hey, you about that to you SaaS guys, little things, wondering the contributors that trailing meaningful business components good was evening. a could And of most I if ? Two was just more wondering comment US

Sure. on the I'll touch portion. hybrid

XX% tremendous Workspace touched I we've think of great them We've SaaS the we've revenue hybrid SaaS. be to a over majority years. continues the job. has as right product now also the also the coming which on EUC, done of program now ONE out pointed VCPP with shown cum our I strength laid out is out,

then acquired great And site, we very CloudHealth on organic I'd excited VMC about showing large say in last another the have we're that's which AWS a year So we the side as the then on promise new contributor. acquisition that's on marketplace. and

XX% growing contribute continues and in So to that category. portfolio saw with all of the we that those increase combination to a

And QX but for tell in to the of was And for the as results them. not, cut in I Paul in guy to --that comes Americas EMEA America he's had we I'm quarters geo off and to perspective adjustments some of nice the at answering very set but strength we you, extraordinary some which a we just APJ, QX I'm strong but And some. won't do second growth. and the back a QX. question longer-term both strong on did territory record-breaking or us realignments for an in opportunity not take up we you

the Americas successful, in Dom leader proven in leader, brought this also stepping Delfino, into We QX. new role internal who's

that think a geo long-term the outlook growth. for about better sustained ourselves we good up we feel set and we So

have with Keith BMO Capital Next Markets. we Bachman

specifically has worse quarter Thank the and strong. question. the is including very much been you gotten points even for arguably. Red Hat really of wanted compute very center question revisit steady And the which meaningfully I in to rail have last on data the context taking

what current playing we of of comment in I'm you much. you the about very And so think is just the trying are a to And of that could as compute driving question it still just I role if launch investors including comparable what and wondering just strength rates growing, you the mixed quarter. you on, provided vSphere Thank was to the suggesting with to understand part steady Zane Platinum? really compute

hand start over Pat. to Keith. I'll it Sure, then I'll

that for outlook on to haven't a with contributes I which that that guide time changed be compute variety seen talked is outlook lower some our think I we've for about to is we've digits We VCPP strength. longer-term outperforming license thrilled been touched compute, that and but of the and how we've which reasons. for single now outperforming growth

outlook how So however. we're not our where, are longer-term comfortable there, changed progressing we with things have

looks of for Yes build of. was is comments stack VMware change essential on face It of element have are of portfolio. portfolio the whole as into of rates our that The expanding cloud VxRail of include this with quarter. to Foundation, for that and and solutions all the the to betting it's role, endurance other VMware compute renewal springboard the to shown earlier, that portfolio it. in are and a built central deals it with AWS future. depth the roles but on I've it good it's expanding also buying on embedded the the the every obviously customers more really whole one that emerging foundational no the renewal top customers those cloud, now breadth builds The large and with we much described element or on for products emphasizes our all And really that as portfolio sort Cloud strength is of the compute and really element of as positive VMware

very comment, get hope Keith, Thank And say on starting comment you, positive traction. I'll out the at point. the yet more positive that to this a Keith. or but at two. element say not Oh I performance in to getting capability. not I be It's point, in it's We're Platinum sorry material about to this am the material signs. excited But early update to a a quarter able we way we're

have Bernstein Mark from Next we Moerdler.

to Can container work opportunity. Thank sort think is you is change virtualization how versus you give the all business done focus some you've look done this business us at the my at on revenue a on very of driving over server the you little question. thanks that's the how taking of side and you've point the the much. Changing color investments time? going and And bit is to much container the for

I very to Yes. its sense and going that and is But early I'll at to in of are people life model amount in deployments the an modest think the move say there broadest in production future. the of are point. this statement. Containers consensus containers be this industry is would very a container centric

kubernetes gain is VMware So I've quite consensus it's really broadly, to It terrible situations acquisition, Mark, in described that perspective, Java I'll the of and as But important say Heptio the containers quite point. where the next one this right. it VMware customer around is before. we've business wonderful PKS these And was it's spectacular. the industry modest the at two continues more the building with of expanded traction From a decades, our impact portfolio.

source talked that support, combined we with kubernetes We opens full PKS Enterprise. as of we've essentials now have VMware version PKS about

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we have Research Cross Cross. Shannon from Next

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having cross curious relationship if what part Dell seeing sales sales you with with VMware Okay, can bit Dell sorry. about No, just as more talk regard a to people you're the I'm of at any of getting little you. seeing Thank point. the from this channel be maybe to as their you're is family closer. your if And other any pushback a partners quotas

quarter. And had another Thank we overall you with Dell strong very Dell, much.

vSAN the to solutions, the more I Workspace momentum continued an ONE. real we're creation the Dell what Workspace of quite think expanding gaining seeing the and seen jointly fully is we've But engineered really where relationship Unified So that's that the expanded really value partners we with right, built And our expand overall as nicely a than and joint partners and now strong partners becoming super-excited area their the even announcement VxRail Dell is growth nicely. on the us of rest for for quarter of VMware and strong and saw The Dell's That is and the our in you numbers programs business. of said HCI saw in other that Dell. a channel that well. good

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that exclusively done our deals the business a that VMC of first gives going the for through channels. of us optimism area partner Some And great forward.

Shannon. you, Thank

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be the question. will last this So

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which use double a wire. what I'd NSX got Okay, to us and Pat, quarter this for on the thank and you tell click of terms good seeing had glad you in and in on NSX-T bookings. ask NSX-V? I under very demand like you're license another cases can question and of

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public a top of in ever this XX with success across cloud our and a adopting in well role become standard one into it such our bare plays as really QX, solution earlier we've and basing The financial VMC the we're strategy, mentioned seeing deals included selling our and customers seen central entire networking with NSX-T launch now just a VMware as and of not of case, the provider VxRail environments foundation it supporting but insurance environments. part it past and launched industries also use it major quarter solution, who across it, motion And strategy. now now as great metal Ten it the X.X. are VMware bundling our into into retail has of cloud of NSX-T I on our In their biggest

looking as sort of So the never security firewall in has us look that for opposed where competitive space announcement just and do say the respect. was distributed capabilities, NSX as in, as become it's a that that's okay, I'll how the should more to really app this you an now now we're bought really exciting alternatives, why of we phase at and new to And do delivering in journey. okay And is really the it do do platform is functionality really of a at of customers the before. question with now our we're journey are behavior customer now we every begin NSX with we're like, do looking we defense it possible NSX

long critical area And the of for coming term. expanded clearly continued offerings growth channel partners here, a our in, for track Dell's run this in the with think we that strategic business

guy remark to question. a your see to just if second not Thank Pat wouldn't mind actually I'll read And want about terrible you, you before few And are it. and center to Walter It's we his since seeing disaster that use cloud about Gregg. dev and minutes the customers outpost. such I'm of just Microsoft and I that final evacuation to prove a open data and up type as set platforms that including expanded the cases. have of of prior test they recovery and scenarios and backup relationships beyond like interest new have Do

I workloads say take capabilities workload part say, against we're about see do a case. burst talked operation Yes and giving oh, that advantage can is And we've of customers haven't emerge use expanded to really more the generally and really can this, real I'll now. where And These customers to customers starting as to hybrid say really on to balancing create expanded costs integrated the ability one instance and cases, just Also costs offering now them been some flexibility, able of we'd didn't storage of materialize that while where customers case. desire yet. at the use really use hybrid it's been really more DR can scale those these of of of these and a capabilities be of. network that for some allow are cases every starting cloud

in had lowering number on-premise, issues with where of on cases, that now or for adoption latency of the it's a customers that governance the to able empty managed be hybrid customer. part in workloads can they Also barriers cloud weren't cloud

agile of way. come. one the in to I more a and cloud accelerating great And believe every to marketplace, these they for the get in we production is think it points So more things the opportunity customers scale, rapid proof to looks cost-efficient become as to right, more forward

Pat. you, Thank

Q&A of End

Well, good. progress. Very our pleased conclusion in QX, with continued

platform our agreements year. ourselves forward to broad to We quarter as quarter. update in well-positioned continuing Web again and you Dell next our announced for our with on see been but have Amazon Microsoft. plans also multi important you Our both very is grow. to look hybrid with this to to customers very continuing cloud progress partner for much. more And Services, and full to and It's the that continuing become for we Thank our strategic execute

conference thank our for again We does conclude that and you us. gentlemen, for joining ladies today. And

disconnect. You now may