VMware reports a strong Q4 but an uncertain future

VMware reported solid revenue and earnings results for its fourth quarter of 2008, beating analyst predictions.

On the positive side, VMware’s fourth-quarter revenue was $515 million, up 25 percent from a year earlier and slightly ahead of what financial analysts had been expecting. For fiscal 2008, the company’s revenues were $1.9 billion, an increase of 42 percent, which also came in just above analyst estimates.

[ Take a slideshow tour of InfoWorld’s 2009 Technology of the Year Award winners in Platforms and Virtualization ]

“VMware delivered a solid fourth quarter to cap off a successful 2008. We have been executing well in a difficult economy,” said Paul Maritz, president and CEO of VMware.

The company may have ended 2008 on a strong note, but they echoed the same gloomy outlook for 2009 just as many other firms have in their fourth-quarter statements. VMware said it expects sales from the March quarter to be about $475 million, less than the $497 million analysts have been forecasting. And like many other vendors, VMware declined to provide specific guidance for 2009, citing economic uncertainty.

And despite today’s layoff announcements from a handful of large corporations, VMware isn’t saying anything about big layoffs yet, but stated the company is watching expenses. Last year, the company instituted a hiring freeze except for certain strategic areas and said it would postpone merit raises in 2009 to help keep costs down.

VMware still finds itself competing well against increased competition from Microsoft, Citrix, Oracle, and others. However, Maritz doesn’t appear to be phased by this increased competition. Instead, he believes the major competition is the economy and not other virtualization platforms.

“In 2008, we made strategic investments in our technology, partnerships, and business operations that position us well for 2009 and beyond,” said Maritz. “We are making solid progress on our three key initiatives to build on our virtualization leadership in the datacenter, the cloud, and on the desktop. We are executing on our product road map, strengthening our ecosystem of partners, and bolstering our management team — both globally and operationally. VMware is well prepared for the opportunities and challenges ahead.”

VMware hasn’t given any specific release dates for any of its new products, only saying that they will appear sometime in 2009. Expect more announcements next month during the company’s annual trade show event in Europe, VMworld 2009 taking place in Cannes, France.