Financial Analyst Meeting 2015

Transcription

1 Financial Analyst Meeting 2015 Business Momentum and GTM Evolution Carl Eschenbach President Chief Operating Officer 2015 VMware Inc. All rights reserved.

2 Forward-Looking Statements This presentation contains forward-looking statements including, among other things, statements regarding VMware s prospects for future growth based on current and future products and investments, including those in the Software-defined Data Center, Hybrid Cloud and End-User Computing; expectations for ongoing product innovation and growth, and related impact on and transformation of the industry; expectations for business momentum and evolving go-to-market strategy; prioritization of investments; ability to scale and disrupt through innovation; and expanding Business Mobility footprint. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in consumer, government or information technology spending; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into the virtualization and cloud, end user and mobile computing markets, and new product and marketing initiatives by our competitors; (iv) our customers ability to transition to, new products and computing strategies such as cloud computing, desktop virtualization and the software-defined data center; (v) the uncertainty of customer acceptance of emerging technology; (vi) changes in the willingness of customers to enter into longer term licensing and support arrangements; (vii) rapid technological changes in virtualization software and cloud, end user and mobile computing industries; (viii) changes to product and service development timelines; (ix) our relationship with EMC Corporation; (x) our ability to protect our proprietary technology; (xi) our ability to attract and retain highly qualified employees; and (xii) our successful integration of companies and assets we acquire. These forward-looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K that we may file from time to time, which could cause actual results to vary from expectations. VMware assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release VMware Inc. All rights reserved. 2

3 Top 5 CIO Priorities to Transform to a Digital Enterprise Bridge the Physical and Virtual Worlds Be Software-Defined Agile Cloud Platform, Traditional and Cloud-Native Applications Embrace Business Mobility Unlock Intelligence from Virtualized Data 3

4 Any Device BUSINESS MOBILITY Applications Devices Content Any Application Traditional Applications Cloud Management Cloud-Native Applications HYBRID CLOUD One Cloud PRIVATE Data Center MANAGED vcloud Air Network PUBLIC vcloud Air SOFTWARE-DEFINED DATA CENTER Virtualized Compute, Network, Storage Build-Your-Own Converged Infrastructure Hyper-Converged Infrastructure 4

5 Evolving VMware GTM Motions 2014 Recap GTM Evolution Solution Selling Multi- Product Multi- Channel Generalists and Specialists Perpetual, Subscription Models 5

6 Software-Defined Data Center Hybrid Cloud End-User Computing 6

7 Software-Defined Data Center Hybrid Cloud End-User Computing 7

8 Business Momentum Foundational Gartner 2015 Magic Quadrant for x86 Server Virtualization Infrastructure: A Leader in x86 Server Virtualization for six years in a row 1 vsphere 6.0 is one of the most rapidly adopted vsphere release ever IDC: #1 Cloud Systems Management Software Vendor 2 (2014 market share) IDC: #1 WW Data Center Automation Software Vendor 3 (2014 market share) Emerging 700+ paying NSX customers; most deployments of any SDN solution Gartner 2015 Magic Quadrant for Data Center Networking: A Visionary in Data Center Networking 4 NSX: Strong momentum in customer deployments Software-Defined Data Center Virtual SAN customers Future Bets Cloud Native traction: VIO: In market less than 2 quarters; seeing large scale deployments Open-Source Ecosystem and Containers support Sources: 1 Gartner Magic Quadrant for x86 Server Virtualization Infrastructure (July 2015) 2 IDC, WW Cloud Systems Management Software Market Shares, 2014: Year of Hybrid Cloud, June IDC, WW Data Center Automation Software 2014: Year of Cloud and DevOps, June Gartner: Magic Quadrant for Data Center Networking (May 2015) VMware Internal Analysis Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 8

9 Customer Success Software-Defined Data Center Referenceable Deployments Software-Defined Data Center SDDC Deployment: Minimum of 3 out of 4 (vsphere, vrealize, NSX, vsan and NSX/vSAN) 9

10 Software-Defined Data Center Hybrid Cloud End-User Computing 10

11 Business Momentum Cloud Services Rapid growth in usage in past 12 months Gartner 2015 Magic Quadrant for Cloud Infrastructure as-a-service, Worldwide: A Visionary in IaaS, Worldwide 1 Partnerships 11 data center locations around the World New Service locations: Germany, Australia Launched vcloud Air Government Service Google Platform Services AT&T: Netbond (network services) SAP IaaS Certification Continued momentum in vcloud Air Network partner growth vcloud Air Network Managed Service Provider launch Virtustream: Complementary services/technologies for mission-critical workloads Hybrid Cloud Sources: 1 Gartner Magic Quadrant for Cloud Infrastructure as a Service, Worldwide, Gartner (May 2015) VMware Internal Analysis Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 11

12 Customer Success CERTIFICATIONS Worldwide ISO 27001:2013, CSA International AICPA / SOC Type 1/2/3, UK G-Cloud 6, HIPAA and HITECH, FISC U.S. Government FedRAMP P-ATO Hybrid Cloud 12

13 Eliminating the Distinction Between On-Premises vs. Off-Premises IT 13

14 Software-Defined Data Center Hybrid Cloud End-User Computing 14

15 Business Momentum Mobile (AirWatch) License bookings growth over 60% YoY (Q2: Constant Currency) A leader in 2015 Gartner Magic Quadrant for Enterprise Mobility Management Suites for five years in a row 1 A leader in IDC MarketScape 2 ; #1 in Worldwide EMM Market 3 (2014 market share) Launched industry-first Identity-as-a-Service with EMM Strategic Partnerships: Apple, Google, Samsung Desktop ACE Program: Open standard for native integration between EMM vendors and mobile apps; 25 partners License bookings growth over 15% YoY (Q2: Constant Currency) Gaining share from the competition A leader in IDC MarketScape Worldwide Virtual Client Computing Software 4 Strategic Partnerships: F5, Google, NVIDIA Visionary Leader 5 Frost & Sullivan; Most complete suite in the industry End-User Computing Sources: 1 Gartner Magic Quadrant for Enterprise Mobility Management Suites (June 2015) 2 IDC MarketScape: WW EMM Software 2014 Vendor Assessment (IDC Doc#251379) 3 IDC WW EMM Software Market Shares, 2014: Fragmentation Continues, But the Dust is Starting to Settle, June 2015, Doc # IDC MarketScape Virtual Client Computing Software Market, IDC, Frost & Sullivan 2015 North American End User Computing Visionary Innovation Leadership Award VMware Internal Analysis Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. 15

16 Customer Success End-User Computing 16

17 Evolving VMware s GTM for Scale and Customer Intimacy 17

18 Portfolio Approach for Prioritizing Investments Platforms Multiple Product Groups All Want Tier Q3 Releases Products vsphere EVO Virtual SAN Horizon Suite Mirage vsom AirWatch NSX vrealize Automation vcloud Air Horizon DaaS Log Insight SRM vcloud Suite vrealize Operations Portfolio Prioritization Field, Channel, Functions 18

19 Scaling Coverage Through Standardization Globally Coordinated Solutions-Driven Coverage Exec. Sponsorship Federation Outcome-based Biz Transformation Services Partner-Led Virtual Touch Scalable Program based Differentiated Marketing Enabled Cost-effective Delivery 19

20 Global Accounts: Next-Gen Client Relationship Global Accounts Program Business First Industry vertical focus, share of wallet Customer-Centric Execution Joint planning, prescriptive solutions, executive engagement, customer advocacy Consistent Global Operating Model Account planning, execution alignment, accountability, talent development Key Verticals Telco/ NFV Manufacturing/ Internet of Things Financial Services Life Sciences 20

21 Architect Client Director Coordinated Common view and Coordinated response to Global customers Pursuit Teams GAM Aligned Shared Vision and Priorities Global Account Teams 21

22 Strategic Selling Anatomy of a NSX Sale and Deployment Selling Evaluation / Sale Production Deployment Buyers Security Virtualization Network Cloud Use Cases Security Full IT Automation Application Continuity (DR) Core and specialists engaged Education / Training Over 3500 NV Certified #2 All-time Hands-On Lab POC Discipline High-touch, Selective ROI Security OpEx CapEx Stages Initial Production Business Critical Full Adoption Learnings Adoption Journey (microsegmentation automation) Operational Support Critical 22

23 Solutions-Driven: Expanding Business Mobility Footprint Multi-billion Dollar Global Commercial Real Estate Company Multi-billion Dollar Nationwide Department Store Chain Target: 10,000 to 30,000 users (Horizon 6 Workspace Suite with AirWatch) Target: 15,000+ client devices (AirWatch Horizon 6, User Environment Manager, Application Volumes) 23

24 Solutions-Driven: Expanding Business Mobility Footprint Multi-billion Dollar Global Commercial Real Estate Company Multi-billion Dollar Nationwide Department Store Chain Target: 10,000 to 30,000 users (Horizon 6 Workspace Suite with AirWatch) Target: 15,000+ client devices (AirWatch Horizon 6, User Environment Manager, Application Volumes) 24

25 Bridging the On-Premises / Off-Premises Licensing Requirement Hybrid Purchase Program Flexibility Deploy On-Premises and Off-Premises Investment Protection Growth EA (Direct and Channel) License, SnS and Services Consumption Adoption and Usage Duration of EA Term Customer Satisfaction Licensing and Pricing Simplification Choice 25

26 Partner-Led: Differentiated Programs and Rewards for Better Channel Leverage Focus on Growing Business Recruitment and Dev. Of New Partner Types (SI/SO, ISV, SP) MDF Investments Differentiated Rewards by Sales Objectives Pay for Performance CSAT with Partners Value Channel 2.0 Differentiated Programs by Partner Type New Competencies: Network Virtualization, Mobility, Software-defined Storage, Management Automation, Cloud Provider, Hybrid Cloud Breadth and Depth of Expertise 26

27 Virtual Touch: Web-Based Assessments for Pipeline Generation Easy, powerful and free reports to help customers optimize their infrastructure Web-based pipeline and deal generation Partner-enabled 27

28 VMware Outperforming the Industry Average NPS Great Products Satmetrix Global Benchmark Technical Account Manager (TAM) VMware NPS Mission-critical / Business-critical Support Industry Avg Consulting Delivery Global High Tech Global Software Sources: VMware 2015 customer NPS scores Satmetrix 2014 Industry NPS scores 28

29 Key Takeaways Strong Business Momentum and Customer Traction for Emerging Products Aligning GTM Investments Through Focus and Prioritization Evolving GTM Motions for Scale and Customer Intimacy Customer Experience: VMware Continues to Outperform the Industry Average 29

30 Josh Warsop Senior Director, Global SDDC DevOps, Virtualization and Business Value Realization 30

31 AND 31

32 Acronyms GTM: Go-to-Market EMM: Enterprise Mobility Management GAM: Global Account Manager NV: Network Virtualization POC: Proof-of-Concept ROI: Return on Investment DR: Disaster Recovery EA: Enterprise Agreement SnS: Service and Support MDF: Management Development Funds ISV: Independent Software Vendor SI/SO: System Integrator/System Outsourcer SP: Service Provider CSAT: Customer Satisfaction NPS: Net Promoter Score 32

33 Growth in Constant Currency A majority of our sales are denominated in the U.S. dollar; however, we also invoice and collect in the euro, the British pound, the Japanese yen, the Australian dollar and the Chinese renminbi in their respective regions. The U.S. dollar is the functional currency for all of our legal entities. At the time a non-u.s. dollar transaction is recorded, the value of the transaction is converted into U.S. dollars at the exchange rate in effect for the month in which each order is booked. As a result, the amount of license and total revenues and unearned revenues derived from these transactions will be impacted by foreign exchange fluctuations. In order to provide a comparable framework for assessing how our business performed adjusted for the impact of foreign currency fluctuations, management analyzes year-over-year license and total revenue growth on a constant currency basis. Revenue Growth in Constant Currency and Sequential Change in Unearned Revenues License and total revenues recognized during the current period derived from non-u.s. dollar based transactions were converted into U.S. dollars using the exchange rates that were effective in the comparable prior year period. The calculated current period license and total revenues, adjusted for foreign currency fluctuations, is compared to the license and total revenues of the comparable prior year period, as reported, in calculating license and total revenue growth in constant currency. Unearned license revenues and unearned total revenues at the end of the period, derived from non-u.s. dollar transactions recorded during the current period, were adjusted for foreign currency fluctuations using the exchange rates that were effective in the comparable prior year period. Unearned license revenues and unearned total revenues, adjusted for foreign currency fluctuations at the end of the period, are compared to unearned license revenues and unearned total revenues at the beginning of the period, as reported, in determining the sequential change in unearned revenues VMware Inc. All rights reserved. 33