VMware Inc. (VMW): Smaller Guidance, More Opportunities


According to an interview on CNBC with Patrick P. Gelsinger, the CEO of VMware Inc. (NYSE:VMW), a company specialized in developing cloud and virtualization software and services, his company has increased its total addressable market estimate to about $16 billion by 2017 and announced a series of new products. However, it brought the announcement of halting guidance for 2016 and 2017.


“We didn’t take down guidance. […] We created a framework for how to think about 15 [2015] and we heard from a number of analysts that we had given multi-year guidance and that wasn’t consistent with how other companies provided guidance before. […]” Patrick P. Gelsinger commented.

Consequently, the numbers that appear in the VMware Inc. (NYSE:VMW) guidance data for the years 2016 and 2017 are deemed to be imprecise up until they will be reanalyzed and recalculated. Analysts seemed to have supported the decision, but they weren’t impressed with the values initially disclosed by the company.

The competition is tough in the IT sphere and many firms struggle to attain market share in cloud computing. Constantly new products appear, many of which directly affect VMware Inc. (NYSE:VMW) overall performance. Several innovations were announced (among which OpenStack and Cotainers) and they act as alternatives to the company’s core technology. This might indicate that the company acknowledges emerging competitive threats to be addressed or it might be a sign of diversification.

“Containers are very new technologies and we worked with other key companies in the areas to add those parts to the VMware stack. […] We call this the power of “and”, new tools and the best infrastructure coming together to expand our growth opportunity.” uttered Patrick P. Gelsinger.

Overall, difficult periods are to be faced by the IT giant and doubts are to be dissipated, thus there is a lot of work ahead of VMware Inc. (NYSE:VMW). However, if they manage to bring to customers the promised leading quality infrastructure with high performance tools, success will not ignore them.

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