VMware's investments in leading edge data center and cloud technology are paying off it sees strong growth in those areas, and the potential for even stronger growth in the coming months.
VMware CEO Pat Gelsinger and CFO Zane Rowe also told financial analysts during the company's fiscal 2016 fourth-quarter conference call on Thursday that the company has laid a strong foundation for a successful long-term partnership with Amazon Web Services (AWS).
Gelsinger said VMware's hyper-converged infrastructure business is leading the market, and is not in the least bit threatened by Hewlett Packard Enterprise's planned acquisition of SimpliVity.
VMware shares rose around 4 percent in after-hours trading.
VMware's fiscal 2016 ended on December 31, and its fiscal year 2018 will start on February 4. Fiscal year 2017, from January 1 to February 3, will be a "stub year," the company said, as it changes to fiscal year bookkeeping.
The new strategic relationship between VMware and Amazon to allow VMware software-defined data center workloads run natively on Amazon Web Services was unveiled in October, and development of the VMware Cloud and VMware's Cross-Cloud Services for AWS is going as expected, Gelsinger said.
While customer response has been "overwhelming" so far, VMware expects no immediate material revenue from the relationship in fiscal year 2018, Gelsinger said.
"[But] strategically, it has an immediate impact on our business," he said. "Customers say, 'Oh, I get it. I can continue with my existing technology.'"
Public cloud is clearly a part of enterprise customers' strategy, but customers look at the performance, cost, and governance issues and know the move to public clouds will not happen overnight, which means hybrid cloud will continue to be the focus of customers for the foreseeable future, Gelsinger said.
Fourth quarter finished off a really strong year for VMware's NSX software-defined networking technology, Gelsinger told analysts. VMware had about 2,400 NSX customers by year-end 2016, or double the customer count of late 2015 and is now enjoying a $1-billion-plus run rate, he said.