VMware 2010 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 2010 VMware annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 149

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149

Table of Contents
Customers
Our customer deployments range in size from a single virtualized server for small businesses to up to thousands of virtual machines for our
largest enterprise customers. In periodic third-party surveys commissioned by us, our customers indicate very high satisfaction rates with our
products and many have indicated a strong preference for repeat purchases.
During 2010, three distributors, who purchase software licenses and software support from us for resale to end-user customers directly or
via resellers, each accounted for over 10% of our worldwide revenues. Arrow Electronics, Inc., Ingram Micro, Inc. and Tech Data Corporation
accounted for 13%, 11% and 10%, respectively, of our worldwide revenues in 2010. Our distribution agreements are typically terminable at will
by either party upon 30 to 90 days’ prior written notice to the other party, and neither party has any obligation to purchase or sell any products
under the agreement. No other channel partner accounted for more than 10% of our revenues in 2010.
Competition
The cloud computing and virtualization markets are inter-related and rapidly evolving. We experienced increased competition during 2010
and expect it to significantly intensify in the future. We compete with large and small vendors in different segments of the cloud computing and
virtualization markets, and expect new entrants will continue to enter the market and develop technologies that, if commercialized, may compete
with our products.
We believe that the key competitive factors in the cloud computing and virtualization markets include:
The cloud computing market is in a high state of flux with both established and new technology companies vying for thought leadership
and market share. Currently, Amazon EC2, Microsoft Azure and emerging open source efforts present alternatives to VMware’s hybrid cloud
computing vision.
Microsoft is also our primary competitor for data center virtualization solutions. In 2010, Microsoft continued to release incremental
improvements to its Hyper-V virtualization offering and System Center suite of virtualization management products. Microsoft’s offerings are
positioned to compete with our virtual infrastructure, virtualization management and some of our free data center product offerings.
9
•
the level of reliability and new functionality of product offerings;
•
the ability to provide comprehensive solutions, including management capabilities;
•
the ability to offer products that support multiple hardware platforms, operating systems, applications and application development
frameworks;
•
the ability to deliver an intuitive end
-
user experience for accessing data, applications and services from a wide variety of end
-
user
devices;
•
a proven track record of formulating and delivering a roadmap of compelling software and service capabilities;
•
pricing of products, individually and in bundles;
•
the ability to attract and preserve a large installed base of customers;
•
the ability to attract and maintain a large number of application developers for a given cloud ecosystem;
•
the ability to create and maintain partnering opportunities with hardware vendors, infrastructure software vendors and cloud service
providers;
•
the ability to develop robust indirect sales channels; and
•
the ability to attract and retain cloud, virtualization and systems experts as key employees.