VMware 2010 Annual Report Download - page 52

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Table of Contents
Operating Expenses
Cost of license revenues
Our cost of license revenues principally consists of the amortization of capitalized software development costs and of intangibles, as well
as royalty costs in connection with technology licensed from third-party providers and the cost of fulfillment of our software. The cost of
fulfillment of our software includes product packaging, personnel costs and related overhead associated with the physical and electronic delivery
of our software products.
Cost of services revenues
Our cost of services revenues includes the costs of personnel and related overhead to deliver technical support for our products and to
provide our professional services.
Research and development expenses
Our research and development (“R&D”) expenses include the personnel and related overhead associated with the research and
development of new product offerings and the enhancement of our existing software offerings, net of amounts capitalized.
Sales and marketing expenses
Our sales and marketing expenses include personnel costs, sales commissions and related overhead associated with the sale and marketing
of our license and services offerings, as well as the cost of product launches and certain marketing initiatives, including our annual VMworld
conferences in the U.S. and Europe. Sales commissions are generally earned and expensed when a firm order is received from the customer and
may be recognized in a period different than the period in which the related revenue is recognized.
General and administrative expenses
Our general and administrative expenses include personnel and related overhead costs to support the overall business. These expenses
include the costs associated with our facilities, finance, human resources, IT infrastructure and legal departments.
Results of Operations
Revenues
Our revenues for the years ended 2010, 2009 and 2008 are as follows:
49
For the Year Ended December 31,
% Change
2010
2009
2008
2010 vs. 2009
2009 vs. 2008
Revenues:
License
$
1,401.4
$
1,029.4
$
1,178.1
36
%
(13
)%
Services:
Software maintenance
1,217.0
823.8
555.9
48
48
Professional services
238.9
170.7
147.0
40
16
Total services
1,455.9
994.5
702.9
46
41
$
2,857.3
$
2,023.9
$
1,881.0
41
8
Revenues:
United States
$
1,452.7
$
1,039.0
$
987.6
40
%
5
%
International
1,404.6
984.9
893.4
43
10
$
2,857.3
$
2,023.9
$
1,881.0
41
8