VMware 2013 Annual Report Download - page 45

Table of Contents
Beginning with the second quarter of 2013, substantially all revenues and costs associated with our contribution to Pivotal have been eliminated from our
consolidated statements of income. While the contribution to Pivotal has had a negative impact on our revenue growth rate compared to 2012, our 2013
operating margin has been positively impacted due to the elimination of Pivotal related costs from our consolidated statements of income.
Results of Operations
Revenues
Our revenues in the years ended 2013 , 2012 and 2011 were as follows:
License Revenues
License revenues in 2013 and 2012 were up 9% and 13% , respectively. Our revenue growth rate for both periods was due to overall increased global
sales volumes in all major geographies, slightly offset by the disposition of certain business lines under our realignment plan and the contribution to Pivotal.
During 2013, we expanded the sales of product suites, such as our vCloud suite, that integrate advanced management and automation features with our
vSphere cloud infrastructure platform and which are primarily sold through ELAs. Our growth in ELA volume across all geographies contributed to our
overall increase in license revenues during 2013 compared to 2012. The growth in our ELA business is also attributing, in part, to lower growth rates of our
non-ELA or transactional business.
Our revenue growth rate was negatively impacted by the contribution to Pivotal and the disposition of other net assets under our realignment plan.
License revenues related to Pivotal and all dispositions under our realignment plan were $18 in 2013 and $56 in 2012.
Services Revenues
In 2013 and 2012, software maintenance revenues benefited from strong renewals, multi-year software maintenance contracts sold in previous periods,
and additional maintenance contracts sold in conjunction with new software license sales. In each year presented, customers bought, on average, more than
24 months of support and maintenance with each new license purchased, which we believe illustrates our customers’ commitment to VMware as a core
element of their data center architecture and hybrid cloud strategy.
In 2013 and 2012, professional services revenues increased as growth in our license sales and installed-
base led to additional demand for our professional
services.
Our revenue growth rate was negatively impacted by the contribution to Pivotal and the disposition of other net assets under our realignment plan.
Service revenues related to Pivotal and all dispositions under our realignment plan were $37 in 2013 and $143 in 2012.
Foreign Currency
We invoice and collect in the Euro, the British Pound, the Japanese Yen, the Australian Dollar and Chinese Renminbi in their respective regions. As a
result, our total revenues are affected by changes in the value of the U.S. Dollar against these currencies. Foreign currencies did not have a material impact
when comparing license revenues in 2013 and 2012 to their respective prior years.
43
For the Year Ended December 31, 2013 vs. 2012 2012 vs. 2011
2013 2012 2011 $ Change % Change $ Change % Change
Revenues:
License
$
2,270
$
2,087
$
1,841
$
183
9
%
$
246
13
%
Services:
Software maintenance
2,563
2,153
1,640
410
19
513
31
Professional services
374
365
286
9
2
80
28
Total services
2,937
2,518
1,926
419
17
592
31
Total revenues
$
5,207
$
4,605
$
3,767
$
602
13
$
838
22
Revenues:
United States
$
2,485
$
2,229
$
1,824
$
256
11
%
$
404
22
%
International
2,722
2,376
1,943
345
15
434
22
Total revenues
$
5,207
$
4,605
$
3,767
$
602
13
$
838
22