VMware 2015 Annual Report Download - page 90

Download and view the complete annual report

Please find page 90 of the 2015 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 106

  • 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

TableofContents
VMware, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Transactions with EMC
VMwareandEMCengagedinthefollowingongoingintercompanytransactions,whichresultedinrevenuesandreceiptsandunearnedrevenuesforVMware:
• PursuanttoanongoingresellerarrangementwithEMC,EMCbundlesVMware’sproductsandserviceswithEMC’sproductsandsellsthemtoendusers.
• EMCpurchasesproductsandservicesfromVMwareforinternaluse.
• VMwareprovidesprofessionalservicestoendusersbaseduponcontractualagreementswithEMC.
• Fromtimetotime,VMwareandEMCenterintoagreementstocollaborateontechnologyprojects,andEMCpaysVMwareforservicesthatVMware
providestoEMCinconnectionwithsuchprojects.
• Pursuanttoanongoingdistributionagreement,VMwareactsasthesellingagentforcertainproductsandservicesofPivotalSoftware,Inc.(“Pivotal”),a
subsidiaryofEMC,inexchangeforanagencyfee.Underthisagreement,cashiscollectedfromtheenduserbyVMwareandremittedtoPivotal,netof
thecontractualagencyfee.
• VMwareprovidesvariousservicestoPivotal.SupportcostsincurredbyVMwarearereimbursedtoVMwareandarerecordedasareductiontothecosts
incurredbyVMware.
InformationaboutVMware’srevenuesandreceiptsfromsucharrangementswithEMCduringtheyearsendedDecember31,2015,2014and2013and
unearnedrevenuesasofDecember31,2015and2014consistedofthefollowing(tableinmillions):
Revenues and Receipts from EMC
Unearned Revenues from
EMC
For the Year Ended December 31,
As of December 31,
2015
2014
2013
2015
2014
Resellerrevenues $ 301
$ 205
$ 141
$ 292
$ 290
Internal-userevenues 17
21
32
11
18
Professionalservicesrevenues 100
85
72
3
9
Collaborativetechnologyprojectreceipts —
—
7
n/a
n/a
Agencyfeerevenues 6
5
5
—
—
ReimbursementforservicestoPivotal 4
2
12
n/a
n/a
VMwareandEMCengagedinthefollowingongoingintercompanytransactions,whichresultedincoststoVMware:
• VMwarepurchasesandleasesproductsandpurchasesservicesfromEMC.
• Fromtimetotime,VMwareandEMCenterintoagreementstocollaborateontechnologyprojects,andVMwarepaysEMCforservicesprovidedto
VMwarebyEMCrelatedtosuchprojects.
• IncertaingeographicregionswhereVMwaredoesnothaveanestablishedlegalentity,VMwarecontractswithEMCsubsidiariesforsupportservicesand
EMCpersonnelwhoaremanagedbyVMware.ThecostsincurredbyEMConVMware’sbehalfrelatedtotheseemployeesarechargedtoVMwarewith
amark-upintendedtoapproximatecoststhatwouldhavebeenincurredhadVMwarecontractedforsuchserviceswithanunrelatedthirdparty.These
costsareincludedasexpensesonVMware’sconsolidatedstatementsofincomeandprimarilyincludesalaries,benefits,travelandrentexpenses.EMC
alsoincurscertainadministrativecostsonVMware’sbehalfintheU.S.thatarerecordedasexpensesonVMware’sconsolidatedstatementsofincome.
• Fromtimetotime,VMwareinvoicesendusersonbehalfofEMCforcertainservicesrenderedbyEMC.Cashrelatedtotheseservicesiscollectedfrom
theenduserbyVMwareandremittedtoEMC.
87