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Table of Contents
VMWARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
services sold by VMware. In addition, VMware employees currently participate in EMC’s 401(k) plan which is administered by Fidelity
Investments, an affiliate of FMR LLC. EMC may cross-charge VMware for the costs associated with VMware employees under the
intercompany agreements. Transactions with FMR LLC were not material to VMware’s 2007 consolidated financial statements.
In 2007, VMware entered into an agreement to license software from Softrax Corporation (“Softrax”). A member of the Company’s Board
of Directors is a managing partner and general partner in a limited partnership which has an equity interest in Softrax of greater than 10%. The
amounts expensed or paid to Softrax in 2007 were not material to VMware’s consolidated financial statements.
L. Segment Information
VMware operates in one reportable segment in accordance with the provisions of FAS No. 131 “Disclosures about Segments of an
Enterprise and Related Information.” Operating segments are defined as components of an enterprise about which separate financial information
is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The chief
operating decision maker is the President and Chief Executive Officer. VMware operates in one segment, therefore all financial segment
information required by FAS No. 131 can be found in the consolidated financial statements.
Revenues by geographic area are as follows (table in thousands):
Long-lived assets in the United States at December 31, 2007, 2006 and 2005 were $236.5 million, $40.6 million and $17.0 million,
excluding goodwill, intangible assets, net and capitalized software of $679.4 million, $653.4 million, and $613.4 million, respectively, as well as
financial instruments and deferred tax assets. Long-lived assets internationally at December 31, 2007, 2006 and 2005 were $22.8 million, $5.2
million and $1.0 million, excluding goodwill, intangible assets, net and capitalized software of $79.0 million, $0.3 million and $0 million,
respectively, as well as financial instruments and deferred tax assets. No country other than the United States accounted for 10% or more of these
assets at December 31, 2007, 2006 or 2005.
VMware groups its products into portfolios that are categorized into the following classes:
Virtualization Platforms Products . The Company’s virtualization platforms include a hypervisor for system partitioning that provides the
capability to safely, securely and efficiently run multiple operating systems simultaneously on the same physical machine. The platforms
products include VMware Player, VMware Workstation, VMware Server, VMware ESX Server, VMware Virtual SMP, VMware VCB and
VMware VMFS products.
Virtual Infrastructure Management and Automation Products . The Company’
s virtual infrastructure management and automation products
utilize the unique benefits of its virtualization platforms to automate system infrastructure services, such as resource management, availability,
mobility and security, manage a virtualized environment and automate the interaction between various IT constituencies and the virtual
infrastructure for a specific set of point solutions. They include VMware ACE, VMware HA, VMware DRS,
88
For the Year Ended December 31,
2007
2006
2005
United States
$
720,620
$
391,614
$
209,600
International
605,191
312,290
177,474
Total
$
1,325,811
$
703,904
$
387,074