VMware 2013 Annual Report Download - page 9

Table of Contents
collaboration and co-development. We create opportunity for partners by enabling them to build products that utilize our virtualization technology and create
differentiated value through joint solutions.
We have more than 1,200 technology partners with whom we bring joint offerings to the marketplace and over 11,500 Service Provider partners. We
classify our partners as follows:
The VMware Technology Alliance Partner program facilitates joint solution creation and coordinated go-to-market activities with our partners. Over
4,500 of the most widely used applications from ISVs support the VMware vSphere platform. These applications include business solutions for enterprise
resource planning, human resource management, electronic medical records management, financial processing and middleware, such as application servers
and databases. As an extension to this rapidly growing list, we have expanded our VMware Ready program to allow application software and desktop
solution providers to qualify for the VMware Ready logo. The VMware Ready Desktop Solutions program validates the reference architecture and desktop
specialization of solution providers that simplify VMware virtual desktop environments.
Our ISVs and other alliance partners, developers and additional VMware community members have distributed more than 1,600 software applications as
virtual appliances. We invest significant capital in testing and certification of infrastructure to rigorously ensure our software works well with major hardware
and software products. We have certified more than 10,000 servers, storage, I/O and thin-client devices that are VMware Ready. We have successfully tested
approximately 600 operating system versions for use with our solutions. We believe that the scale and scope of this effort is a significant competitive
advantage.
Pivotal Software, Inc. ( “ Pivotal ” )
In April 2013, VMware and EMC each contributed technology, people and programs to form a new venture, Pivotal Inc., a provider of application and
data infrastructure software, agile development services, and data science consulting. Pivotal is led by Paul Maritz, VMware's former Chief Executive
Officer, and now includes most employees and resources from EMC's former Greenplum and Pivotal Labs organizations and VMware's former vFabric
(including Spring and Gemfire), Cloud Foundry and Cetas organizations.
As of December 31, 2013, we maintained an approximately 28% ownership interest in Pivotal. We also act as the selling agent of the products and
services we contributed to Pivotal and provide Pivotal various transition services.
Research and Development
We have made, and expect to continue to make, significant investments in research and development (“R&D”). We have assembled an experienced
group of developers with system level, systems management, desktop, mobile devices, security, application development, collaborative applications,
networking, storage and open source software expertise. We also have strong ties to leading academic institutions around the world, and we invest in joint
research with academia.
We prioritize our product development efforts through a combination of engineering-driven innovation and customer and market-driven feedback. Our
R&D culture places high value on innovation, quality and open collaboration with our partners. We currently participate in numerous standards groups and
VMware employees hold a variety of standards organization leadership positions, including with the Distributed Management Task Force, the Standard
Performance Evaluation Corporation, the Open Networking Foundation and the Open Stack Foundation.
Our R&D expenses totaled $1,082 million , $999 million , and $775 million in 2013, 2012 and 2011, respectively. No R&D costs were capitalized in
2013 and 2012. We capitalized $86 million of R&D costs, including stock based compensation costs, that were in addition to our R&D expenses in 2011.
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• Independent Hardware Vendors (“IHVs”). We have established relationships with large system vendors, including Cisco, Dell, Fujitsu, Fujitsu-
Siemens, HP, IBM, Lenovo and NEC for joint certification and co-development. We also work closely with AMD, Intel and other IHVs to provide
input on product development to enable them to deliver hardware advancements that benefit virtualization users. We coordinate with the leading
storage and networking vendors to ensure joint interoperability and enable our software to access their differentiated functionality.
• Independent Software Vendors (“ISVs”). We partner with leading systems management, infrastructure software and application software vendors
- including healthcare, telecom, finance and retail market leaders – to deliver value-added products that integrate with our VMware products.
• VMware Service Providers. We have established partnerships with over 11,500 service providers including AT&T, Bluelock, Colt, CSC, Dell,
Fujitsu, Hitachi, Optus, OVH, Rackspace, Sing Tel, Softbank and T-Systems to enable them to host and deliver enterprise-class hybrid clouds as a
way for enterprises to extend their datacenters to external clouds, while preserving security, compliance and quality of service.