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Is Digitization Helping VMware’s Business?

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Moving from hardware to cloud

VMware (VMW) continues to gain from the ongoing trend of digitization across various industries. The company has also extended its service from network virtualization to virtual storage, virtual management, and virtual infrastructure automation.

The company’s shifting of its on-premises data warehouse to the cloud platform is creating new opportunities for it. However, the move is also bringing a new set of challenges.

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To counter such challenges and to tap the existing opportunity, the company has introduced VMware Cloud Foundation, an integrated SDDC (software-defined data center) suite that’s made up of products such as vSphere, vSAN (virtual storage area network), and NSX. These products support better cloud infrastructure for both private and public clouds.

VMware has formed a strategic alliance with Amazon (AMZN) Web Services to offer an integrated hybrid cloud solution. The company has also teamed up with IBM (IBM) to provide better security and software support to its clients in the cloud.

The company’s transformation of its business is well reflected in its top line growth. In the graph above, we can see the revenue growth of the company’s License unit over the last five quarters. During the period, its revenue has increased at a compound annual growth rate of 4.8%.

Four-step solution

VMware has also formulated four key goals to boost its performance going forward. Its first goal is to modernize its client data center, and its second is to combine the public cloud into its daily operations. Its third goal is to convert both its networking and security structures, and its fourth is to change the digital workspace.

This four-step strategy will likely be quite beneficial to its clients’ businesses in terms of driving growth.

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