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Why VMware Is Teaming Up with Microsoft

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The partnership

On September 25, VMware (VMW) announced a strategic alliance with Microsoft (MSFT) to incorporate its NSX SD-WAN (network virtualization software-defined wide area network) with Microsoft Azure Virtual WAN. Thus, customers from different branch locations can use the VMware NSX SD-WAN and VMware NSX data center to easily gain access to the Azure cloud platform.

With the implementation of Virtual NSX SD-WAN Edges on Azure, different organizations can easily get connected with the virtual WAN through the NSX SD-WAN hosted gateways. Thus, the deployment of NSX SD-WAN in different branch locations of an organization could boost efficiency by speeding up tasks through automated business activities and enhanced application control.

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Past cloud partnership deal

In October 2016, VMware joined forces with the leading public cloud service provider, Amazon (AMZN). The partnership helped the company boost its presence in the EMEA (Europe, Middle East, and Africa) and Asia-Pacific regions. More than 150 partners enrolled in the VMware Cloud and AWS partner program. Likewise, in 2016, the company also expanded its partnership with IBM (IBM) to gain access to its hybrid cloud platform.

The chart above shows the quarterly revenue growth of VMware in the last five quarters. It has maintained double-digit growth driven by the strong demand for its cloud business across enterprises. During the period, the company’s revenues grew at a CAGR (compound annual growth rate) of 3%.

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