Enterprise software stocks hit by VMware's Q1 numbers


Plenty of enterprise software names have underperformed on a down day for tech stocks after VMware (VMW -9.2%) provided soft bookings numbers (sub-10% Y/Y growth in the Americas, EMEA, and Asia-Pac), and blamed it on delays in signing major enterprise licensing deals (ELAs) as it talks with clients about more expansive agreements.

VMware rivals Oracle (ORCL -1.6%), Citrix (CTXS -2.8%), and Red Hat (RHT -1.7%) are among the decliners. Others: CRM -2.5%. WDAY -5.6%. SPLK -6.3%. VEEV -4.3%. NOW -4.2%. TIBX -2.9%. INFA -2.2%. QLIK -3.2%.

Nomura (Buy) observes that while VMware reported 18% Y/Y billings growth, underlying growth may have been in the single digits after accounting for the AirWatch deal and other adjustments. Nonetheless, it thinks ELA weakness might be a seasonal issue that will correct in Q2.

Is competition taking a toll? In spite of the soft bookings figures, VMware managed to report strong licensing activity for products other than its core vSphere server virtualization platform, and noted on its CC (transcript) solutions other than standalone vSphere made up over 45% of license bookings (up from 30%+ a year ago).

Microsoft's Hyper-V has been gradually eating into vSphere's market dominance. Other cheaper alternatives such as the open-source Xen (backed by Citrix) and KVM have also been gaining ground.

From other sites
Comments (1)
  • omarbradley
    , contributor
    Comments (966) | Send Message
     
    this is a truly stupendous market bubble that is bursting (along with 3d printing, biotech's...solar plays seems okay interestingly.)

     

    the consumer will be a fantastic beneficiary of course as once all our data is moved to The Cloud you could seem some blazing fast internet speeds as "remote hosting" goes full on "mass of humanity."
    23 Apr 2014, 10:46 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs