VMware slides on guidance change; VMworld news keeps flowing


VMware (VMW -2.8%) investors haven't taken kindly to the company's guidance for mid-teens 2015 revenue growth, and its pulling of long-term guidance for 16%-20% annual growth.

William Blair (Market Perform) calls the guidance "disappointing," and is worried ongoing "workload migration to the public cloud will be a persistent headwind" to VMware's core vSphere server virtualization sales.

The firm also thinks several growth initiatives could take longer to play out than expected - it notes the NSX SDN platform is still less than 2% of total bookings, and expects the just-renamed vCloud Air cloud infrastructure platform to have a tough time competing against the likes of Amazon and Rackspace. Blair is more upbeat about vCloud Suite and VSAN sales.

UBS (Buy) is still positive, arguing R&D investments in newer products are bearing fruit, and that standalone vSphere weakness stems from a shift in sales resources to other products. Cowen (Outperform) thinks it's business as usual. "We have previously expressed much skepticism about the previous forecast, and we believe [management's] action was appropriate."

Meanwhile, VMworld announcements continue. Today, VMware has: 1) Unveiled the Workspace Suite, which offers combined access to the Horizon PC/app virtualization platform and AirWatch's mobile management platform. 2) Announced a partnership with Nvidia and Google to deliver graphics-rich apps (via PC virtualization) to Chromebooks. 3)  Announced a deal with SAP to integrate AirWatch's products with SAP's mobile security offerings.

Yesterday's VMware announcements: I, II

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