While IBM fires, VMware continues to hire

When a globally established firm does this, it is a clear sign that we all ought to realize that VMware has truly captured the imagination and data centers of us all. Here’s Fool’s report:

Here’s the evidence:

• $456 million in revenue, flat year-over-year. (Boring!)
• Pro forma earnings of $0.20 per share, down from $0.23 per share a year ago. (You call that progress? Maybe for a lobster.)
• $198.7 million in free cash flows, a 129% annual increase. (Now I get it!)
• A 3% increase in headcount during the quarter. (All right, you don’t have to rub it in.)

So while IBM (NYSE: IBM) is celebrated for growing earnings amidst massive job cuts and even Google (Nasdaq: GOOG) seems to have joined the cost-cutting party, VMware is hiring new people to make sure that its future business growth has the fuel and fire it needs. And the company sure can afford to spend a little money now to make a lot of money later.

And I do believe that what VMware is doing is the best course of action. Virtual computing is still in its infancy, and even though VMware has the first-mover advantage our Rule Breakers team loves so much, the company is under attack from well-heeled giants like Microsoft (Nasdaq: MSFT) and Oracle (Nasdaq: ORCL). Even if VMware’s virtual server platform is better than the competition — which seems to be the case — nobody will buy it if you’re not spreading the word to potential buyers.

For this reason, when I look at the marketing expense item for a company in a hot sector like virtualization, I don’t see a number. I see a gas pedal.

Source

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