VMware freezes hiring, offers gloomy outlook

Despite posting a 32 per cent climb in revenue, VMware has frozen hiring as it offered a gloomy outlook for the rest of the year.

This is the first set of results the virtualisation firm has posted since Paul Maritz replaced the ousted founder Diane Greene as chief executive, but it is likely that it is the economy weighing more heavily than any internal upheaval.

Maritz told a conference call last night that VMware would freeze hiring through the next quarter and likely into 2009. "VMware is coming off a period of very rapid growth, so it's a healthy thing in any case to take stock and make sure we have people focused on the right areas," Maritz said.

He added: "We'll suspend new hiring except for important and strategic hires We'll continue this into the fourth quarter, and frankly into 2009 as well."

Revenue climbed to $427 million, up 32 per cent from the same quarter last year. International growth hit 42 per cent, driven by a strong performance in Europe, while revenues in the US grew 24 per cent.

"VMware had another solid quarter, despite the challenging economic environment," said Maritz.

The virtualisation firm's fortunes have been slipping, however. Last quarter, VMware posted a 54 per cent jump in quarterly revenue, with growth hitting 69 per cent and 80 per cent in the previous quarters.

For more on VMware's slipping fortunes, click here to read our feature.

Still, the economic concerns could be helping the firm, with its cost-cutting virtualisation technology, he noted. "As commercial and government organizations are increasingly forced to do more with less, they're moving VMware to the top of their short list of strategic priorities." Maritz said.

Despite such possibilities, VMware gave a less-than-enthusiastic outlook, maintaining its revenue guidance for the year at 42 to 45 per cent over last year, but warning that it was likely to come in at the lower end of that range.

Martiz also said that client virtualisation management tool VMware View 3.0 would be released this quarter, and said "significant deliveries" were expected next year.

At its annual conference VMworld earlier this year, the firm announced a move to the cloud, with plans to bring virtualisation to the desktop and to release a virtual data centre product.