VMWARE CLOUD INDEX 2013: STUDY SHOWS IT DRIVING BUSINESS TRANSFORMATION IN ASIA

IT now a known change enabler – opportunity for the Software-Defined Data Center to drive vision of IT as service broker

SINGAPORE, 24 October 2013 – VMware Inc. (NYSE: VMW), the global leader in virtualization and cloud infrastructure, announced the findings of the VMware Cloud Index 2013 study today. Launched under the company’s Virtualization 2020 campaign aimed at preparing companies for the next era of IT and business transformation, the 4th annual VMware Cloud Index was conducted by Forrester Consulting and revealed three key trends across 12 countries in the Asia Pacific region: the rise of IT as a change enabler in business; the growing focus on the software-defined approach in the mobile cloud era; and the need for IT to become a service broker.

1. The Rise of IT as a Change Enabler in APJ
   Organizations in Asia Pacific are increasingly looking to cloud or as-a-service approaches to accelerate business transformation. The VMware Cloud Index 2013 found that 65 percent agree that cloud or ‘as-a-service’ approaches will help their organization compete more effectively in the marketplace with almost a third (30 percent) saying cloud or ‘as-a-service’ approaches are a top priority for their organization and significantly impacts business transformation. Additionally, 84 percent see it enabling their organization to optimize their existing IT efficiency and effectiveness.

   Asia Pacific has reached a significant level of cloud maturity, with 72 percent saying they have already deployed or are planning to deploy cloud-related initiatives in the next 12 months. This suggests that the region is ready for the next phase of IT transformation to prepare for the mobile cloud era.

   The study also pointed to a marked change in the perception of IT, with 78 percent of respondents responding that IT is viewed as a change enabler and source of business value to the organization.

   “The Asia Pacific region is showing signals that it’s ready to enter the new era of IT and drive business transformation through IT transformation,” said Sanjay Mirchandani, senior vice president and general manager, VMware Asia Pacific & Japan. “The next era in Asia Pacific will be defined by a mobile-cloud and software-defined approach that is tightly connected to delivering business value.”

2. The Software-Defined Approach in the Mobile Cloud Era
   While the perception of IT in remains positive, 64 percent of companies revealed that their business units would still go around IT in order to source technology or business applications directly. Additionally, 80 percent of respondents agree that IT must more quickly and cost-effectively provision services to the business or risk getting marginalized.

   IT departments however, are facing pressures of their own, with 50 percent indicating that internal resistance to change was hindering their organization’s adoption of cloud computing. In addition, 53 percent agree that their companies have concerns deploying strategic or mission-critical applications to a public cloud and 61 percent say that data residency and compliance requirements will have a significant impact on their organization.

   Overall, IT departments agree (67 percent) that a software-defined approach to implementing and managing datacenter resources (servers, storage, networks) will create a significant impact on how they enable change in their organizations over the next two to three years.

   “The software-defined data center is the IT architecture for the mobile cloud era, and can help IT realign and help drive business transformation across the region,” Mirchandani said. “During the past 12 months, we have created an advanced architecture for private, hybrid and public clouds where compute, network and storage infrastructure is fully virtualized and the control of this data center is automated by software.”

   The study asked specifically about IT priorities in storage and networking, foundational components for software-defined IT. Nearly three-quarters of survey respondents (72 percent) flagged meeting networking performance within their IT organization as a high priority, with 71 percent eager to deliver a flexible and agile networking platform for their businesses over during the next 12 months. Similarly, time-to-delivery and availability trump performance when it comes to storage with 73 percent saying that fast provisioning and zero downtime is their highest priority.

   “It is clear from the VMware Cloud Index 2013 that a software-defined approach is disrupting the industry, but also providing tremendous opportunity and growth prospects for both IT departments and the ecosystem in general to add value to organizations and grow businesses,” said Michael Barnes, Vice President & Research Director, Forrester Consulting.

3. IT becoming a service broker
   The software-defined approach is will help better enable IT to become a service broker to the lines of business in their organizations. A majority (62 percent) agreed that provisioning services or capacity on demand by enabling self-service access to IT resources and capabilities was important to business and/or IT operational improvements.

   The study revealed that there needs to be an improvement in the delivery of IT services, a simplify management of IT environments and increase transparency into the cost of IT services. The importance of management is underscored by the high rate of respondents (62 percent) who agreed that if their company doesn’t improve the way they deliver or ‘provision’ services to the business, then they will risk falling behind their competitors. Also, 72 percent agreed that Cloud and ‘as-a-service’ approaches will help their organization become more efficient and operate with leaner IT resources.

   The VMware Cloud Index 2013 revealed that only 55 percent of respondents currently have operations management for virtualized workloads in their organization. Only 15 percent have a single solution that spans across all workloads, while 19 percent currently do not have operations management for virtualized workloads but are interested in a single solution.

   “IT organizations must arm themselves with the tools and insight that enable them to serve as a strategic business partner. VMware cloud management solutions enable IT to evolve into service brokers with confidence while helping to deliver increased levels of IT efficiency, agility, control and choice,” said Mirchandani.

   In a separate announcement at VMworld^® Europe 2013, VMware launched a new product offering and improvements across its cloud management product portfolio to help customers accelerate the delivery of IT services, simplify management of their IT environments, and increase transparency into the cost of IT services.

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About the VMware Cloud Index
The VMware Cloud Index 2013 is an Asia-Pacific-wide study conducted by Forrester Consulting. Now in its 4th annual edition, the 2013 survey surveyed 2,785 senior IT practitioners across the region in 12 countries (Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand, and Vietnam. The survey was conducted in July 2013.

About VMware
VMware is the leader in virtualization and cloud infrastructure solutions that enable businesses to thrive in the Cloud Era. Customers rely on VMware to help them transform the way they build, deliver and consume Information Technology resources in a manner that is evolutionary and based on their specific needs. With 2012 revenues of $4.61 billion, VMware has more than 500,000 customers and 55,000 partners. The company is headquartered in Silicon Valley with offices throughout the world and can be found online at www.vmware.com.

VMware is a registered trademark or trademark of VMware, Inc. in the United States and other jurisdictions. The use of the word “partner” or “partnership” does not imply a legal partnership relationship between VMware and any other company.

Forward-Looking Statements
This press release contains forward-looking statements including, among other things, statements regarding the expected demand for and adoption of cloud computing and "as-a-service" approaches in the Asia Pacific region, their potential benefits to customers and the role of VMware solutions in addressing future customer needs and requirements. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to (i) changes to priorities and levels of government spending; (ii) adverse changes in general economic or market conditions; (iii) delays or reductions in information technology spending; (iv) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into the virtualization and cloud computing markets, and new product and marketing initiatives by our competitors; (v) our customers’ ability to develop, and to transition to, new products and computing strategies such as cloud computing; (vi) the uncertainty of customer acceptance of emerging technology; (vii) rapid technological and market changes in virtualization software and platforms for cloud and desktop computing; (viii) changes to product development timelines; (ix) VMware’s ability to protect its proprietary technology; and (x) VMware’s ability to attract and retain highly qualified employees.. These forward looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K that we may file from time to time, which could cause actual results to vary from expectations. VMware assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.

Media Contacts:

Yasmin Ramle Edelman PR for VMware yasmin.ramle@edelman.com +65 6494 1571 office

Geoff Kelly Director, Communications VMware gkelly@vmware.com +65 6501 2025 office