I’m very excited that I get the opportunity to report on another exceptional quarter for VMware NSX. As a company, we’re demonstrating that NSX will be an important growth driver for the foreseeable future. We added more than 200 new NSX customers in the quarter, and have more than 120 customers that have spent more than $1M on NSX. Organizations such as Shutterfly, TriZetto, Riverside County, and Royal Bank of Scotland are all making commitments to NSX as a foundational part of their IT future. Production deployments also continued to accelerate. We have more than 340, and in Q1 added the equivalent of one new NSX production deployment each day.
NSX is, indisputably, the leading software network overlay. NSX is proving equally valuable across all hardware underlays. Most notably, we’re starting to see customer proof points of something we’ve said all along – VMware NSX and Cisco ACI can be successfully deployed in the same environment to address different pain points. Just look at customers such as Sugar Creek and Hutto ISD; even the channel recognizes this as reported by CRN.
Executing On the NSX Plan, Reaching the Turning Point
The plan for growing NSX in the market was very clear and prescriptive from the start. We would start small with leading edge customers and partners who would help us learn quickly about where, how and why customers would adopt NSX. In the early days, we truly believed the value proposition of NSX was simple – to improve IT agility and take application deployment times for leading companies such as eBay from months to minutes. Would that match the market reality? It did, and more. We created a closed feedback loop with customers to advance and evolve the NSX platform, identified must-have capabilities and fleshed out our roadmap. This too has been a phenomenal success.
What proved to be the turning point for accelerating NSX adoption was when customers – not sales or marketing – identified the power of NSX for micro-segmentation. This customer-led use case was something that had long been sought after, but could not be achieved without significant financial and operational burdens.
Signs of the Tipping Point
Today, micro-segmentation continues to be a dominant use case for NSX, but the NSX story has evolved be to include increasing adoption by customers to improve IT agility and application continuity. I am now seeing three signs that we are about to move from the turning point to the tipping point for NSX.
- New Customers Are Quickly Going from POC to Production
As I mentioned, starting in Q1 we are adding the equivalent of one new production customer each day. Much of this can be attributed to our work with early customers in offering the tools, materials and talent to help get customers up and running. We’re even seeing customers such as Hutto ISD actually self-install NSX, with minimal support from VMware or a reseller, and be successful. This is a sign of maturity in the product and availability of the right resources to help customers move quickly.
- Existing Customers Are Increasingly Coming Back For Repeat Purchases
We are seeing more and more return customers each quarter. What this shows is customers are both scaling their original deployment, which may have been a small test case, and also expanding beyond the original use case into multiple use cases. So while a customer may have started with micro-segmentation for regulated workloads, they are expanding their application of micro-segmentation to all work loads and/or building out NSX deployments for both IT Automation and Application Continuity within and across data centers.
- Channel Partners are starting to lead deals rather than simply fulfill them
VMware’s partner bookings were up 100% year over year and deal registrations increased 4x year over year. Channel adoption is always a good indicator or a products maturity. Channel partners want solutions around which they can create sustained, repeatable sales motions. They need products that deliver on their promise, with minimal challenges. The VMware channel opportunity is accelerating, and partners see the opportunity.
New Ways to Help Customers Start Their VMware NSX Journey
We believe NSX has relevance to virtually any IT environment in one way or another, and to that end we are announcing some additions to our NSX offerings. To better align with our customers’ diverse set of requirements, VMware NSX is now available as three offerings: Standard, Advanced and Enterprise. For more information on the Standard, Advanced, and Enterprise offerings, please visit VMware.com here.
Customers adopt VMware NSX because they want the agility, efficiency and security of the software-defined data center. They want to bring the benefits they have with compute virtualization to the entire data center. Virtualizing the network has helped move the SDDC from concept to reality.
Along the way, have worked with customers on understanding organizational and operational issues as they enter a new Era of IT. What we’ve been successful in showing is that NSX is not a technology that requires IT transformation before you can adopt it; rather NSX is the enabler to IT transformation that must take place for organizations to succeed in the future.
NSX is serving as a catalyst to help IT organizations break down silos and better align to meet the requirements of the business.
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