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Pacific Crest Unimpressed With VMware's VMworld Conference

Pacific Crest is unimpressed with VMware, Inc. VMW 0.61%'s VMworld conference given a lack of major announcements and no incremental financial data.

Despite ramping emerging solutions mix, upcoming ELA renewals and $1.2 billion share buyback, the brokerage believes the company would continue to struggle mightily with compute and its relevancy in the public cloud.

Among the new announcements, the company revealed VMware Cloud Foundation that provides a unified deployment and management layer of vSphere, vSAN and NSX across any hybrid cloud environment.

In addition, the company's new Cross-Cloud Architecture is expected to lead to increased cloud agnostic services for managing applications and workloads across any footprint.

Moreover, VMware announced version 3 of its OpenStack integrated suite of solutions with support for OpenStack version Mitaka.

"Version 3 offers improved functionality for cloud admins and IT administrators," analyst Rob Owens wrote in a note.

Owens noted that NSX gained solid traction at the conference, especially with smaller companies appearing to do proof of concepts and some moving into production environments.

"While more work to reduce NSX complexity continues to be needed, in our view, our checks point to the potential for NSX to reach more mainstream adoption in both security microsegmentation and networking," Owens continued.

In addition, the analyst still sees vSAN ramping in conjunction with hyperconverged appliances and end-user computing.

That said, Owens maintained his Sector Weight rating on the stock as he wait for signs of emerging solutions driving growth before becoming more constructive on shares.

Aug 2016SunTrust Robinson HumphreyUpgradesNeutralBuy
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