The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK ( TheStreet) -- The new buzzword of all buzzwords these days is "cloud computing." While not entirely a new concept, there are many companies racing and jockeying to be the first to either define or "re-define" what it means.
As you can imagine, it gets a bit complicated. It is broadly understood that "the cloud" means "the Internet." Think about it, when have you ever seen a network diagram demonstrating a route to the Internet that does not include a cloud clipart? It seems simple enough except when you couple it with the term "computing" -- an entirely new standard for activity that helps corporations deliver the level of services whether to their customers are internally within the enterprise.Follow TheStreet on Twitter and become a fan on Facebook. From that standpoint, there aren't many companies that do it as well as virtualization king VMware (VMW), much less better. As noted, the race for that tight space is pretty intense -- imagine a Nascar track where the cars are four-wide and bumper to bumper with one lap to go and no time to pit. In addition to VMware, the race includes names such as Microsoft (MSFT), Oracle (ORCL), Red Hat (RHT), EMC (EMC) and of course Salesforce.com (CRM). These are just a few of the software players in this space. We have not even mentioned search giant Google (GOOG) and hardware players like Hewlett-Packard (HPQ). As an investor, the challenge is trying to figure out which companies stand to benefit more than others by producing solid market-beating performances. At the top of my short list is VMware. The company helped affirm my analysis as it reported first-quarter earnings that topped analyst estimates, yet again.
The Quarter That WasLast Wednesday, the company reported Q1 earnings and revenue that beat analyst expectations due to improvements in demand for cloud services. The company reported an increase in revenue of 25% as well as a 15% increase in license revenue from the same period of a year ago. What I thought was remarkable was that not only did its operating margin for the quarter arrived over 32% on a non-GAAP basis, but the company also logged an impressive 53% increase in trailing free cash flow -- one that registered at $2.1 billion.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV