VMware has insisted it can win back a massive IT deal with the US government after the latter was forced to cancel following protests from VMware rivals.
In March, CRN's sister site Channelnomics reported that VMware lost out on a $1.6bn (£1.06bn) deal with a US defence body after rivals such as Amazon Web Services, Citrix and Nutanix filed bid protests. It is understood the trio kicked up a fuss because they were not invited to bid.
As a result, the US government cancelled its request for proposal (RFP) while it investigated the protests.
On a Q1 earnings call last night, VMware's chief operating officer Carl Eschenbach opened up on the contract loss and said he was optimistic it can claw it back.
"As most of you guys know, the government did release an RFP that was specific to VMware for a large ELA that would cover multiple agencies," he said on an earnings call, transcribed by Seeking Alpha.
"In the end they decided to cancel the ELA due to a number of protests that came in against this large contract. They have indicated they are intending to move forward with the VMware ELA after they evaluate all the protests."
He said although the saga has been drawn out, the controversy around the deal did not affect Q1 results.
"We didn't necessarily control the timing... of this ELA," he conceded. "That's something the government controls. And that is [why] we sit here three quarters later talking about this opportunity. With that being said, we continue to work with all the different agencies across the federal government. Some of them could participate in the ELA if it came out and it was closed and some may decide not to.
"We never let a quarter or our guidance be dependent on a specific or a single deal. Despite the ELA not coming to fruition in Q1, we had a very good quarter in federal, growing the business in the mid-teens. So we continue to power along."
For the three months to 31 March, net profit at VMware fell 1.5 per cent annually to $196m on revenue which over the same period grew 11 per cent to $1.51bn.
Eschenbach pointed to Airwatch as a star performer during the quarter and said the channel did well too.
"AirWatch continues to deliver against all of our metrics that we have internally," he said. "That acquisition is paying off in spades. And [with] vCloud Air and the vCloud Air Network, the partners that we have continue to perform as we expect, and we're pleased with the solid start of the year."
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