Virtualisation market ruler VMware has announced lukewarm fourth quarter results and a drizzly forecast of just 50 per cent revenue growth for 2008 – compared to its run of nearly 100 per cent year-on-year growth over the last nine years.

The storage vendor finally fell off its pedestal with the announcement that it is failing to reach market expectations and both VMware and its investors came back down to earth with a share price tumble of more than 25 per cent.

Total revenues for the fourth quarter were $412m, an increase of 80 per cent compared to the year-ago quarter, and total revenues for the full fiscal year 2007 were $1.33bn, an increase of 88 per cent compared to 2006.

Diane Greene, chief executive of VMware, said: “VMware executed at a remarkable pace in 2007 as customer interest and partner attention increased several fold. We begin 2008 with more than 100,000 customers, 500 technology and consulting partners, nearly 10,000 go-to-market partners, and more than 5,000 employees.”

As the likes of software monster Microsoft and its alliance partner Citrix increase their presence on the virutalisation scene, VMware’s latest revenue forecasts suggest it is struggling to maintain its frenetic growth pace.

Greene added: “As others begin to enter the market, VMware and its partners are continuing to broaden and deepen its highly reliable end-to-end virtualisation solutions. From the desktop to the datacenter, VMware products is providing significant capital and operational cost savings to customers.

“VMware is enabling organsations of all sizes to deploy and manage two to three times the number of application workloads per administrator, while using four to 10 times less data center capacity.”

GAAP net income for the year was $218 million, compared to $86 million in 2006. Non-GAAP net income was $295 million and net income for the quarter was $78 million, compared to $31 million, in the year-ago quarter.

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