VMWare Is Under the Wrong Kind of Cloud

VMware has vastly improved its prospects as a software business. Investors now just have to wonder whether that is what they actually are buying into.

The company reported strong fiscal year-end results on Thursday afternoon. Revenue for the year ended Feb. 2 rose by nearly 12% to $7.9 billion, with operating income jumping 17% to $1.7 billion. Both lines showed acceleration from the previous year. Licensing revenue for the fiscal fourth quarter jumped by 20% year over year, beating Wall Street’s consensus estimate of 16%...