VMware to pump $500M to beef up India operations, tap cloud

Virtualization vendor says it will invest up to US$500 million over the next three years to support its expanding operations in the Indian market, which is second in size and scale to its global headquarters.

VMware is setting aside up to US$500 million to boost its expanding operations in the Indian market, which houses one of its largest research and operations sites, second in size and scale only to its global headquarters in Palo Alto. 

The funds will be invested over the next three years, according to a statement released Thursday by the virtualization vendor. Its employee size in India grew 17 percent to 2,300 last year and has further expanded following the January acquisition of AirWatch , which added employees in Bangalore. 

In the Indian city following his Singapore stopover this week, VMware CEO Pat Gelsinger said in the statement: "India continues to play a crucial role in our global product roadmap and growth strategy. The country's outstanding engineering talent continues to impress us, and we stay committed to investing and growing our team here over the long term.

"The investments earmarked will also enable VMware to further strengthen its leadership position in India's fast maturing virtualization and cloud computing market ."

The company in 2005 set up its Indian office, which currently serves some 3,500 customers alongside a network of 100 local partners. It currently has several offices across the country including Bangalore, Pune, Hyderabad, Mumbai, and New Delhi.

Just last year, the vendor said it was  investing US$120 million in India to lease a 420,000 square-foot building in Bangalore. Its local team includes engineers who help build several key components in the company's vCloud Hybrid Service .  

Worldwide, VMware employs more than 15,000 and is the fifth-largest software company. Its revenue last year grew 13 percent to US$5.21 billion. It operates 40 million virtual machines and supports 500,000 customers globally. 

Research firm Gartner last year projected that US$4.2 billion will be spent on cloud services in India spanning 2013 through to 2017, of which US$1.8 billion will be on SaaS (software-as-a-service). Cloud-based business process services will climb from US$67 million in 2013 to US$180 million in 2017, while IaaS (infrastructure-as-a-service)--comprising cloud computing, storage, and print services--would expand by 41.8 percent in 2013 to hit US$62.5 million.