text:
Paul Ziots - Investor Relations
Pat Gelsinger - Chief Executive Officer
Carl Eschenbach - President and Chief Operating Officer
Jonathan Chadwick - Chief Financial Officer and Executive Vice President
Kash Rangan - Merrill Lynch
John DiFucci - JPMorgan
Heather Bellini - Goldman Sachs
Phil Winslow - Credit Suisse
Brent Thill - UBS
Keith Weiss - Morgan Stanley
Walter Pritchard - Citigroup
Welcome, and thank you for standing by. At this time, all participant lines are in a listen-only mode. (Operator Instructions) Today's conference call is being recorded. If you have any objections to this, please disconnect at this time.
And now, I would like to turn the call over to your host, Mr. Paul Ziots. Sir, you may begin.
Paul Ziots
Welcome to VMware's first quarter 2013 earnings conference call. On the call, we have Pat Gelsinger, Chief Executive Officer; Carl Eschenbach, President and Chief Operating Officer; and Jonathan Chadwick, Chief Financial Officer and Executive Vice President. Following their prepared remarks, we will take questions. Our press release was issued after close of market and is posted on our website, where this call is being simultaneously webcast.
Statements made on this call include forward-looking statements such as those with the words will, believes, expects, continues and similar phrases that denote future expectation or intent regarding our financial outlook, product offerings, customer demand and other matters. These statements are based on the environment as we currently see it and are subject to risks and uncertainties. Please refer to the press release and the risk factors and documents filed with the Securities and Exchange Commission, including our most recent reports on Form 10-Q and Form 10-K for information on risks and uncertainties that may cause actual results to differ materially from those set forth in such statements.
In addition, during today's call, we will discuss certain non-GAAP financial measures. These non-GAAP financial measures, which are used as measures of VMware's performance, should be considered in addition to, not as a substitute for, or in isolation from, GAAP measures. Our non-GAAP measures exclude the effect of our GAAP results of stock-based compensation, amortization of intangible assets, employer payroll tax and employee stock transactions, the net effect of amortization and capitalization of software acquisition-related items, and realignment costs. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP measures in the press release and on the Investor Relations page of our website. The webcast replay of this call will be available for the next 60 days on our company website under the Investor Relations link.
Our second quarter 2013 quiet period begins at the close of business on June 14, 2013. Unless otherwise stated, all financial comparisons in this call will be in reference to our results for the comparable period of 2011.
With that, let me hand it over to Pat.
Pat Gelsinger
Thanks, Paul and good afternoon everyone. Q1 was a solid start to the year despite a mixed economic environment. I am very pleased with my team's performance this quarter particularly in light of recent results from many of our industry peers. Total revenues for Q1 increased 13% for $1.19 billion with a non-GAAP operating margin of 32.5%. Looking ahead we see tremendous opportunity based on our unique role in the industry. VMware's vision is to empower people and organizations by radically simplifying IT through virtualization software. Our customers are looking to us to help them solve some of the toughest challenges in IT and simple and elegant ways thereby delivering new levels of efficiency control and agility.
To do this we will continue to introduce new innovations and offerings that will empower IT as a broker of services that's why the speed of business and competitive advantage. This vision is based on a laser focus on what VMware does best and our ability to enter 2013 execution ready looks full strategic alignment across the leadership team. Our realignment actions are ahead of schedule and nearly complete and we're proud of the VMware team for navigating these changes so well. We have focused the entire company around our innovation priorities without skipping a beat on business results throughout the realignment. This includes the successful integration of our cloud application platform assets into the new pivotal organization under Paul Martiz's leadership.
We're excited to engage with Pivotal as a strategic partner and investor and congratulate the new team as they hit the ground running. Based on this operational momentum execution in Q1 and our view on the macro-economic conditions for the year we believe we're on track to achieve the full year FY '13 guidance provided at our strategic forum for investors on March '13. Jonathan will detail these areas and (inaudible) FY '13 expectations again during his section of the call.
VMware strategy is firmly in place with our three growth priorities, software defined data center, hybrid cloud and end user computing serving as the core missions that will drive our execution for 2013 and beyond. We're on a multi-year journey as we guide our customer's technology and business transformation. We believe this IT transformation presents VMware with a $50 billion total addressable market opportunity by 2016. With this core strategy and market opportunity in mind I would like to double click briefly on our momentum, our perspective on the industry and the increasing role we play with in the IT sector.
First we're pleased with our continued progress with the software defined data center opportunity, we continue to deliver innovations and networking securities, storage and management as powerful as those that we lead and continue to lead as server virtualization comprehensively deliver through the vCloud suite. Extending our network footprint we recently outlined our intentions to merge the VMware vCloud networking and security product line with the Nicira network virtualization platform into the single product family based on a common technology foundation to be named VMware NSX. We're also set to further deliver against the software defined data center architecture in the second half of the year with broader software defined storage solutions for stand-alone products and within the vCloud suite. Our unique ability to radically simplifying our customer's day to day operations through the software defined data center is enabled by closely weaving management and automation innovation as part of the vCloud suite. We're happy with our progress with these solutions including early customer response to our recently announced vSphere operations, management solution.
And while the large majority of customers prefer an integrated cloud offering from VMware some consider assembling a cloud solution using multiple technologies to help them manage an automate those complexity we engage across the rich eco-system of vendors and open source solutions. We see OpenStack emerging as a framework for assembling a cloud infrastructure and intend to enable our best of breed networking, compute storage and management technologies to be integrated into OpenStack and other environments thereby extending the addressable market opportunity for VMware while providing additional choice for our customers. For example, last week we announced these for your support as a virtualization platform to the latest OpenStack release. Further expanding on the software-defined datacenter opportunity and on VMware is it built to offer customer's choice we have seen significant interest for both customers and partners in response to our intention to extend this architectural approach into a hybrid cloud service offer. This new offering will extend the value of VMware from the inside out, leveraging a common management, orchestration, networking, and security model into the public cloud without requiring changes to existing applications.
As we outlined at the strategic forum, we expect to launch VMware vCloud Hybrid Service mid-year and intend to make it available through our existing service provider channel, systems integrator and outsourcing partner ecosystem to accelerate customer's journey to the cloud. We have created the new hybrid cloud services business unit, and recently welcomed cloud services veteran, Bill Fathers as Senior Vice President and General Manager.
And finally, we are aggressively moving forward with our end user computing business, a natural extension of the core principles of virtualization to create a truly virtual workspace for seamless connection across any device, any workload, and any cloud. The VMware Horizon 3 is a comprehensive platform for workforce mobility using virtualization to transform silos of data, applications, and desktops, and to centralize the IT services. As a result, IT can easily provision manage and deliver applications to end users on the devices of their choice.
Over 500,000 customers won their business on our infrastructure supported by one of the richest ecosystems on the planet, and over 36 million virtual machines supporting both foundational and mission-critical apps won on VMware's platform. This puts VMware and our customers in an enviable leadership position as the industry moves from the client server era to the mobile cloud era. VMware is the virtualization software infrastructure company, and the only company capable of providing an end-to-end infrastructure solution designed to bridge our customers, legacy client server apps and desktops to the next-gen apps for the mobile cloud world.
We continue to execute against our strategy and our position in the market is clear as we embark on this multi-year journey with our customers. We don't take this position for granted. And again, I would like to thank our customers, partners, and our people for their passion and engagement as we lead into our aspirational goal of becoming the greatest infrastructure software company of this decade.
With that, I'll turn it over to Carl.
Carl Eschenbach
Thanks Pat. I would also like to congratulate employees and partners for achieving Q1 performance in conjunction with simultaneous execution of both the pivotal transition and our broader realignment efforts. As indicated in our last earnings call, I have never seen VMware more focused. Our three growth priorities, the software-defined datacenter, hybrid cloud, and end-user computing have alignment across all functions in the company as well as our partner community. We continue to build our industry thought leadership, which is evident by the industry support of the software-defined datacenter launched at VMworld last August.
Operationally, we are consistently meeting our short-term goals as we build a deeper foundation for VMware's future. We continue to bring world-class software engineers, executives, and broad-based talent into VMware while simultaneously building an environment for our employees that foster both personal and professional growth from training and development programs to our focus on giving back to the communities we serve. We view these investments as a fundamental win-win for VMware, our employees and our customers. And we will continue to build these programs in support of our aspirational goal to add just reference to become the greatest infrastructure software company of this decade. As per the results this quarter, we are pleased with our performance in Q1 and delighted with the team's execution, particularly in light of new expectations for the U.S. and Europe along with uncertainty in the U.S. federal government standing due to the sequestration. Results were in-line with our expectations in all three regions. The Americas, EMEA and Asia-Pacific. This performance was a result of solid execution across the entire company, our customer operations teams around the world did an outstanding job closing ELAs and what is typically a seasonally tough quarter for technology companies. Q1 was a second full quarter of availability for the vCloud suite. We exceeded our internal bookings plan in Q1 and as expected approximately 75% of vCloud's suite bookings were part of enterprise license agreements. Customers are excited about the tremendous efficiency benefits they are realizing from the suite, for example Symantec Corporation uses vCloud suite and has been able to reduce the time it takes to create environments from 20 to 30 hours down to just 10 to 15 minutes. Symantec has now deployed over 145,000 virtual machines leveraging the vCloud suite.
Enterprise license agreements were approximately 29% of total first quarter bookings, this is up from approximately 22% last Q1 and demonstrates customers commitments to investing in VMware's expanded solution offerings. We were able to accelerate and close two ELAs greater than $10 million in the quarter had a healthy mix of new ELAs as well as ELA renewals and continue to see a nice tax rate of non-vSphere solutions to our ELAs.
As we expected blended ASPs for vCloud's suite were more than three times of blended ASP for vSphere in Q1 which is a strong indication of the incremental value VMware brings to customers with one integrated suite comprised of vSphere, management and automation and network and security functionalities. We're very pleased with renewal rates within the quarter as we achieved an all-time high in percentage of renewals with any Q1 and the second highest in quarter renewal rate of all-time. This reflects a vote of confidence from our customers and our products and solutions, technical support and upcoming product enhancements.
The momentum in continued strength of renewals across our ELA and renewals businesses reinforces VMware store as a long term strategic partner to our customers. Transactional bookings were up modestly year-over-year despite the effect of softening X86 server shipments on our OEM business. We are pleased by initial customer reaction to the recent launch of vSphere operations management and vSphere data protection at our partner exchange event in February where we hosted more than 4100 registered attendees from partners around the world.
We continue to put in place programs to help drive additional transactions via our channel partners and also continue to work with the channel partners to increase uptake of adjacent products. Q1 was a strong quarter for our management and automation product lineup. Standalone, management and automation license bookings were up double digits year-over-year. This does not take into account management and automation functionality sold within the vCloud suite. It is important to note that vCloud suite and vSphere operations management or vSom become an increasingly large portion of our total license bookings, stand-alone management and automation bookings must be viewed in conjunction with vCloud suite and vSom in order to understand our expanding footprint in this product area. vCenter operations management suite continues to be one of VMware's fastest growing products since vSphere and our investments in channel recruitment enablement and sales incentive had been paying off. vCloud automation center has been gaining traction particularly well with our financial services customers. vCenter operations management suite and vCloud automation center work in both vSphere and non-vSphere environments.
Our end-user computing license bookings were up in the mid-teens year-over-year. We continue to make investments across the board in end-user computing go-to-market activities, including increased focus on verticals such as financial services, the public sector, and healthcare. In Q1, we launched an integrated VMware Horizon Suite, the industry's most comprehensive platform for workforce mobility. We are pleased with the initial response to the suite as both existing and new customers look to leverage Horizon functionality to serve their end-user needs.
As Pat mentioned earlier, network virtualization is one of the next big steps for our customers on the pack to the software-defined datacenter. We expect to launch NSX in the second half of 2013, and it will represent the full potential of network virtualization working across VMware and non-VMware hypervisors and cloud management systems, as well as underlying networking hardware. By virtualizing the network, VMware NSX will allow customers to accelerate application deployment, lower both capital and operational cost, and transform network operations in a non-disruptive manner. We are aggressively aligning all assets in go-to-market efforts to take advantage of the strong demand for a significantly better approach to networking enabled by virtualization.
And I am very pleased with the reaction from customers who are on the leading edge of adopting this next wave of virtualization technology, in addition to existing companies such as Rackspace and eBay, Intel, NaviSite, a Time Warner company, and Colt, a major European service provider or a few of the companies currently deploying are actively exploring proof-of-concepts with VMware's network virtualization technology. As I said on previous earnings calls, we are in the early days of this market, but I am increasingly bullish on the opportunity to monetize our lead in virtualization of the network. And we will continue to provide updates on how this market is evolving over the coming quarters.
Our VMware Service Provider Program once again tracked well in the quarter as public cloud providers continue to leverage our cloud infrastructure program for their service delivery. As we have stated previously, we believe this ecosystem of providers is second only to Amazon in public cloud market share, and this program is one of the fastest growing parts of our business with bookings growth over 100% for Q1 2013 versus Q1 2012. In addition, as we laid out at our recent strategic forum event in March, our customers want to leverage cloud and cloud services for both existing applications as well as next generation applications, and they want to do it in a way that's consistent in how they manage, operate, and deliver IT services today from their existing datacenter.
Our partner community has also been telling us that as they talk to VMware's customers, there is a big desire of VMware public cloud offering that is in synchronization with what they are running in their datacenter today. Because we already had been successful in the private cloud, we want to extend upon that success and move to a hybrid cloud offering, where we see a massive market opportunity in satisfying customer demand. We plan to launch VMware vCloud Hybrid Services on May 21 and look forward to providing more detail about these services at that time.
In summary, our Q1 operational momentum and results put VMware in a solid position to achieve our business technology and financial goals for 2013. Our large and solid base gives us an exciting opportunity to demonstrate our commitment to helping customers transform the way they deliver IT services through innovation and world-class support. We are pleased that our customers are expressing excitement about our product deliverables later this year. These new products include the next generation of vSphere, vCloud Operations Suite, Horizon Suite as well as VMware NSX for network personalization, vSOM for storage virtualization, and vCloud Hybrid Services, all of which are in customers' hands with beta versions.
Our operational momentum is strong and our leadership team is focused. We're energized for a strong for a strong 2013 for our customers and partners, our employees and our investors. With that let me turn it over to Jonathan.
Jonathan Chadwick
Thanks Carl. As Pat and Carl said we accomplished what we said we would do in Q1 despite a mixed economic environment and achieved solid results for license revenue, total revenue and non-GAAP operating margin. Total revenues for the first quarter were $1.19 billion up 13% from a year ago on both the U.S. dollar and constant currency basis. U.S. revenues increased by 17% and international revenues increased by 9% year-over-year. License revenues rose in Q1 to $488 million near the high end of our guidance range. Software maintenance and support revenues increased 23% to $605 million year-over-year. Customers continue to buy on average more than 24 months of support and maintenance with each new license purchased which demonstrates a strong commitment to VMware's core element of their data center strategies. Professional services revenues were $98 million in Q1 up 21% year-over-year as customers increasingly leveraged our professional services expertise for architecture leadership when embarking upon cloud implementations. We're also pleased with the progress we're making in product areas beyond stand-alone vSphere. In Q1 end-user computing license bookings were once again greater than 10% of total license bookings, when combining EUC license bookings and additional license bookings outside stand-alone vSphere such as management and automation and vCloud suite, greater than 30% of total license bookings in Q1 came from products outside our stand-alone vSphere offerings.
I will now provide some details in our operating margins unless otherwise noted all references to our expenses and operating results are on a non-GAAP basis and our reconciled with our GAAP results in the press release tables and posting on investor relations website. Our Q1 operating profit measured on a non-GAAP basis was $388 million or 32.5% of revenue as compared with 32.8% in Q4 and 32.6% in Q1 2012.
Our non-GAAP operating margin exceeds our expectation in Q1 due to slightly higher than anticipated revenue and good ongoing expense controls. We ended the quarter with approximately 13,000 employees down roughly 800 from the beginning of the quarter. This reflects the net impact of our realignment actions initiated in Q1. Our non-GAAP tax rate was 18.5% for Q1. On a GAAP basis we had an income tax benefit of $9 million reflecting the retroactive reinstatement of the R&D tax credit in Q1. Diluted non-GAAP EPS for Q1 was up 11% year-over-year to $0.74 a share on 433 million shares. Now moving on to our balance sheet and cash flow metrics, our balance sheet remained strong with cash and short investments at quarter end of $4.94 billion up $306 million quarter-over-quarter. Our operating cash flows remain strong as well, and with $676 million up 17% year-over-year.
DSO was 57 days in Q1 compared to 60 days in Q4; the improvement reflected record collections from our seasonally strong Q4 plus strong cash collections performance in the quarter. The quality of our receivables portfolio remains high. Our total cash spending on CapEx for Q1 was $78 million as previously noted we're continuing to build out of our Palo Alto campus which will continue through 213.
Free cash flows were $599 million in Q1 up 10% year-over-year. During the quarter we repurchased approximately 2.4 million shares of our stock for a total $182 million under our share repurchase program at an average price of $77.5 per share. Total unearned revenue ended the quarter at $3.49 billion up 24% from Q1 2012 and an increase of 1% quarter-over-quarter. Long term unearned revenue is now $1.3 billion as customers continue to purchase multiple years of maintenance and as more unearned license revenue is recognized over time.
80% of our unearned revenue is software maintenance and will be recognized ratably. 13% of unearned revenue is software license revenue, which is recognized either ratably or upon product delivery. At the end of Q1, over 50% of the total unearned license revenue balance is to be recognized ratably. And in addition, 7% of unearned revenue is the result of prepaid professional services, including training which is recognized as the services are delivered. Considering all of these elements, 88% of our total deferred revenues are to be recognized ratably.
Now, I would like to make a few comments about the calculated bookings figures, which many of you routinely calculate by adding our quarterly revenue to the sequential change in unearned revenue each quarter. Typically, these calculated bookings and associated growth rates have been a reasonable proxy for our actual bookings and actual bookings growth rates over time. In Q1 however, these calculated growth rates were significantly lower than our actual growth rates. This is due to a number of factors, which include the removal of unearned revenue associated with the VMware Protect business we exited as part of our realignment activities as well as the timing of OEM bookings. Given these various items, we want to make clear that our actual license bookings of Q1 grew at a rate of greater than 10%, and that our actual total bookings also grew at a rate of greater than 10% in Q1.
Now, turning to a couple of operational updates, at this time, our headcount realignment activities are ahead of schedule and nearly completes. Additionally, we expect any remaining product divestitures to conclude over the next few months. I would like to thank all of our employees for their focus and dedication in accomplishing the fastest and most effective realignment project I have ever seen. Regarding pivotal, consistent with what I have communicated previously, the transaction became effective on April 1, which is the beginning of our fiscal second quarter. This means you will still see pivotal assets and employees included in our Q1 financial statements. Approximately, 500 employees are transferring from VMware to pivotal in Q2. As I mentioned on March 13 in our strategic forum, substantially all revenues and cost associated with our contribution to pivotal will be eliminated from VMware's P&L statements from Q2 onwards. Furthermore, you will see the effect of approximately $70 million in unearned revenue transferred from VMware to pivotal in our Q2 balance sheet. Approximately, $32 million of this unearned revenue is unearned license revenue.
Now, moving to guidance, as we noted 90 days ago, when we first provided our 2013 outlook, we see an uncertain economic outlook for the upcoming year. Since the time of that call, a number of our peers have made similar observations. We remain cautious in the short-term, and our 2013 revenue guidance remains in the range of $5.120 billion to $5.240 billion, or an increase of 11% to 14%. This revenue guidance takes into account the removal of pivotal revenue from Q2 onwards. As a reminder on an apples-to-apples basis, our total revenue growth for 2013 would be between 14% and 16% when taking into account the removal of pivotal from both 2012 and 2013. In addition, our original guidance for 2013 included approximately $110 million of pivotal related revenues associated with Q2 through Q4 2013. On March '13, we removed this $110 million from our 2013 guidance. We noticed that many of you have not fully removed this $110 million from your models and do suggest you consider doing so at this time.
Switching to license revenue, our growth expectation for the full year remains within the range of approximately 6% to 9%. As I mentioned on March 13, this takes into account the removal of pivotal revenues from Q2 through Q4 of 2013, but of course includes pivotal revenues for the entirety of 2012. On an apples-to-apples basis, our license revenue growth for 2013 would be between 8% and 11% when taking into account the removal of pivotal from both 2012 and 2013.
Regarding operating margins as you now know we experienced stronger non-GAAP operating margin results in Q1 that anticipated. Taking into account our adjustments to GAAP operating income that Paul discussed at the start of the call and the pivotal related assets which moved from VMware to Pivotal on April the 1st, we now expect non-GAAP operating margins to be in the range of 33% to 34% for the full year which is up an additional 50 basis points in the range we provided on March 13.
GAAP operating margins for 2013 are expected to be approximately 12 to 15 percentage points lower than non-GAAP operating margins. We expect head count at the end of 2013 to be up by approximately 500 people from the start of the year. This takes into account approximately 500 people that we transferred to pivotal in Q2 as well as the impact of our realignment activities. At this time we continue to project that our non-GAAP tax rate will be 18.5% for the year. We anticipate that our 2013 fully diluted weighted average share count to be between 431 million to 435 million shares and expect capital expenditures on a cash basis to range between $330 million and $370 million.
Total revenues for Q2 are expected to range from $1.210 billion to $1.240 million or a growth of between approximately 8% to 10%. We currently anticipate Q2 license revenue to be between 515 million and 535 million. On apples to apples basis our total revenue growth for Q2 would be between 11% and 14% after taking into account the removal of pivotal from both 2012 and 2013.
Please note that deferred revenue will be reduced by approximately $100 million in Q2, approximately $70 million is attributable to the pivotal transaction but balance of approximately $30 million takes into account anticipated remaining divestitures of businesses under our realignment plan. As Pat said we see a tremendous market opportunity ahead and we will make continued investments throughout the year related to product development and global market expansion. Consequently in taking into account our adjustments to GAAP operating GAAP we will discuss at the start of the call. We expect that non-GAAP operating margin for Q2 to range from 32.5% to 33.5%.
GAAP operating margins for the second quarter are expected to be approximately 12 to 15 percentage points lower than non-GAAP operating margins. For Q2 we estimate our non-GAAP tax rate to be 18.5% and finally we anticipate our second quarter 2013 fully diluted weighted average share count to be between 431 million to 435 million shares.
And with that I will turn it back to Paul.
Paul Ziots
Thanks Jonathan. Operator we're going to begin the Q&A process. let's begin.
Question-and-Answer Session
(Operator Instructions). Our first question will come from Kash Rangan of Merrill Lynch. Your line is open.
Kash Rangan - Merrill Lynch
I was curious on your guidance for the rest of the year. Obviously it plays a very significant reacceleration to the business in the second half of the year, can you speak to the different factors that give you confidence in the second half pick-up in the business and also if you could catch up on OpenStack there is a lot of flood in the marketplace regarding OpenStack and a complete removal of the virtualization and the management layer with an OpenSource product. You seem to indicate that there is more of an interfacing strategy with a framework not exactly a product, if you can just clarify on that these two items that will be great. Thank you very much.
Pat Gelsinger
Before I let Jonathan pick up on the reacceleration and I will take the OpenStack, if you want to make few general comments as we start the Q&A first I'm just very pleased with our team performance in Q1, results were in-lined with expectations across all of our regions indicating very balanced performance. Our product machine is performing very well. We started the year on very solid footing maintained our guidance for the year. Right, this is a very solid way to begin to 2013, and I am very proud of our year for doing that. Jonathan, maybe you want to take on the question of the acceleration in second half.
Jonathan Chadwick
Sure. Hi Kash. So, second half growth, I mean, the drivers really have not changed from what we shared in just 90 days ago. As we talked back then, we continued to make investments in both our product portfolio and also in our go-to-market activities, in particular, emerging markets, but also in our end-user computing dedicated sales teams. We do as many of you also track, we do see an ELA tailwind opportunity in the second half of 2013. Frankly, we are also looking for a little bit of a modest uptick with respect to the economy, and in particular, we are looking forward to the federal third quarter helping the second half. And then finally, I mean, not least of which, we have had a solid start to the fiscal year. So, we believe our solid bookings performance in Q1 gives us a nice foundation on which to build the full year.
Kash Rangan - Merrill Lynch
Thanks. And Pat, you are going to talk about OpenStack?
Pat Gelsinger
Yeah, very specifically. First, with respect to the overall OpenStack environment for large majority of our customers simply wants an integrated solution and for that the VMware stack overall remains the choice of the vast majority of our customers. However, what we do see is the emerging framework of OpenStack for customers to assemble their own cloud infrastructure, e.g., for those who want to build their own. And our intention is to enable our best of breed, to sell our best of breed networking compute, storage, and management technologies into that open framework into that OpenStack environment. We see this is expanding the addressable market for VMware and further providing additional choice, the key value of VMware to our customers. As an example of that last week, Kash, we announced the vSphere support as part of the latest release of OpenStack with the release. And within that specifically, there is no compute virtualization called for an OpenStack, that's left as an open choice. And now we are delivering vSphere as a preferred solution inside of that OpenStack environment. And this presents additional monetization opportunities for our paid for compute networking storage management software technologies into that OpenStack environment.
Paul Ziots
Thank you, Kash. Next question please.
Our next question will come from John DiFucci of JPMorgan. Your line is open.
John DiFucci - JPMorgan
Thank you. My question is international revenues only grew 9% year-over-year which implies that international license probably declined. Is this really just macro issues or is there something else happening in the international markets? And if it is macro what gives you the confidence, and I guess this is some follow-up to Kash's question. What gives you that confidence to maintain your annual guidance, especially if some of that is partially due to pick up in emerging markets as Jonathon just said?
Carl Eschenbach
Jonathan, maybe you want to begin with this one. But I would also emphasize as we said. We saw very balanced performance, our bookings performance and growth across the world was very balanced. So, many of those economic factors we were able to muscle through and see very good performance across all of our GEOs. So, Jonathan a bit more color on international?
Jonathan Chadwick
Sure, Carl, but let me dive in as well at the end. So, John just to reiterate and restate the numbers, so for Q1 revenues, we saw the U.S. up 17% year-over-year and international was up 9% year-over-year. The international revenues do reflect something of a mixed bag as you think about at various stages, but in particular, we are obviously seeing softer revenue growth coming out of the European, which frankly just reflect the broader macroeconomic conditions in that region, while bookings overall did perform above plan, obviously the lower growth rates reflect the macroeconomic environment. And then secondly, frankly the international revenues this quarter had a little bit of a tougher compare year-over-year, they were up 28% in Q1 2012, so that had an impact as well. So, Carl, then if you want to add on the regions?
Carl Eschenbach
Yes, John. I just want to highlight a couple of things in our international business, particularly out of the APJ region, which continues to be the fastest growing region in the world for us and we saw continued strength come out of China. We're very pleased with their performance once again and we were very excited to see a nice rebound in our Australia, New Zealand which we have mentioned in the prior calls had been slowing a bit but we saw a nice rebound this quarter which gives us really you know good reason for optimism as we look at the international market. As far as the guidance in the (inaudible) year despite the potential slow-down in international because of Europe. It's important to note that we did bake that into all of our operating plans and models internally and we have taken into account the tougher economic environment we're faced within Europe.
John DiFucci - JPMorgan
If I could just follow-up for Jonathan, you said that license booking were up 10% on you had the issue this quarter with the pivotal transaction and the sale for tech business. Can you tell us the exact impact or the license differed license from those two issues or even cumulatively.
Jonathan Chadwick
John we did not break out the impact on any particular elements specifically on license and those were just two examples in any particular quarter as you know, there can be timing difference it's not one off differences and the two examples I shared were just examples of what we have seen this quarter. I do think it's important know that we're going to see a similar impact in Q2 as I explained in my prepared remarks. In Q2 we're seeing a specific removal of pivotal deferred revenues and also deferred revenues associated with some of our other business divestiture activities, so the key thing though is that bookings for both license and total on a year-over-year basis for Q1 were up over 10% year-over-year.
Our next question will come from Heather Bellini of Goldman Sachs. Your line is open.
Heather Bellini - Goldman Sachs
I had a couple of questions, the first one I was wondering Pat or Carl if you can talk a little bit about the transactional side of the business and some of the changes you have made and introduced at the partner conference in Q1. How faster than impact can these changes have on that part of the business, I mean should we start this really get a view from you in the second half of the year, so can you talk a little bit about the progression of the ramp that you expect to see and then also given there is so much confusion about the 2K license guidance I might have missed this but can you give us the specific impact on 2K license guidance related to pivotal because I have to think that's one of the reasons why you're stock is down 7% or 8% in the aftermarket and people didn't adjust their numbers if you said if you can just give us some clarity. I think people might be able to then judge the business on an apples to apples basis if you don't mind.
Carl Eschenbach
So let me start off talking Heather specifically about the transactional business. As I said in my prepared remarks the transactional business did experience modest growth year-over-year, in the early indications we're getting from the market with the recent introduction of vSom production which vSphere plus operations management has been very encouraging both from the customer demand as well as the excitement we're seeing from our channel to sell this into the market as a complete suite of solution going forward. Also we continue to invest in our channel, we continue to invest in ways to drive to transactional business to our partners by increasing potential margins if they can enjoy by selling our transactional solutions and I think as we get into the second half of the year you will start to see the impact of all of these changes and modifications we're making to the transactional business model like vSom become more relevant and we will provide you more color on that as we get into the second half of the year. And one last point I would make is we indicated that our OEM business had an impact on our overall transactional business in Q2 because when we look at the transactional business it includes our OEM business and we did experience a slight decline in our OEM business which is correlated in directly related to the X86 server shipments in particularly we saw the decrease in Europe.
If we were to exclude the OEM business from our transactional business the transactional business would have even been up slightly greater. Greater. Jonathan?
Heather Bellini - Goldman Sachs
Before we just slide over to Jonathan to answer the pivotal impact on Q2, Carl, I guess one follow-up would be what type of ASP uplift should we be expecting from the vSOM product versus the typical transaction business you are doing maybe 12 months ago?
Carl Eschenbach
So, we need to get into this a little bit further meaning selling the vSOM into the market before we can provide any color around it. We have provided color around the vCloud Suite and indicate that the vCloud Suite has a 3X uplift over traditional vSphere standalone, but as a vSOM product, we need to get another quarter under our belt before we can provide the same type of color going forward.
Heather Bellini - Goldman Sachs
Okay, thank you.
Jonathan Chadwick
Yeah, and Heather on the overall just to restate the Q2 guide, reported revenues on an overall basis 8% to 10%, but as on an apples-to-apples basis 11% to 14% taking out pivotal.
Heather Bellini - Goldman Sachs
Yes, the people we need the license impact.
Jonathan Chadwick
Yes, we did not break that out overall, but you should assume.
Heather Bellini - Goldman Sachs
I know you didn't, but I am just telling you from the probably 50 e-mails in my inbox, that's what people are looking for.
Jonathan Chadwick
Yes, the reported guide that we gave you was zero to three. You should assume it's going to be slightly higher than that, but that's the extent of what we have said.
Heather Bellini - Goldman Sachs
Thank you.
Paul Ziots
Thank you, Heather. Next question?
Our next question comes from Phil Winslow of Credit Suisse. Your line is open.
Phil Winslow - Credit Suisse
Hi, guys. Just a couple of quick questions. Just first on the business, I am wondering you can provide some more color in terms of what you have been saying, in terms of vCloud Suite adoption, particularly with the net promotion you have been drawing in the past two quarters? And then also just the pipeline, then two just quick housekeeping items, first, what was the FX impact this quarter and how you think about that for next quarter and also a couple more of these businesses that you divested like the Protect business, how is that affecting the revenue guidance for that this year? I am assuming that's included in the numbers as well even though it's small? Thanks.
Pat Gelsinger
Carl, you want to start?
Carl Eschenbach
Yes, let me just provide some additional color, if you will, Phil as it relates to the overall business and how we saw the quarter unfolds. So, first of all, as Pat said we were very pleased with the performance across all three regions. And we were particularly pleased with the sales execution that we saw around the world and to be able to get 29% of our bookings coming through ELAs in Q1, which is typically a tough seasonal quarter for technology companies just shows the sales execution and how we performed around the world. So, we are very pleased with sales execution across all the three regions. As far as the vCloud Suite as I indicated in my prepared remarks, about 75% of the vCloud Suite was sold into ELAs, which is exactly what we had expected and this was the second full quarter of us having the vCloud Suite in the market. And in both Q4 and Q1, we were pleased that our internal bookings be our internal plan for the vCloud Suite. So, the adoption and update from our customers has been even stronger than we would have expected showing improving that customers look to leverage as a powerful platform around software-defined datacenter we are bringing to market through the integrated suite known as vCloud Suite.
Pat Gelsinger
Yes. And on the FX question, Phil, frankly we did not see a significant impact on overall growth rates in Q1, and as you will note, I said that was reported and constant currency was the same. And remember that about 70% or thereabout, approximately 70% of our billings were actually in U.S. dollars today. So, we do see a modest headwind, but not significant frankly with respect to overall top line performance in the second quarter. So, overall, we are not at this point seeing a significant impact on foreign exchange.
Paul Ziots
Thank you, Phil. And in the interest of time, let's just take one question from the remaining folks. So, next question please?
Our next question will come from Brent Thill of UBS. Your line is open.
Brent Thill - UBS
Thanks. Pat, just on the public cloud operators, I believe Carl mentioned bookings were up about 100%, can you just give us more color on your progress into that channel and any color will be helpful? Thank you.
Pat Gelsinger
Sure. Carl, do you want to discuss that?
Carl Eschenbach
Yes. So, as I indicated Brent in my prepared remarks, we did see 100% growth in our VSPP which is our VMware Service Provider Program bookings in the quarter which shows our continued growth in offering a public crowd through our strategic partners around the world and at the same time as you know. We introduced the notion of VMware entering the market with a hybrid cloud solution called vCloud hybrid service at the strategy day in New York back in March and as Pat and I have been touching a lot of customers in the last few weeks, I can tell you there is very much a level of excitement from our customers and partners about VMware entering the market with a VMware branded hybrid cloud service and we will be providing a lot more detail around this on May 21st when we do the official launch of this hybrid cloud service at that time. Pat anything to add in what you're experiencing from customers?
Pat Gelsinger
Just echoing Carl's comments that the customer interest in our insight, out strategy for our hybrid cloud service visibility of being able to have a compatible cloud environment that extends their internal private cloud into the public cloud, this idea is resonating very strongly and the interest that we're seeing from that, the beta customers that we're putting on the service today are reaffirming that our strategy is strong and it meets the unique need in the marketplace and again being reinforced by our channel partners we think that this is on track for really have the very differentiated positioning to meet a growing interest in public and uniquely hybrid cloud service market.
Our next question will come from Keith Weiss of Morgan Stanley. Your line is open.
Keith Weiss - Morgan Stanley
I wanted to dig into that figure that you gave 30% I believe of license bookings were outside of the core vSphere suite. Just one clarification in that does that include vCloud as well in that number and the actual question outside of the clarification is can you give us a sense of how that number has changed overtime and maybe where that was a year ago and maybe where that was in Q4?
Pat Gelsinger
As we laid out in the strategy day we see that we're broadening the VMware opportunity and in particular with software defined data center and network storage management, hybrid cloud service and end-user computing and thus we're extending from really a compute virtualization market to the $50 billion plus (inaudible) that we laid out for this broader market opportunity and this idea of giving this metric, this 30% greater than 30% metric to us is important to help you have evidence that we're accomplishing that evolution of our business model and that's why we're giving this a new indicator and one that you can expect to see from us going forward. Jonathan maybe a bit more color.
Jonathan Chadwick
So the total license bookings contribution from outside standalone vSphere is a metric, we will continue first of all to share with you going forward and as you would expect the growth rates that we have been seeing from the average outside of just standalone vSphere have generally speaking being growing at a fast rate. So the percentage penetration has been picking up over the course of the last few quarters. I think it's important that we continue to focus on that because our strategy continues to be to bring suites to the market and also to provide bundle offerings. We're not just about stand-alone vSphere anymore.
I'm going to take the opportunity to just spend one second just to clarify the answer that I gave on license, revenues for Q2 in response to Heather's question I said modestly up and I'm going to specific the exact amount just to remove any confusion. So we expect on apples to apples basis but license revenues taking out the effect of the full year of Pivotal year-over-year we will be up to 5% which compares to 0% to 3% roughly while the guidance range we gave on a reported basis. So hopefully that helps clarify again up to the 5% for Q2 year-over-year license growth.
Our next question will come from Walter Pritchard. Your line is open.
Walter Pritchard – Citigroup
Just wondering again on the 30% in talking about the vSphere businesses, thinking about the second half, do we need to see vSphere actually return to growth? It looks like vSphere probably didn't grow in the quarter given that mix and the overall especially license growth rate of slightly positive. I'm wondering do we, should we think about vSphere here as sort of a business that won't grow going forward and we need to see those other products drive the growth or do you expect the vSphere returns to growth in the second half to help drive that reacceleration that you are guiding to?
Pat Gelsinger
Carl, maybe want to take that one?
Carl Eschenbach
Yeah, well, thanks for the question, because I do think it's important that we clarify how we think about vSphere today and going forward. vSphere is a core component of our compute strategy. And as you could expect, it is part of all of the suites that we are bringing to market, specifically the vCloud Suite and now the vSOM solution. So, when we think about vSphere, we think it now about – we think about it in the context of providing a full solution for our customers. We are now looking at as a standalone basis. One of the reasons we are not is because a lot of the people who would traditionally just buy vSphere are now buying the vCloud Suite and vSOM. So, therefore, the metric around standalone vSphere is no longer as relevant as it was in the past.
Paul Ziots
Alright, Walter, thank you for the question. Before we finish, Pat is going to have a few closing remarks.
Pat Gelsinger
Thank you, Paul. As I begin, I am very pleased with our team despite a challenging environment we performed at the high end of our revenue guidance, exceeded our already raised margin guidance and are well on track for the year with our next generation products that are clearly aligned with our three focused growth strategies. We appreciate your time and thank you for joining us today.
This concludes today's conference call. Thank you for your participation. And at this time, all parties may disconnect.
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text:
Over the past few months we've received a number of inquiries regarding Dr. Sears' stance on the Ketogenic Diet and how it relates to the Zone in terms of health and weight loss. Is this just the next diet craze or is it as good for weight loss and health as it's touted to be?… Read more »
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The Zone is not some mystical place, but a real physiological state defined by very specific blood tests. Inside the Zone, you have maximum control of diet-induced inflammation and every stage of your life becomes easier to manage. How Do You Get to the Zone? The answer is the Zone Nutrition Program. This is a… Read more »
A Clear Fear of Aging: Loss of Sight
Americans are aging. So what is their greatest concern? Surprisingly, it is not loss of memory, cancer, heart disease, amputation, loss of speech or hearing. According to a study from Johns Hopkins,1 it is the loss of vision. The reason being that losing sight has the greatest negative impact on daily lives leading to loss… Read more »
Autism Research Shows Benefit of Omega-3 Fatty Acids
Autism can be one of the most challenging conditions that occurs in a family. Autism is a mental condition that begins in early childhood and is characterized by difficulty in communicating and forming relationships with other people. But what if autism is an omega-3 deficiency condition? While improved diagnosis and awareness of autism may partly… Read more »
Live Your Life to Its Fullest in the Zone
Wellness is a lifelong commitment. It begins in the womb and goes through the continuum of life. The most important factor you have to maintain your wellness is your diet. Your success is indicated by your blood tests that tell whether or not you are in the Zone. The longer you wait to get into… Read more »
Fish Oil is More Precious than Caviar
I was recently asked by a Russian colleague what I thought about red caviar (from salmon) and black caviar (from sturgeon), and whether it is a good source of the omega-3 fatty acids EPA and DHA. My colleague grew up in an environment where her family and friends believed that caviar had a lot of… Read more »
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Reduce your risk of chronic disease by making simple changes to your diet. Starting with Hippocrates 2,500 years ago, to Luigi Carnaro 400 years ago, to Dr. Barry Sears today, data continues to prove that a calorie restricted diet can reduce your risk of chronic disease. Discover how you can benefit from history repeating itself.
Reduce Childhood Asthma with Omega-3 Fatty Acids
In a recent article in the New England Journal of Medicine, Dutch women who regularly supplemented with 2.4 grams of EPA and DHA during their third trimester had a 31% reduction in the number of asthma and wheezing attacks in their children three years after birth. In addition, supplementation with omega-3 fatty acids resulted in… Read more »
Anyone Can Have Insulin Resistance
We think of insulin resistance as only being associated with diabetes. It is true that 100% of both diabetics and pre-diabetics (i.e., those with metabolic syndrome) have severe insulin resistance. These two groups account for more than 100 million Americans. However, you don't have to be diabetic to have insulin resistance, as 16% of normal weight individuals have… Read more »
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subset: commoncrawl


text:
Apple to Refund Some In-App Purchases Made by Children
In-app purchases have been a problem for Apple, but more of a problem for parents, whose kids may have spent lots of money on extra lives, coins or toys in the games they play. Personally, I think the in-app purchase-based economy is evil, and companies like Apple should stop it: there are games where you can spend hundreds of dollars buying extra lives and hints, and the process is just manipulative.
The problem with in-app purchases and children, however, is that Apple allowed in-app purchases to continue for a period of time after a parent entered a password. So, a kind could buy a game – or, more often, download a free game – and the parent would enter a password for the purchase. They could then buy in-app purchases without the parent needing to enter the password again for a certain time.
Apple has sent out emails to iTunes account holders offering to refund some in-app purchases. Here's what they say:
Dear iTunes account owner,
Apple is committed to providing parents and kids with a great experience on the App Store. We review all app content before allowing it on our store, provide a wide range of age-appropriate content, and include parental controls in iOS to make it easy for parents to restrict or disable
access to content.
We've heard from some customers that it was too easy for their kids to make in-app purchases. As a result, we've improved controls for parents so they can better manage their children's purchases, or restrict them entirely. Additionally, we are offering refunds in certain cases.
Our records show that you made some in-app purchases, and if any of these were unauthorized purchases by a minor, you might be eligible for a refund from Apple.
If you've made any in-app purchases, you'll get an email like this. And if you think any of them were made by your kids, take advantage of this opportunity to seek a refund.
Some of the highest grossing apps are "free" apps that thrive on in-app purchases. Apply has changed the in-app purchase process slightly, but I think it's still a bad way for the app economy to work.


text: An Essential War By GEORGE P. SHULTZ March 29, 2004; Page A18 We have struggled with terrorism for a long time. In the Reagan administration, I was a hawk on the subject. I said terrorism is a big problem, a different problem, and we have to take forceful action against it. Fortunately, Ronald Reagan agreed with me, but not many others did. (Don Rumsfeld was an outspoken exception.) In those days we focused on how to defend against terrorism. We reinforced our embassies and increased our intelligence effort. We thought we made some progress. We established the legal basis for holding states responsible for using terrorists to attack Americans anywhere. Through intelligence, we did abort many potential terrorist acts. But we didn't really understand what motivated the terrorists or what they were out to do. In the 1990s, the problem began to appear even more menacing. Osama bin Laden and al Qaeda were well known, but the nature of the terrorist threat was not yet comprehended and our efforts to combat it were ineffective. Diplomacy without much force was tried. Terrorism was regarded as a law enforcement problem and terrorists as criminals. Some were arrested and put on trial. Early last year, a judge finally allowed the verdict to stand for one of those convicted in the 1993 World Trade Center bombing. Ten years! Terrorism is not a matter that can be left to law enforcement, with its deliberative process, built-in delays, and safeguards that may let the prisoner go free on procedural grounds. Today, looking back on the past quarter century of terrorism, we can see that it is the method of choice of an extensive, internationally connected ideological movement dedicated to the destruction of our international system of cooperation and progress. We can see that the 1981 assassination of President Anwar Sadat, the 1993 bombing of the World Trade Center, the 2001 destruction of the Twin Towers, the bombs on the trains in Madrid, and scores of other terrorist attacks in between and in many countries, were carried out by one part or another of this movement. And the movement is connected to states that develop awesome weaponry, with some of it, or with expertise, for sale. What should we do? First and foremost, shore up the state system. The world has worked for three centuries with the sovereign state as the basic operating entity, presumably accountable to its citizens and responsible for their well-being. In this system, states also interact with each other -- bilaterally or multilaterally -- to accomplish ends that transcend their borders. They create international organizations to serve their ends, not govern them. Increasingly, the state system has been eroding. Terrorists have exploited this weakness by burrowing into the state system in order to attack it. While the state system weakens, no replacement is in sight that can perform the essential functions of establishing an orderly and lawful society, protecting essential freedoms, providing a framework for fruitful economic activity, contributing to effective international cooperation, and providing for the common defense. * * * I see our great task as restoring the vitality of the state system within the framework of a world of opportunity, and with aspirations for a world of states that recognize accountability for human freedom and dignity. All established states should stand up to their responsibilities in the fight against our common enemy, terror; be a helpful partner in economic and political development; and take care that international organizations work for their member states, not the other way around. When they do, they deserve respect and help to make them work successfully. The civilized world has a common stake in defeating the terrorists. We now call this what it is: a War on Terrorism. In war, you have to act on both offense and defense. You have to hit the enemy before the enemy hits you. The diplomacy of incentives, containment, deterrence and prevention are all made more effective by the demonstrated possibility of forceful pre-emption. Strength and diplomacy go together. They are not alternatives; they are complements. You work diplomacy and strength together on a grand and strategic scale and on an operational and tactical level. But if you deny yourself the option of forceful pre-emption, you diminish the effectiveness of your diplomatic moves. And, with the consequences of a terrorist attack as hideous as they are -- witness what just happened in Madrid -- the U.S. must be ready to pre-empt identified threats. And not at the last moment, when an attack is imminent and more difficult to stop, but before the terrorist gets in position to do irreparable harm. Over the last decade we have seen large areas of the world where there is no longer any state authority at all, an ideal environment for terrorists to plan and train. In the early 1990s we came to realize the significance of a "failed state." Earlier, people allowed themselves to think that, for example, an African colony could gain its independence, be admitted to the U.N. as a member state, and thereafter remain a sovereign state. Then came Somalia. All government disappeared. No more sovereignty, no more state. The same was true in Afghanistan. And who took over? Islamic extremists. They soon made it clear that they regarded the concept of the state as an abomination. To them, the very idea of "the state" was un-Islamic. They talked about reviving traditional forms of pan-Islamic rule with no place for the state. They were fundamentally, and violently, opposed to the way the world works, to the international state system. The United States launched a military campaign to eliminate the Taliban and al Qaeda's rule over Afghanistan. Now we and our allies are trying to help Afghanistan become a real state again and a viable member of the international state system. Yet there are many other parts of the world where state authority has collapsed or, within some states, large areas where the state's authority does not run. That's one area of danger: places where the state has vanished. A second area of danger is found in places where the state has been taken over by criminals or warlords. Saddam Hussein was one example. Kim Jong Il of North Korea is another. They seize control of state power and use that power to enhance their wealth, consolidate their rule and develop their weaponry. As they do this, and as they violate the laws and principles of the international system, they at the same time claim its privileges and immunities, such as the principle of non-intervention into the internal affairs of a legitimate sovereign state. For decades these thugs have gotten away with it. And the leading nations of the world have let them get away with it. This is why the case of Saddam Hussein and Iraq is so significant. After Saddam Hussein consolidated power, he started a war against one of his neighbors, Iran, and in the course of that war he committed war crimes including the use of chemical weapons, even against his own people. About 10 years later he started another war against another one of his neighbors, Kuwait. In the course of doing so he committed war crimes. He took hostages. He launched missiles against a third and then a fourth country in the region. That war was unique in modern times because Saddam totally eradicated another state, and turned it into "Province 19" of Iraq. The aggressors in wars might typically seize some territory, or occupy the defeated country, or install a puppet regime; but Saddam sought to wipe out the defeated state, to erase Kuwait from the map of the world. That got the world's attention. That's why, at the U.N., the votes were wholly in favor of a U.S.-led military operation -- Desert Storm -- to throw Saddam out of Kuwait and to restore Kuwait to its place as a legitimate state in the international system. There was virtually universal recognition that those responsible for the international system of states could not let a state simply be rubbed out. When Saddam was defeated, in 1991, a cease-fire was put in place. Then the U.N. Security Council decided that, in order to prevent him from continuing to start wars and commit crimes against his own people, he must give up his arsenal of "weapons of mass destruction." Recall the way it was to work. If Saddam cooperated with U.N. inspectors and produced his weapons and facilitated their destruction, then the cease-fire would be transformed into a peace agreement ending the state of war between the international system and Iraq. But if Saddam did not cooperate, and materially breached his obligations regarding his weapons of mass destruction, then the original U.N. Security Council authorization for the use of "all necessary force" against Iraq -- an authorization that at the end of Desert Storm had been suspended but not cancelled -- would be reactivated and Saddam would face another round of the U.S.-led military action against him. Saddam agreed to this arrangement. In the early 1990s, U.N. inspectors found plenty of materials in the category of weapons of mass destruction and they dismantled a lot of it. They kept on finding such weapons, but as the presence of force declined, Saddam's cooperation declined. He began to play games and to obstruct the inspection effort. By 1998 the situation was untenable. Saddam had made inspections impossible. President Clinton, in February 1998, declared that Saddam would have to comply with the U.N. resolutions or face American military force. Kofi Annan flew to Baghdad and returned with a new promise of cooperation from Saddam. But Saddam did not cooperate. Congress then passed the Iraq Liberation Act by a vote of 360 to 38 in the House of Representatives; the Senate gave its unanimous consent. Signed into law on October 31, it supported the renewed use of force against Saddam with the objective of changing the regime. By this time, he had openly and utterly rejected the inspections and the U.N. resolutions. In November 1998, the Security Council passed a resolution declaring Saddam to be in "flagrant violation" of all resolutions going back to 1991. That meant that the cease-fire was terminated and the original authorization for the use of force against Saddam was reactivated. President Clinton ordered American forces into action in December 1998. But the U.S. military operation was called off after only four days -- apparently because President Clinton did not feel able to lead the country in war at a time when he was facing impeachment. So inspections stopped. The U.S. ceased to take the lead. But the inspectors reported that as of the end of 1998 Saddam possessed major quantities of WMDs across a range of categories, and particularly in chemical and biological weapons and the means of delivering them by missiles. All the intelligence services of the world agreed on this. From that time until late last year, Saddam was left undisturbed to do what he wished with this arsenal of weapons. The international system had given up its ability to monitor and deal with this threat. All through the years between 1998 and 2002 Saddam continued to act and speak and to rule Iraq as a rogue state. President Bush made it clear by 2002, and against the background of 9/11, that Saddam must be brought into compliance. It was obvious that the world could not leave this situation as it was. The U.S. made the decision to continue to work within the scope of the Security Council resolutions -- a long line of them -- to deal with Saddam. After an extended and excruciating diplomatic effort, the Security Council late in 2002 passed Resolution 1441, which gave Saddam one final chance to comply or face military force. When on December 8, 2002, Iraq produced its required report, it was clear that Saddam was continuing to play games and to reject his obligations under international law. His report, thousands of pages long, did not in any way account for the remaining weapons of mass destruction that the U.N. inspectors had reported to be in existence as of the end of 1998. That assessment was widely agreed upon. That should have been that. But the debate at the U.N. went on -- and on. And as it went on it deteriorated. Instead of the focus being kept on Iraq and Saddam, France induced others to regard the problem as one of restraining the U.S. -- a position that seemed to emerge from France's aspirations for greater influence in Europe and elsewhere. By March of 2003 it was clear that French diplomacy had resulted in splitting NATO, the European Union, and the Security Council . . . and probably convincing Saddam that he would not face the use of force. The French position, in effect, was to say that Saddam had begun to show signs of cooperation with the U.N. resolutions because more than 200,000 American troops were poised on Iraq's borders ready to strike him; so the U.S. should just keep its troops poised there for an indeterminate time to come, until presumably France would instruct us that we could either withdraw or go into action. This of course was impossible militarily, politically, and financially. Where do we stand now? These key points need to be understood: • There has never been a clearer case of a rogue state using its privileges of statehood to advance its dictator's interests in ways that defy and endanger the international state system. • The international legal case against Saddam -- 17 resolutions -- was unprecedented. • The intelligence services of all involved nations and the U.N. inspectors over more than a decade all agreed that Saddam possessed weapons of mass destruction that posed a threat to international peace and security. • Saddam had four undisturbed years to augment, conceal, disperse, or otherwise deal with his arsenal. • He used every means to avoid cooperating or explaining what he has done with them. This refusal in itself was, under the U.N. resolutions, adequate grounds for resuming the military operation against him that had been put in abeyance in 1991 pending his compliance. • President Bush, in ordering U.S. forces into action, stated that we were doing so under U.N. Security Council Resolutions 678 and 687, the original bases for military action against Saddam Hussein in 1991. Those who criticize the U.S. for unilateralism should recognize that no nation in the history of the United Nations has ever engaged in such a sustained and committed multilateral diplomatic effort to adhere to the principles of international law and international organization within the international system. In the end, it was the U.S. that upheld and acted in accordance with the U.N. resolutions on Iraq, not those on the Security Council who tried to stop us. * * * The question of weapons of mass destruction is just that: a question that remains to be answered, a mystery that must be solved. Just as we also must solve the mystery of how Libya and Iran developed menacing nuclear capability without detection, of how we were caught unaware of a large and flourishing black market in nuclear material -- and of how we discovered these developments before they got completely out of hand and have put in place promising corrective processes. The question of Iraq's presumed stockpile of weapons will be answered, but that answer, however it comes out, will not affect the fully justifiable and necessary action that the coalition has undertaken to bring an end to Saddam Hussein's rule over Iraq. As Dr. David Kay put it in a Feb. 1 interview with Chris Wallace, "We know there were terrorist groups in state still seeking WMD capability. Iraq, although I found no weapons, had tremendous capabilities in this area. A marketplace phenomena was about to occur, if it did not occur; sellers meeting buyers. And I think that would have been very dangerous if the war had not intervened." When asked by Mr. Wallace what the sellers could have sold if they didn't have actual weapons, Mr. Kay said: "The knowledge of how to make them, the knowledge of how to make small amounts, which is, after all, mostly what terrorists want. They don't want battlefield amounts of weapons. No, Iraq remained a very dangerous place in terms of WMD capabilities, even though we found no large stockpiles of weapons." Above all, and in the long run, the most important aspect of the Iraq war will be what it means for the integrity of the international system and for the effort to deal effectively with terrorism. The stakes are huge and the terrorists know that as well as we do. That is the reason for their tactic of violence in Iraq. And that is why, for us and for our allies, failure is not an option. The message is that the U.S. and others in the world who recognize the need to sustain our international system will no longer quietly acquiesce in the take-over of states by lawless dictators who then carry on their depredations -- including the development of awesome weapons for threats, use, or sale -- behind the shield of protection that statehood provides. If you are one of these criminals in charge of a state, you no longer should expect to be allowed to be inside the system at the same time that you are a deadly enemy of it. Sept. 11 forced us to comprehend the extent and danger of the challenge. We began to act before our enemy was able to extend and consolidate his network. If we put this in terms of World War II, we are now sometime around 1937. In the 1930s, the world failed to do what it needed to do to head off a world war. Appeasement never works. Today we are in action. We must not flinch. With a powerful interplay of strength and diplomacy, we can win this war. Mr. Shultz, a former secretary of state, is a distinguished fellow at the Hoover Institution, Stanford University. This is adapted from his Kissinger Lecture, given recently at the Library of Congress.


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Chinese-owned firms, Cambodia Iron and Steel and Steel Mining Industry, launch three construction projects in Cambodia.
On December 31, 2012, the two firms signed an $11 billion deal with the Southeast Asian country to build a new railway, a port and a steel factory.
The 400-kilometer rail line will run from a new plant in northern Preah Vihear province to a port, which will be built Koh Kong in Cambodia's southwest.


text:
Noiseware 5 FeaturesNoiseware 5 is a new milestone in image noise reduction and incorporates the fifth generation of Imagenomic's noise reduction engine. Noiseware 5 not only looks different, it features plenty of improvements under the surface as well.
- Improved algorithm retains more details and is 25% more effective.
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- and a new version for Aperture!
Photoshop CS4/CS5/CS6/
Photoshop Elements 8/9/10/11/12/13/14
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Product Upgrade PricingNoiseware 5 Plugin for Photoshop is FREE for licensed owners of Noiseware Professional Plugin 4.x and earlier versions
For licensed users of Noiseware for Photoshop interested in adding the Aperture edition to their workflow, there is a special price of $39.95
AvailabilityAs with all Imagenomic products, Noiseware 5 can be downloaded and used for free, (now on a 15-day trial basis without watermarking), so that you can "try before you buy".
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text: The Temple of Lahkesis is a temple on the Island of Creation, dedicated to one of the Sisters of Fate. It is actually the first part of the island that Kratos explores upon reaching the island. Traversing the first part of the temple brings him to the Steeds of Time. Upon returning from the Steeds he further explores the temple, finds the Amulet of the Fates, uses it, and speaks with Lahkesis herself. After speaking with her via her statue, he destroys the statue's head and breaks open a passage to Destiny's Atrium beyond.


text:
College of Wooster Web Application
If you have questions please contact email@example.com.
Returning users:
Log in to continue an application.
First-time users:
Create an account to start a new application.
Note: To protect the privacy and security of your application, you must register your email address. Once created, you may access your account at any time, using your registered email and self-selected password.


text:
Best Of :: People & Places
Estereo Latino KLTN 102.9 FM has tons of the latest hot Latin music. But then again, so do a dozen other Spanish-language radio stations. So, what makes the station stand out in the crowded Latino radio market? The DJs, of course. Host and show producer Raul Brindis is the morning funny man on weekdays and Saturdays, along with sidekicks Pepito, Caraturky, Columba, El Perico, El Costeñito and El Lobo. Brindis's radio show is one of the most popular in the city. The crew starts the mornings off with regular comedy bits, like "Confessions" and "Professor Chingao" (ask your Spanish-speaking friend for a translation). Then beautiful and sexy-voiced Gloria Rodríguez takes over for the afternoon, followed by René Rodríguez and Vidal Luna. Each show has a slightly different twist on the music, moving from norteño to grupero to cumbias. Stereo Latino keeps you dancing – and laughing.
For a short while, this unhinged woman was a savior to our bummed-out, cynical nation. Iraq, the U.S. Attorneys scandal, dead Anna Nicole — it was too much bleakness for us to handle. But then God, who obviously wants to produce movies for the Lifetime Network, sent us Lisa Nowak. By driving from Houston to Orlando to beat up the woman she suspected of diddling her ex, Nowak delivered just what we needed. For a week, late-night talk-show hosts had material they would sacrifice their firstborns for. Headline writers were absolutely giddy. Unfortunately, this astro-nut's star burned too brightly too quickly, and the nation moved on. But for a while she was the opiate to our masses. Generations from now, troubadours will sing, "Where have you gone, Lisa Nowak? A nation turns its lonely eyes to you." We guarantee it.
Scott Ballard has worked on design projects as far away as Kuala Lumpur, but some of his coolest work is right here in Houston, where the architect lives inside the Loop in one of his own hip designs. Sleek and oh-so-modern, the homes he creates are fine enough to impress the most discriminating tastes and funky enough to amuse and bemuse anyone who loves interesting houses. His kitchens are user-friendly, with lots of nooks and crannies for kids and busy families to store stuff, but they feel spacious and airy at the same time. And his great rooms soar with high ceilings and loads of lofty, lovely light. Occasionally, he'll put a secret lookout right on top of your roof, where you can climb with the closest members of your entourage to sip wine while you gaze at the gleaming skyline.
Okay, so they were six months behind schedule, but it was worth it. No mere eye patch here. Developer Charlie Givens and partners have taken the city's premier Warwick Hotel and turned it into a mega-star. The grand opening on June 1 was so over-the-top, they had a live mermaid atop the entrance to wave in the bold names. (How she got up there is anybody's guess, but a ladder or crane must have been involved.) The Monarch restaurant is finally open and offering superb high-end comfort food; the rooftop pool sports shiny retro cabanas; and the rooms are right out of Lifestyles of the Rich and Famous, or maybe Captain Nemo's private quarters. Retro rock and roll never looked so hot.
We are lucky enough to know of Woodlawn's superiority over most local cemeteries not because we were clients, but because of a high school assignment to collect a "romantic" gravestone rubbing. The assignment wasn't easy. We went to the oldest cemetery, where stones — if they said anything at all — said stuff like, "Died valiantly, fighting women's right to vote." No luck. We went to ethnic cemeteries, where people left shrines with food and cigs (both presumed to be contributing factors to the deaths). Nada. Finally, we hit pay dirt (sorry) with Woodlawn, where there are inscribed poems and pictures — laser cut onto the stones, no less! — and even a few bronze monuments to what might be the greatest love of all: a boy and his guitar. Rock on, Woodlawn!!
The foundation supports the Children's Assessment Center, which provides medical, psychological, forensic and therapeutic services to aid in the healing of sexually abused children and the prosecution of their attackers. Charity Navigator has bestowed its highest (four-star) rating on CACF, stating that 89.2 percent of the funds go toward program expenses, with 10.7 percent for administrative and fund-raising costs combined. Support from the foundation has allowed the CAC to win state and national awards for its mission to help heal these most tragic of victims. If you're looking for a worthy cause, we strongly suggest you check out the foundation — it may be the most rewarding thing you've done in a long time.


text:
What Cisco's Top Cloud Infrastructure Means to YouData Center
Arguably 2014 is already turning out to be a big year for cloud. Some have even called it "The Year of the Cloud." Cloud implementation continues to play an essentialRead More
Cisco in the Cloud: Consistency is the KeyExecutive Platform
Trust is built with consistency. This axiom is certainly true of Cisco's credibility with customers in the cloud computing space, where Cisco is investing to ensure enterprise customers are ableRead More
Cisco at Citrix Synergy LA 2013 : Expanding the RelationshipData Center
Our bags are packed and the demos are built, as Cisco heads out to Citrix Synergy LA 2013 in Anaheim next week. Synergy will be the inaugural event at theRead More
Cisco VXI Tour: APAC UpdateCollaboration
Many of us here on the Cisco Virtualization Experience Infrastructure (VXI) team are excited about upcoming news around Cisco's virtualization solutions. And the Cisco VXI message gets amplified further at VMworldRead More
Momentum in the EdgeSP360: Service Provider
The Edge of the network is a major focus for our customers, the market as a whole, and certainly for us at Cisco. The ASR 9000 System is the leadingRead More
Video and Virtualization: Just Another Day at Citrix SynergyPartner
We visited the Cisco booth at Citrix Synergy and got the full tour of the end-to-end VXI system, blades, and products that utilize high-definition video.Read More


text:
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U.S. Nuclear Regulatory Commission
Ozone: Good Up High, Bad Nearby
What is Ozone?
Ozone is a gas that forms in the atmosphere when 3 atoms of oxygen are combined (03). It is not emitted directly into the air, but at ground level is created by a chemical reaction between oxides of nitrogen (NOx), and volatile organic compounds (VOC) in the presence of sunlight. Ozone has the same chemical structure whether it occurs high above the earth or at ground level and can be "good" or "bad," depending on its location in the atmosphere.
How Can Ozone Be Both
Ozone occurs in two layers of the atmosphere.
The layer surrounding the earth's surface is the troposphere. Here, ground-level
or "bad" ozone is an air pollutant that damages human health, vegetation,
and many common materials. It is a key ingredient of urban smog. The troposphere
extends to a level about 10 miles up, where it meets the second layer, the
stratosphere. The stratospheric or "good" ozone layer extends upward from
about 10 to 30 miles and protects life on earth from the sun's harmful ultraviolet
rays (UV-b).
What is Happening to the "Good" Ozone Layer?
Ozone occurs naturally in the stratosphere and is produced and destroyed at a constant rate. But this "good" ozone is gradually being destroyed by manmade chemicals called chlorofluorocarbons (CFCs), halons, and other ozone depleting substances (used in coolants, foaming agents, fire extinguishers, and solvents). These ozone depleting substances degrade slowly and can remain intact for many years as they move through the troposphere until they reach the stratosphere. There they are broken down by the intensity of the sun's ultraviolet rays and release chlorine and bromine molecules, which destroy "good" ozone. One chlorine or bromine molecule can destroy 100,000 ozone molecules, causing ozone to disappear much faster than nature can replace it.
It can take years for ozone depleting chemicals to reach the stratosphere, and even though we have reduced or eliminated the use of many CFCs, their impact from years past is just starting to affect the ozone layer. Substances released into the air today will contribute to ozone destruction well into the future.
Satellite observations indicate a world-wide thinning
of the protective ozone layer. The most noticeable losses occur over the
North and South Poles because ozone depletion accelerates in extremely cold
weather conditions.
How Does the Depletion of "Good" Ozone Affect Human Health and the Environment?
As the stratospheric
ozone layer is depleted, higher UV-b levels reach the earth's surface. Increased
UV-b can lead to more cases of skin cancer, cataracts, and impaired immune
systems. Damage to UV-b sensitive crops, such as soybeans, reduces yield.
High altitude ozone depletion is suspected to cause decreases in phytoplankton,
a plant that grows in the ocean. Phytoplankton is an important link in the
marine food chain and, therefore, food populations could decline. Because
plants "breathe in" carbon dioxide and "breathe out" oxygen, carbon dioxide
levels in the air could also increase. Increased UV-b radiation can be instrumental
in forming more ground-level or "bad" ozone.
What is Being Done About the Depletion of Good Ozone?
The Montreal Protocol, a series of international agreements on the reduction and eventual elimination of production and use of ozone depleting substances, became effective in 1989. Currently, 160 countries participate in the Protocol. Efforts will result in recovery of the ozone layer in about 50 years.
In the United States, the U.S.
Environmental Protection Agency (EPA) continues to establish regulations
to phase out these chemicals. The Clean Air Act requires warning labels on
all products containing CFCs or similar substances, prohibits nonessential
ozone depleting products, and prohibits the release of refrigerants used
in car and home air conditioning units and appliances into the air.
What Causes "Bad" Ozone?
Motor vehicle exhaust and industrial emissions, gasoline vapors, and chemical solvents are some of the major sources of NOx and VOC, also known as ozone precursors. Strong sunlight and hot weather cause ground-level ozone to form in harmful concentrations in the air. Many urban areas tend to have high levels of "bad" ozone, but other areas are also subject to high ozone levels as winds carry NOx emissions hundreds of miles away from their original sources.
Ozone concentrations can vary
from year to year. Changing weather patterns (especially the number of hot,
sunny days), periods of air stagnation, and other factors that contribute
to ozone formation make long-term predictions difficult.
How Does "Bad" Ozone Affect Human Health and the Environment?
Repeated exposure to ozone pollution may cause permanent damage to the lungs. Even when ozone is present in low levels, inhaling it triggers a variety of health problems including chest pains, coughing, nausea, throat irritation, and congestion. It also can worsen bronchitis, heart disease, emphysema, and asthma, and reduce lung capacity.
Healthy people also experience difficulty in breathing when exposed to ozone pollution. Because ozone pollution usually forms in hot weather, anyone who spends time outdoors in the summer may be affected, particularly children, the elderly, outdoor workers and people exercising. Millions of Americans live in areas where the national ozone health standards are exceeded.
Ground-level ozone damages plant life and is responsible for 500 million dollars in reduced crop production in the United States each year. It interferes with the ability of plants to produce and store food, making them more susceptible to disease, insects, other pollutants, and harsh weather. "Bad" ozone damages the foliage of trees and other plants, ruining the landscape of cities, national parks and forests, and recreation areas.
What is Being Done About Bad Ozone?
The Clean Air Act Amendments of 1990 require EPA, states, and cities to implement programs to further reduce emissions of ozone precursors from sources such as cars, fuels, industrial facilities, power plants, and consumer/commercial products. Power plants will be reducing emissions, cleaner cars and fuels are being developed, many gas stations are using special nozzles at the pumps to recapture gasoline vapors, and vehicle inspection programs are being improved to reduce emissions.
The ultimate responsibility
for our environment is our own. Minor lifestyle changes can result in major
air quality improvements.
What Can You Do?
High-Altitude "Good" Ozone
Ground-Level "Bad" Ozone
live with ozone every day. It can protect life on earth
This document is not necessarily endorsed by the Almanac of Policy Issues. It is being preserved in the Policy Archive for historic reasons.