What were the key messages of your presentation to partners?
Douglas Smith (DS): The key message is that our customers are on a journey to the cloud, so it’s ultimately about how we can take them into the internal and external cloud and how partners help that transition. Also, we’re trying to educate and bring our partners into all the acquisitions we’ve done and how they fit into our vision of how the datacentre is being transformed.
How do acquisitions like SpringSource and Zimbra fit into your partner strategy?
DS: SpringSource definitely helps us work with the development community, so [during Partner Exchange] we touched on Java Apps that are ready to deploy in the cloud, and how that comes into our vision. The Zimbra acquisition, which gave us messaging capabilities and some applications that sit on top, also help us achieve that. I spent a little more time on how our partner program is being transitioned, or going through a change, to support that. The dollars we are investing in the channel will ultimately align with that strategy.
Were there any specific partner initiatives announced?
DS: It was more a re-affirmation of some of the things we’ve been doing in the market place, such as moving our model towards competencies. Like many vendors, our initial program looked at whether you were a small, medium or a large partner. It has now evolved more to what your primary line of business is – are you a hosting provider, ISV, solution provider or distributor? – and then, within that, what your competencies are that you can build upon. It’s a selection process – the partner can come in and say “these are the things I want to focus my business around” and they can invest in those.
The competencies are infrastructure virtualisation [which tends to be product or solution-oriented at the customer level] business continuity, desktop virtualisation, and we’ve announced but are still working on something around managed solutions. Before we do a full-blown competency, we do a pilot, so we’re now looking at a pilot around things like SpringSource, so we can find the partners that are strong in the development space.
The development side will become much more important to us, as well as application virtualisation. The other thing we’re doing outside of competencies is specialisations. These are more about the vertical market a partner focuses on. The big ones for us are academic and government, as there are several partners who focus on those verticals, so we’re looking at how we can do joint investments into those spaces together. The specialisation verticals are global initiatives, but they come from listening to our field. There’s also an opportunity in healthcare.
Paul Harapin (PH): Government is absolutely a huge focus for us across the country. We were pretty innovative in putting in place a program with universities nationally, where they could have a per-student model of consuming our software. It’s a rental offering in essence, and that’s been very successful for getting virtualisation into pretty much every university in Australia and New Zealand. We have since expanded that model slightly different in the K-12 area, particularly with private schools, and we’re starting to make some good progress in healthcare…we can free up 10 or 12 beds just by virtualising, so there are discernible business benefits for virtualisation. And we underpin a lot of service providers.
DS: Fundamentally, we are a horizontal company and our products have a horizontal application. But then there are partners with deep subject expertise around a vertical. That’s why you see us doing some level of verticalisation in the program so those partners can really drive down and help customers.
Did SpringSource bring many partners to the VMware table?
DS: SpringSource was more of a direct sales model because it’s based on an open source model. There is a lot of opportunity for us to build a partner base around that. The company had 3 million developers but the fulfilment was usually direct.
PH: It’s particularly appropriate for partners that may have been using expensive, proprietary software. SpringSource is also playing an important role in the partnerships we’ve struck with Salesforce, Google and others. Locally, it’s helping different types of partnerships as well.
Are partners adopting multiple competencies, or are they specifically focusing on areas like desktop virtualisation or business continuity?
DS: I think there are going to be markets where partners want to go deep and narrow, and focus just on business continuity because it’s something they’ve built a customer base around. Then we see others earning multiple competencies because as they take the customer on the virtualisation journey, they want to be involved in the whole process and not just a piece of it. Desktop virtualisation for example, is often a datacentre play but it does involve selling to different applications, it’s an OpEx not a CapEx discussion – so there are a lot of things coming into play. We deliberately designed the program to have that level of flexibility and partners can choose where they add the most value.
PH: We are also starting to see pick-up in the number of partners coming to VMware from the applications side. For instance, from companies like VoIP provider, Mitel, which just announced it is shipping its products optimised as virtual appliances for a vSphere platform. Using a USB key, you can now have a virtualised telephony system. We picked up a collection of telephony partners who had never known what VMware was, but because it’s the platform they’re now running on, they’ve come on-board and articulating our value proposition to their customers. The things we are doing with SAP…means we’re now engaging with a lot of SAP’s partners to realise the value in how they implement those solutions using VMware virtualisation.
You mentioned VMware is a horizontal play in most cases. How do you maintain that position, given some of the “super vendors”, like HP and Cisco, are lining themselves up as competitors?
DS: We have been very neutral with our server platform partners, and I think they’ve in turn, respected that neutrality. With Cisco coming into play, I don’t think that’s made a huge impact in our relationships with HP or IBM, or the HP or IBM solutions providers. I think they understand we’ve been Switzerland and treated all those relationships with a high degree of integrity. People were naturally inquisitive about it, but we pointed out we’ve worked with HP, IBM, NetApp and so on for 10 years…most solution providers often have multi-vendor relationships themselves, so they’re used to navigating the waters we’re navigating.
VMware released some solution bundles with Cisco recently – will we see more of those offerings with other vendors?
DS: We’re always looking for new opportunities with our OEM partners and what they can deliver to the market place. We’ve always doing bundles with HP and IBM, so there’s nothing new there.
PH: We’re expanding those as well to include some of the applications. Where we share distributors with a vendor and it makes sense, we can offer bundles not just at the infrastructure layer, but the applications layer as well.
Are your traditional integration partners embracing the cloud?
DS: We have a program called VSPP [VMware Service Provider Program], which is our licence model for people building out their own hosting solutions. A lot of our solution providers are also in this program. The solution providers that embrace the cloud will benefit, because the customer is going to go there and you need to embrace it and move that way. The large hosting companies may actually be a partner you’re going to work with. So as we move to this environment, partner-to-partner activity is something we need to build an ecosystem around. If you’re a hoster, you should be able to work with the ISV or the systems integrator. We need to build a community that recognises those partnerships moving forward.
How about the issue of partner recognition? Are you changing your rewards programs to reflect the shift away from larger upfront sales?
DS: You’ll see us change some of our partner rewards over time to be much more oriented towards new solutions. Things like Zimbra – you will see us make more investments to bring our partners along there. And increasingly over time, we’ll be measuring things like customer satisfaction, and how products are being deployed and used. Customer stats will become increasingly important and…customer satisfaction will come into the regular partner mix. We have that now around the competencies – you have to give us a customer reference to demonstrate.