Australian service-driven opex approach inspires Virtual Instruments expansion

Australian service-driven opex approach inspires Virtual Instruments expansion

American vendor looking to leverage local service providers to sign global customers

Virtual Instruments (VI) has followed its global customers into the Australian market with the goal of engaging with local service providers to capitalise on the uptake of operational expenditure (opex) models, according to chief executive officer (CEO), John Thompson.

VI is a Californian-based infrastructure performance management start-up. It was created in 2008 as a business unit of networking vendor, Finisar, before being sold off as the Global Financial Crisis (GFC) took effect. VI has since expanded its operations beyond infrastructure analysis to incorporate “everything from the virtual server stack to the array.”

The company first planted its flag in Australia in August, but officially cemented the move with the local launch of its VirtualWisdom platform in February. The product combines VirtualWisdom software and hardware with SANInsight physical layer access hardware. The solution is part of what the vendor calls its VI-as-a-service (VIaaS) offering, a managed service without upfront capital investment. The next generation of the solution is scheduled to launch in the June quarter.

VI chief executive officer (CEO), John Thompson, told ARN that the decision to move into Australia is part of the company’s strategy to “follow customers into new markets as opposed to going in, spending money ahead of where there might be revenue”.

The vendor has 300 customers globally. It said it has signed local customers but did not disclose the amount or the company names. Overall, it has 50 to 100 Australian targets with which it is holding negotiations; it expects to convert 30 to 40 of those within the next 12 months.

Its focus is on large enterprises that have complex mission-critical applications running a large IT environment, including banks, insurance companies, telecommunications provider, hospitals, and government agencies.

Thompson sees Australia as a leader in embracing service engagement models over the notion of buying hardware and software and deploying it.

Therefore a top priority in its customer chase is leveraging service providers which have a play in those respective markets in order to deliver managed service-led solutions. It is currently holding talks with a number of businesses, but did not name potential partners.

“Given the propensity of the buyer base here to prefer to opt for a service as opposed to a product, this would be a great way for us to figure out how to build relationships with service providers that can help us penetrate the market here,” Thompson said.

“Australian resellers tend to want to build a service component around our technology where they can make money not just in the resale opportunity, but from the services they build around the product.”

Thompson aims to translate this approach to its operations around the globe.

“It’s my view that other parts of the world can learn from Australia around this service model; it’s one where you are more opex than capex-focused, where capital is tighter to acquire or gain access to,” Thompson said. “Customers can get the services and technology they want through a service offering that only shows up on the income statement, not the balance sheet.”

Historically, about 85 per cent of VI’s revenues flow through channel partners; it will look to emulate that figure in Australia. The overall goal is for the local business to comprise two to three per cent of all global revenues within the next 12 to 24 months, while Asia-Pacific (APAC) operations are expected to make up 10 to 15 per cent.

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Tags CloudmanagementvirtualisationanalyticsCAPEXexpansionopexVirtual Instrumentsservice provider

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