VMware: Driving virtualisation and Cloud to the channel

VMware's John Donovan on the company’s partner strategy in A/NZ and what the channel can expect

Specialisation and segmentation will be top avenues of growth for partners in the coming years as technology becomes more complex and solution sets dominate sales, according to VMware director of channels A/NZ, John Donovan.

“We have been phenomenally successful in building a fantastic base of very, very satisfied customers with infrastructure and server virtualisation,” he said, adding that the company will aim to tap some of those relationships with newer products such as more Cloud-like services including private, public or hybrid models.

Among key priorities for the company is understanding how to segment the market through the increasingly complex solutions, Donovan said.

As part of this strategy, the company is focusing many of its own resources at the top-end of the sales pyramid around enterprise and commercial relationships, he said. “We drive everything to the channel but some lend themselves to the segmented strategy.”

In the SMB space, which is a major focus for the company in the region, its approach is becoming more and more specialised.

“[From a partner perspective], not everyone is going to be able to do everything that is fine,” Donovan said.

A specialisation in end-user computing, mobile device management, datacentres or infrastructure management, will prove fruitful. While a further specialisation into an industry vertical will be “fantastic”, he said.

Better margins

Donovan emphasised that a lot of the new technology releases from VMware will represent “significant margin opportunities.”

“As you develop more specialised solution sets, it becomes less of that ‘anyone can deliver this stuff,’” he said. “That will give enhanced profit opportunities to the partners.”

That is because, he said, in some cases, the technology requires a higher degree of specialisation while in other cases, the delivery-to-market has been made easier.

VMware is also pushing its own partner profitability programs. In addition to a “standard margin” available through distribution discounts and other deal registration discounts, the company has introduced improved rebates and discount opportunities.

“As you get more specialised, there is enhanced rebate and discount opportunities,” he said, adding its premier partners, for instance, partners get additional margin points and upfront discounts for targeting new customers, and for selling any non-core solution sets.

Supporting partners

VMware also plans to continue to boost its partner enablement programs further with investments in education, accreditation, certification, transferring company-wide technical and services level-skills to partners, said Donovan.

Last year, the company spent $377 million on partner programs globally. That number is set to increase this year, he said. It is also continuing to pass on more engineering skills onwards to partners, sharing many of the sales skills and IP know-how from its team to partners.

“We make sure we enable the pre sales guys with same skills of our own team but we go step further and focus on IP transfer at the services level,” he said.

“What we learn from field services engagement with enterprise customers we take and invest them back into solutions enablement toolkits – real world examples on architecture development, infrastructure, support and management - and give them back to the partner community.”

That helps partners get a view on how to do the implementation and architecture better, according to Donovan.

In addition, it is also working on a program to help build solutions architects within the partner community. It currently has one in-house employee whose role is to establish a services practice, he said.

VMware is currently looking at expanding that team beyond the one individual.

All of these efforts are designed toward helping the company strengthen its relationship with the channel, he stressed.

“We have to have a better relationship with partner community to help them build them recurring revenue,” Donovan said.

He noted the company’s efforts to move away from the licensing model to better manage IT transformation and business transformation, which calls for a different investment from the IT vendor than before. At VMworld, the company announced it is scrapping the pricing of its VRAM product after the results of a recent customer survey.

“We will continue to enhance the route to market models,” he said.