VMware Urges Channel Partners to Take Wider View of SMB Cloud Market
Vendor offers a raft of new programs, competencies, incentives aimed at rewarding channel partners for expanding market focus beyond core enterprise and commercial segments.
VMware Inc. is urging its channel partners to look to small- and medium-sized businesses (SMB) for new sales opportunities by offering an array of new programs, certifications and financial incentives backed by an ambitious marketing campaign.
The vendor, which said some 85 percent of its sales are generated by channel partners, backed its new strategy with data showing that as few as 20 percent of SMBs deploy virtualization technology while offering that its equipment is used by up to 95 percent of enterprise companies.
Now, according to Carl Eschenbach, VMware co-president, customer operations, the vendor intends to segment its go-to-market strategy by customer type and delivery mechanism—for enterprise accounts leading on sales with support supplied by partners, handling mid-sized clients jointly with the channel, and directing all SMBs to partners.
"We don't say, you are an extension of our sales force,” Eschenbach said recently at VMware’s Partner Exchange conference. “You are our sales force,” he said. “We are a channel-led company."
With the lion’s share of VMware’s 350,000 customers comprised of mid-size and large enterprises, the company believes it is leaving opportunities untapped, particularly with cloud services where the channel accounted for less than 3 percent of the vendor’s 2011 services revenue.
"Our partner community is the strategic channel for educating and enabling customers from small and medium businesses to the enterprise on the immediate opportunity of the cloud,” said Scott Aronson, VMware senior vice president, Global Channels and Alliances.
It will turn its attention to SMBs with a new marketing and advertising campaign aimed at some three million users at 600,000 companies, said Eschenbach. The effort will be supported by a new SMB-focused unit, additional personnel and a meatier budget to produce new tools and incentives for partners to mine the SMB market, officials said.
Included in the vendor’s stepped up partner enablement folder are new demand generation tools, customer promotions, on-demand access to free training videos and rewards for SMB-related sales.
VMware also said that it will require more of its higher level channel partners, asking Premier and Enterprise-level members to earn additional competencies, which the vendor believes will fortify the value brought to customers and boost competitive differentiation for delivering cloud computing solutions.
To make its point, the company said that its research indicated that partners backed by at least one solution competency sold, on average, more than three times more than those without higher level expertise.
Additional VMware competencies include Virtualization of Business Critical Applications (VBCA), which offers associated guidance and solutions for applications such as Exchange, SQL, Oracle and SAP; Infrastructure-as-a-Service (IaaS), to build expertise and speed up delivery of the vendor’s hybrid cloud solutions and services; and, a Management offering, related to the vendor’s vCenter Operations Management Suite, to enable and reward partners that assist customers to simplify and automate their virtual and cloud environments.
Both VBCA and IaaS are available now while the Management competency will be offered sometime in Q1 2012, the company said.
IT Partners, a Tempe, Arizona-based IT solution provider, said that it has completed the VBCA competency, providing it with tools to “engage customers to evaluate and virtualize these business critical applications,” said Bill Cassidy, IT Partners chief technology officer.
"Our customer's Tier-1 applications are those most closely aligned to the success of their organization, enabling core operations, generating revenue or supporting the delivery of critical services,” he said. “They are also the applications that are least likely to be virtualized at this point.”
IT Partners also holds VMware competencies in Infrastructure Virtualization, Desktop Virtualization, and Business Continuity.
New partner rewards and enablement offers.
VMware also added a number of new rewards programs, including an adder to its advantage+ and Solution Rewards incentives under which partners can double their payouts in 2012. Partners can gain bonuses for registering sales through advantage+ for net new customers, and those equipped with solution competencies can earn a first-time sale rebate when selling initially outside the Infrastructure Virtualization solution competency to an existing customer.
The vendor has provided channel partners with online dashboards and reports under its new Partner Rewards Incentive Management Platform to track and manage achieved rewards.
On the enablement side, channel partners with consulting practices can gain technical and marketing skills, support for technology and industry-specific expertise, joint business planning and project management help under VMware’s Consulting and Integration Partner Program (CIPP).
In addition, VMware said that it is collaborating with Cisco Systems Inc., Dell Inc., Fujitsu Technology Solutions, Hewlett-Packard Co., and IBM Corp. to allow channel members to apply their OEM-branded sales of VMware products as credits toward VMware partner programs.