VMware sees momentum from deal reg, incentives changes

Ross Brown, senior vice president of partners and alliances for VMware

Ross Brown, senior vice president of partners and alliances for VMware

LAS VEGAS — Last year at VMworld, you’d have to excuse Ross Brown for not being quite up to speed. After all, at the time of the 2015 edition of VMware’s super-event, held this time last year in San Francisco, Brown was less than a month into his new role as senior vice president of partners and alliances for the virtualization giant.

But a year later, VMworld is here in Las Vegas, and Brown is hitting his stride as the company’s channel chief, able to hail some early successes to the company’s most recent changes to its partner program.

At the beginning of this month, VMware announced a couple of seemingly minor, but still important, changes — rejigging how it operates deal registration, and putting more focus on the “emerging star” products in its lineup.

Of the two, the deal registration changes were addressing the most pressing, and controversial, friction between VMware and its partners in recent years. Under the previous deal registration structure, Brown described the system as allowing VMware sales staff to “bet on a broken racing track” — that is that VMware sales teams would be able to sit back and wait until it became obvious which partner was going to win a given project to provide the registration and the benefits that come with it.

Brown said this behaviour had two effects — either it led to partners not investing in their services around a deal because of the risk of the deal being yanked from them at the last minute, or they would invest in services around a project, and just not tell VMware about it.

The new deal registration system is much simpler — the first to request the dance gets the dance.

“If a partner brings us a deal, and it doesn’t exist in our system, it’s approved,” Brown said.

As a result, the company hopes to be able to capture partner deal much earlier in the process, support partners in closing those deals earlier in the process, and reducing channel conflict.

At the same time, the company announced changes to its partner incentive programs, boosting incentives available on the company’s rising star products — NSX, VSAN, and VRealize. In some cases, Brown said, the company has tripled the margin boosts available to partner for those three products.

This change, as Brown explains it, is part of an overall sales motion shift from VMware, which for a long time enjoyed its position of dominance in the then all-important virtualization sphere, and largely focused on order-taking for vSphere and related offerings.

While Brown said the company believes its networking and storage virtualization and management offerings are “just as transformative” as vSphere was 12 or 14 years ago, the benefits aren’t always as immediately clear. In other words, the technology may be compelling, but it does not necessarily sell itself.

“The challenge we have is that our partners need to be the ones out there introducing these products to our customers,” Brown said.

It’s been less than a month since those changes were rolled out, but already Brown said the company is seeing benefits from the changes. In August, he reported, the number of partners doing business with VMware on a daily basis has jumped 30 per cent, typical deal size is up 15 per cent, and the number of deals registered is “roughly double” what it was previously.

Of course, partner programs are always evolving, and one of the next challenges and issues likely to face the VMware partner community is the arrival of its Cross-Cloud Infrastructure offerings, previewed here at VMworld. The products promise to help customers manage compute, storage and networking across multiple clouds in the same way its on-premise offerings work in the data centre today. But with them, they bring an increasing focus on subscription and -as-a-Service models, and very possibly the accompanying shifts in partner business models necessary to support that . Brown said he’s not yet sure exactly how that will be structure for partners — the company’s Cloud Foundations and Cross-Cloud Services are today still in technology preview — but he is sue he will not be requiring his partners to change how they do business to meet VMware’s new models.

That opinion, Brown said, is informed by his time running Microsoft’s cloud partner business under then channel chiefs Allison Watson and Jon Roskill.

“It’s super-important to not change require partners to change business models, because first, it doesn’t work, and second, most of them are professional services companies that use the technology as a hook for that,” Brown said. “The problem with [the subscription transformation for professional services partners] is that the project never ends. They have to have a model that lets them do the migration, and move on to the next. You have figure out how to make it a partner project that has a start date and an end date, but give the customer something that can be transformed into a monthly subscription service if they want it to.”