VMware in 'Driver's Seat' But Speed Bumps May Be Ahead
|Copyright 2014 by Virgo Publishing.|
|Posted on: 02/11/2014|
**Editor's Note: Click here for our complete coverage of VMware Partner Exchange 2014.**
VMware PARTNER EXCHANGE — By virtually any measure, VMware is exceeding expectations, said attendees of VMware Partner Exchange (PEX) 2014 in San Francisco. But some partners wonder if the growth the company enjoys now will blind it from disruptive developments looming on the horizon.
VMware partners told Channel Partners that the Palo Alto, Calif., company is rocking it when it comes to sales growth, profitability, customer wallet share, engineering expertise and partner support.
“They’re really the guys in the driver’s seat now," said Brian Golden, a systems engineer with Mainline Information Systems of Tallahassee, Fla. “They are driving new business, helping us out in the field and delivering innovation." Mainline was VMware's first National Premier Partner and the 2009 VMware Global VDI Partner of the Year, according to the company.
Golden is hardly the only one with so much enthusiasm. “[VMware has] the momentum behind them now and is becoming more important to our customers," adds Greg Netzel, a partner and technical architect with ESTI Consulting Services of Saskatoon, Saskatchewan, Canada.
Amid new discussions over technology directions and partner innovations showcased at PEX 2014, partners said they believe the potential for upside is at an all-time high with VMware, and arguably greater than what they have with almost any other vendor.
That said, several partners shared some concerns. One enterprise partner speaking confidentially said, “VMware is at the very point in terms of clout and capability that IBM and Microsoft once were. When those guys got there, they both blew it [with the channel] by getting arrogant."
Others wondered if the growth that VMware enjoys now will blind it from disruptive developments looming on the horizon. Take competition. Several partners spoke of price inflation that has made their customers consider alternative virtualization technologies, such as those from Microsoft in particular.
“My enterprise Microsoft customers have licenses that essentially give them Hyper-V for free," said one VMware partner. "For first the few iterations, Microsoft’s offer wasn’t that compelling. But the latest release is ‘good enough’ for many, which puts pressure on my VMware business."
Fifteen-year industry veteran Christian Diderich, vice president of cloud service providers with Acronis, a VMware ISV partner from Woburn, Mass., offered some perspective. Some partners worry that they will wind up in a love-hate relationship with VMware based on previous experiences with other vendors, he said.
“It can happen when a vendor with momentum starts looking around at the interesting things occurring in its ecosystem and wonder, ‘hey, maybe we should do that, too,’" he said.
Like most, Acronis is excited to work with VMware and expects its business with the company to grow.
As for mainstream channel partners, they need not worry about conflict, according to VMware senior vice president Dave O’Callaghan. In his opening keynote Tuesday, O'Callaghan said 85 percent of the company’s sales have been achieved through partners. Furthermore, he added, 61 percent of partners would recommend VMware to others, according to the company’s Net Promoter Score, which is an independently measured loyalty metric and customer feedback rating. While 61 percent may not sound like a high score, it is the highest in the software industry, O’Callaghan noted.
“Our commitment will not change," Callaghan told PEX attendees. “We are a channel-led company ... [and] you are our sales strategy."
VMware revealed Tuesday that it spent more than $300 million in partner incentives, market development funds (MDF), SPIFFs and other partner activities in 2013. It also reminded partners that the company has hired more field personnel and company executives to help them at every turn.
VMware painted a compelling picture of the future. For example, VMware COO Carl Eschenbach told partners that their total addressable market in hybrid cloud computing, end-user computing and software-defined data center computing will be as much as $50 billion ( $100 billion when additional services are included) by 2016.
“If we make bold moves together, there is no question we will be the leaders in IT transformation," Eschenbach said.