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Monthly Archives: May 2011

Maritz Advises Solution Providers to Prepare for Tipping Point

CK As is expected of any IT vendor CEO, Paul Maritz often meets with our largest global partners. But to really understand the thoughts and feelings of VMware’s Solution Providers on where the cloud fits in their business planning and what role they anticipate playing as their customers move to ITaaS, Carl Eschenbach felt it was important for Paul to hear this personally.  So, during VMware Partner Exchange, we coordinated a day-long, CEO-level roundtable discussion between Paul Maritz and a number of Solution Providers just like you, who play a strategic part in VMware’s current transactional business. Partners representing APJ, EMEA, and North America spoke candidly to Paul about the “Role of the Solution Provider in the Cloud” and eloquently represented the opinion of our community of partners.
 
I’ve never hosted a working session with our CEO before, and I had my concerns about the outcome.  I wanted this  to be valuable for both our Solution Providers and to Paul.  I put my faith in the partners we had in the room to provide candid, constructive feedback to Paul.  Looking back, I think it was a great session that provided valuable insight that is relevant to many of you who are struggling with the same questions. 

Some key questions asked were, “What is the evolving role of Solution Providers in Cloud adoption? How do we partner with the new generation of Service Providers to bring value to our customers while supporting IT as a service? If we (the solution provider) bring a Service Provider into the opportunity, how do we remain the trusted advisor to our customer?"

The input we received was that our partners are looking for VMware’s help in assessing the Solution Provider and Service Provider business models. They want to understand the value each type of partner brings to the customer.  They asked about the margin opportunity, and the challenges they should be prepared for.  Ultimately, Solution Providers are trying to map their own business to these evolving models.

Paul shared his belief that Solution Providers will play one of the biggest roles in the future of the Cloud,  and that our partners will work with their customers to guide them from where they are today to ITaaS.  He also pointed out how Solution Providers can capitalize by being on the front-line as the trusted advisors to help clear the customers’ path to cloud services.  “It’s going to be a long journey …slow..slow.. slow.  Then suddenly Fast! Fast! Fast!  The key is to prepare for it and be ready for the tipping point,” said Maritz.

Many participating partners shared that VMware is the first and only vendor who has shown the kind of thought-leadership our partners need to help them figure out how to transform their business as cloud computing becomes mainstream. 

Samantha Mudd, Director at Phoenix Software Ltd, and one of VMware’s Premier Solution Providers in EMEA stated it so well.  “It was an honour to meet with Paul Maritz and understand his vision for how VMware can deliver “Your Cloud” technology to our customers to the diverse sectors in the UK (private, public, academic, etc.).  The next step for a Solution provider like Phoenix Software is to understand which partners share the same values around using V-Cloud as the platform, so that we can collaboratively go to market and offer SaaS / PaaS to our customers, as well as on premise solutions. Guidance from VMware on how to model this partnership would be incredibly useful as we are moving into virgin territory. We have already identified an ISP partner to work with, but we are both grappling with how to jointly bring this to market and achieve both our individual company goals – and more importantly offer our customers something that is profoundly of commercial interest.”

We also talked about how today’s Solution Providers need to offer services such as business architecture and re-process engineering, so they can help re-architect their customer’s current IT environment into new IT cloud solutions. As one Solution Provider mentioned, the biggest issues customers face from IT today include, “How do you do a charge back?” and “How do you offer IT as a service?”  The general consensus from the partners was that they don’t typically have this type of in-house expertise.  They need help keeping up their profitability with VMware, with services as a key component, so they can continue to invest.  Investing in the cloud is a long-term, multi-year process. 
Carl Eschenbach said this well during his keynote session – . that VMware has at least 4 examples of how partners can start transforming their business to sell and leverage clouds. 

1. Figure out who you want to partner with from an influence perspective. Set up referral fees or agency fees where you are referring your customers to a VMware vCloud partner.
2. Resell the cloud-provider’s solution. Not just an agent fee but resell and add your own margin with it to sell backup recovery services, real-time application services around vFabric.
3. Sell it as a white label. We've actually seen a number of our very creative and thought-leading partners go out and say, I'm going to sell a white label using my company's name on a cloud service. You can sell it into the market and say you're in the cloud business today.   And you partner with one of the VSPP partners.
4.  “Partner with a VSPP partner . You build your own “cloud in a cage”. You own it, you service it, you support it, but you don't have the infrastructure and capital  costs to start up the data center. This allows you to sell your own branded cloud service.

The issue is complex.  The round-table participants are putting executive level teams on task to figure out the right business model.  Paul expressed that the session was extremely valuable, and as partners took the stage at VMware’s Partner Awards banquet to receive their global awards, it was apparent that he had personal recognition of each of these partners.  I want to personally thank all our participants – you represented your fellow partners well!

-Colleen Kapase
Sr. Director, Global Partner Strategy