VMware’s Partner Connect program now honed by ‘thousands’ of successes


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O’Ryan Johnson

“Our strategy has not changed. Our commitment to our partners has not changed. Everything we’ve committed to is exactly what we’re executing right now,” Tracy-Ann Palmer, vice president of partner experience, programs and investments at VMware, told CRN. “And we are very confident that we are doing the right things for our partners.”

If victory has a thousand fathers, as the saying goes, VMware puts them all to work in the latest iteration of Partner Connect, the company’s reseller program, which has distilled VMware’s top earners into the three areas of interest that partners can use to maximize software-as-a-service sales growth.

“The program we’re launching is the culmination of bringing it all together,” Tracy-Ann Palmer, vice president of partner experience, programs and investments at VMware, told CRN.

The Palo Alto, Calif.-based company’s 28,000 partners increased VMware’s SaaS business year-over-year growth by 30%, Palmer said. Additionally, in the past 12 months, VMware has shifted 60% of its partner incentives from perpetual licenses to SaaS.

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The changes to the partner program couldn’t come at a better time for VMware’s business. The company is in the midst of a $61 billion takeover by chip giant Broadcom. Broadcom CEO Hock Tan highlighted the need to move more VMware customers to subscription licenses in his early comments on the proposed deal in May.

“(W)e want to make it very consistent with how we run the model. And based on that, we are, in a way, restructuring the contracts, perpetual to subscription,” Tan told investors on May 26. “That’s why, depending on where you see it, you’ll see slower growth at first, if at all, followed by faster growth as we convert more to subscription.”

The changes to the program are consistent with Tan’s stated goals for the software business, as well as VMware’s goal of pushing more VMware customers into subscription licenses.

However, it remains to be seen whether the changes will stay in place after Broadcom’s impending takeover.

“We’ve been telling our ecosystem over the past 12 months that we’re on this path,” Palmer said. “We are engaged. We throw. The big launch will take place in March. We are an independent business right now. Our strategy has not changed. Our commitment to our partners has not changed. Everything we committed to is exactly what we are executing right now. And we are convinced that we are doing the right thing for our partners.

When asked if Broadcom was aware of the changes and supported them, Palmer added, “They are and will be even more so in the future, but I think everything we’ve heard is very positive around our channel, from Broadcom’s point of view. I think Broadcom has indicated that they are very interested in knowing more. »

To that end, VMware said it has identified three areas that appear among thousands of its most profitable partners, which it wants everyone to focus on now: services, lifecycle benefits and rigidity.

“Our most profitable partners do three things differently,” Palmer said. “They drive and sell advanced complex services. They focus on the entire customer lifecycle. Solid customer success, methodologies, frameworks, organization in place and driving, from resale to completion. If you speak to one of our major partners, they will tell you that it is this continuum that determines their margins. The third element is stickiness.

The program refresh also brings changes to how partners increase incentives. It removes tier credits and incorporates a point system to streamline how it categorizes partners, which can also be useful in guiding a partner’s business model around growing their VMware business in higher-value areas. high profitability for the reseller.

“Previously, tier credits focused only on performance,” Palmer said. “The point system will focus on ability and performance.”

Partner Connect is now defined by four business models: Solution Services, Solution Builder, Cloud Solution Provider, and Solution Reseller.

“When you think of our partners, what could be most valuable to them, how do they monetize their business?” said Palm. “Where do they drive the most profitability and how can we really build a healthy ecosystem with our partners, and a system that they would actually adopt.”

She said when partners push their businesses into advanced solutions, they can see margins in excess of 50%, whereas typical resale is between 5 and 50%, she said, numbers that , according to her, have been validated by the partners.

“No partner has a single route to market,” Palmer said. “They play in different markets. No partner has a unique business model. Some of them are resellers and services and some of them are getting into MSP business so they are building their own IP.

Taking into account the profile of their partner is essential to all changes. Palmer said VMware’s four-year-old Ignite program — a business practice development course that develops a partner’s capabilities in technical, sales, service and marketing functions — will now be available to all partners.

Visibility and data on partner tier progress will be available in March via a dashboard, which will provide partners with self-service access to real-time data.

“We’re moving from a model of IT journeys and tier credits to a full business model of use case solutions,” she said. “It’s all about solutions and use cases.”

    Learn more about O'Ryan Johnson

O’Ryan Johnson

O’Ryan Johnson is a seasoned journalist. He covers data center beats for CRN and hopes to hear from distribution partners how he can improve his coverage and write the stories they want to read. He can be contacted at ojohnson@thechannelcompany.com.


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