VMware Shows VARs The Money With New Incentives

VMware on Wednesday unveiled enhancements to its channel program that make it easier for solution providers to qualify for deal registration discounts and improve how they are paid and trained.

The key changes to VMware's advantage+ incentive program are aimed at helping its 10,000 worldwide solution providers, including about 3,000 in the Americas, make more money, said Julie Eades, director of worldwide channel marketing for the Palo Alto, Calif.-based server virtualization software market leader.

The first change is lowering the bar for solution providers to qualify for deal registration discounts, Eades said.

VMware has had three levels of deal registration participation for its solution providers for some time, including opreg+ for selling into existing accounts, newaccount+ for selling into net-new accounts, and influence+ for partners who work with an account but who do not close the deal, Eades said.

In the past, VMware's lowest tier of solution providers, its professional partners, were not able to take advantage of deal registration discounts. However, starting Wednesday they join the company's enterprise-level and premier-level partners in qualifying for such discounts under newaccount+, she said.

The newaccount+ discount is now available for registered deals as small as for one copy of VMware Infrastructure 3 (VI3) Foundation Acceleration Kit, which lists for $2,995, Eades said. She acknowledged that such kits may be sold for less than the list price.

Discounts for deals registered at the opreg+ and influence+ level are now available for deals totaling as low as $10,000, Eades said. Previously, a deal needed to be worth at least $20,000 before solution providers could qualify for the discount, she said.

VMware is also changing how it pays its partner rebates. The company previously paid those rebates on the back end, which is usually good for the solution provider organization but which meant less money and more confusion for the solution provider's sales reps, Eades said.

Going forward, the vendor will pay part of the discount on the front end, with the remainder at the back end, in order to make it fair for both business owners and their sales reps, she said. She would not disclose details about how the rebates will be divided, but she did say that VMware will pay a maximum 16-percent rebate.

By lowering the bar for solution providers to qualify for deal registration discounts and changing the way it pays rebates, VMware is making it easier for its channel partners to sell the technology, especially to the smaller businesses, solution providers said.

Marvin MacKay, director of sales and client relations at William Ives Consulting, a Charlotte, NC-based VMware enterprise solution provider whose customers are mainly in the law field, said that VMware is showing that it wants its partners to be profitable with the changes.

"Now we can go into smaller accounts and register a deal and know we can make money," MacKay said. "Small businesses account for about 80 percent of our business. The $20,000 bar was too high. I think they realized that it was too high."

Previously, VMware's deal registration program was a big barrier to entry into the small business market for the vendors channel partners, said Alan McDonald, president and CEO of AllConnected, a Simi Valley, Calif.-based solution provider.

"This is a big commitment on the part of VMware," McDonald said. "For server virtualization, new clients are looking to test the architecture. Our engineers tell them they can have big benefits from virtualization, such as flexibility and business continuity. The customers want to test it first. But to get the best discounts, they would need to buy $20,000 worth of software, something they would not want to do just to try it for three months."

Next: Solution Providers Applaud Discounts and Training Incenetives