VMware and its channel partners have built a tidy revenue stream from virtualization, but that's nothing compared to the opportunities that lie ahead in the cloud.
This was a prevalent theme in a wide-ranging Wednesday morning keynote speech at VMware Partner Exchange, in which VMware executives outlined how partners can move the scope of their business beyond virtualization and into new emerging business areas like cloud infrastructure, applications and devices.
The IT industry is moving toward a post-Windows world, VMware CEO Paul Maritz told an assembly of some 3,300 partners from 65 countries. Virtualization lets companies continue using legacy apps, but that's just a stopgap measure. To stay relevant in the future, they're going to have to embrace cloud computing and that's going to create lots of work for channel partners, according to Maritz.
"The cloud demands a new approach," Maritz said. "In the next five years we will see a transformation of the IT stack, starting with the infrastructure layer and moving on to apps and devices."
The good news for the channel is that the cloud opportunity is "many times larger" than the core virtualization opportunity VMware and its partners have been tapping into for the past decade, said Ragu Raghuram, VMware's senior vice president and general manager of virtualization and cloud platforms.
But cloud cuts across all aspects of IT, which means the intricacies of management, security and business continuity must be accounted for. To tackle these challenges, VMware is asking partners to move beyond their virtualization practices and stretch their skills into new competency areas.
"Partners can no longer just do virtualization," Raghuram said. "We're still surfing the virtualization wave, but at the same time we're laying down the foundation for the cloud."
VMware is investing in new competencies this year to help get partners started along the road to cloud business. Many companies that have deployed virtualization are now looking to extend their investments to tier one apps, not out of a desire for greater efficiency but because virtualization is a better way to handle management, availability and security of these apps, said Raghuram.
VMware launched a new solution competency called Virtualization of Business Critical Applications that's designed to help partners identify and deliver on these business opportunities, and Raghuram said the hope is that partners will drive virtualization from its current penetration rate of around 30 percent up to 50 percent.
Business continuity is another emerging area of business for the channel. Raghuram said it's difficult to deploy in Linux environments but is easily delivered through virtualization. Business continuity deals are also lucrative: Deals that include VMware's Site Recovery Manager are three times the size of those that don’t, and partners that have achieved the business continuity competency generate twice the revenue of other partners, Raghuram said.
VMware is working on a new competency, Cloud Infrastructure and Management, and will launch it in the first quarter through its Cloud Computing Partner Lighthouse program. VMware's vCloud Director product has been available for less than one quarter but is already the fastest growing product, in terms of unit growth, in recent memory, said Raghuram.
"This shows that customers are ready for the cloud and they're trying to figure out how to get to automated IT," he said.
VMware is building a new platform that's designed for better manageability and automation, one that can account for SLAs and performance levels. VMware in the next few weeks will debut an offering that tackles challenges at the operations management level, Raghuram said.
"This is a massive market opportunity for all of us. This assures that virtual machines and the apps inside are running without bottlenecks and meeting service levels," he said.
Next: Action At The Application Layer