VMware's Smoot said that a partner selling vSphere might see a profit of $488 per license, with a margin of about 10 percent. However, when vSphere with Operations Management (vSOM) is added, the per-license profit increases to $3,153, with a partner margin of 51 percent. And when the customer moves to vCloud Suite, the profit per license hits $8,851, with a margin of 45 percent.
After seeing the possibilities, Smoot asked, "Does anyone want to sell a naked vSphere Suite anymore?"
Smoot also told solution provider attendees that VMware has invested heavily in its channel partners. The company in fiscal year 2012 invested about $433 million in the channel, including returning channel partners $49 million in discounts from existing account sales and $42 million in new customer account sales discounts.
"We need to invest more to make this better," he said.
Smoot called out a couple of channel partners in particular as examples of how their business grew due to VMware's channel investments, including Crofton, Md.-based Force 3, which grew its VMware business by 161 percent last year thanks to getting its VMware competencies; and Greensboro, N.C.-based Varrow, which enjoyed a 100-percent business growth thanks to its end-user solutions.
PUBLISHED FEB. 26, 2013