VMware earlier this week unveiled its Enterprise Purchasing Program, in which customers purchase tokens and redeem them for VMware product licenses and support and maintenance services over the course of a three-year contract.
VMware's EPP program's minimum deal size is $250,000, and for this amount, the customer gets 2,500 tokens and the ability to manage how they are used through My VMware, the vendor's self-service customer portal.
So instead of VMware giving the customer a quantity-based price quote, customers manage everything on their own using the token system, which takes the guesswork out of large transactions, Ryan Knauss, VMware's vice president of pricing and licensing, said in an interview.
Knauss said the EPP looks and feels like an ELA with additional flexibility. "We call it ELA in a box; it combines the best elements of the ELA in a program with more structured pricing and a robust technology back end," Knauss told CRN.
Since token management is self-service, large, multinational organizations can allocate tokens to different divisions under a single EPP agreement, which isn't usually an option with most ELAs, Knauss said.
VMware is also changing its terms to activate support and maintenance contracts at the time the customer deploys a product, as opposed to the date of purchase, which will give customers even more flexibility, according to Knauss.
"If you don’t deploy a product until the last day of the three-year contract, we are not going to subtract from your point balance until that happens," Knauss said.
VMware says EPP discounts are better than the 4 to 12 percent discounts VMware offers with its Volume Purchasing Program, a two-year agreement for smaller deals. However, VMware isn't specifying exactly what the EPP discounts will look like.
"With EPP, given the size and complexity of deals, we will offer channel incremental margins as the deal gets larger, but we are not making details public," Knauss said.
PUBLISHED OCT. 10, 2012