VMware Unleashes Wave Of Partner Incentives

The Palo Alto, Calif., company unveiled these and other major partner incentives at its VMworld 2005 user and partner conference last week in Las Vegas.

The VMware Opportunity Registration program, unveiled by VMware President Diane Greene and Executive Vice President Carl Eschenbach, ensures that partners get 6 percentage points for the “sweat equity” of influencing a sale they ultimately lose to a large discount reseller or third party. To qualify, deals must be valued at more than $25,000.

“We&ve seen partners do a proof of concept, and at the last minute the procurement office buys from another party. It&s not fair,” Eschenbach said. “We want to protect the people who are doing that heavy lifting for us.”

VMware also decided to open up its renewal and support contracts for partners to resell. The one-year contracts currently are sold directly. The company plans to make the contracts globally available to partners in the first half of next year.

“I am excited about the tools and best practices VMware is giving us to help us build a world-class services practice, from opportunity registration and protection, and the newly added ability to allow resellers to sell renewals of software maintenance,” said Paul Ghostine, president of Emergent Online, a Reston, Va., solution provider.

VMware also introduced its Virtual Infrastructure Starter Kit for channel partners to drive more SMB business. The kit bundles ESX, VirtualCenter, VMotion and other tools at a 27 percent to 30 percent discount.

VMware also is developing a new partner sales accreditation program the company expects to launch the first half of 2006. And last week, it launched a Capacity Planning service to be offered through VMware Professional Services and select VMware Authorized Consultants but sold and delivered by partners.

The deal registration and renewal options offer nice margins, but the service drag is between three and six times the value of the product sale, partners note.

“Six points on software is good, but VMware is a consulting services play,” said Stuart Levinsky, president and COO of Commerx Computer Systems, a service provider in Mississauga, Ontario. “Dell just pumps out licenses. I get paid $15,000 to $20,000 for assessment services. When I tender the PO, the cheapest licenses get it.”