VARs Invited To Ride VMware's Virtualization Bus
That was the message delivered by VMware Director of Worldwide Channel Programs Colleen Kapase in the kick-off World Premiere Wednesday at the XChange Solution Provider conference In Las Vegas before several hundred solution providers, only 20 percent of whom are existing VMware partners.
Kapase used a real-life scenario to illustrate just how much money solution providers can make partnering with VMware. She said an actual company looking to replace 50 Windows servers at an estimated cost of $368,000 saved $190,821 by buying a five-server VMware solution at a cost of $177,779. "That is why we are hot," said Kapase. "That is our little black dress."
On the $30,098 VMware software portion of the deal, a partner could make as much as 29 percent margin, or $7,320, with the 16 percent new customer margin rebate. "That is pretty good," exclaimed Kapase. "That is why partners like us. Get on the bus!"
On top of the 16 percent rebate for new customers, Kapase stressed that every dollar of product sold in a VMware solution results in an additional $4 to $6 in services revenue. That's a whopping $120,000 in services on that $30,000 software deal, she pointed out. What's more, VMware solutions carry with them an additional $3 to $5 in product sales for each dollar of a VMware sale."This is real," she said. "I am not making this up."
Among the services VMware partners are providing are virtualization assessments, design and implementation, said Kapase.
VMware also offers a 10 percent rebate on all registered deals for existing customers and a 6 percent off list rebate for new Professional level partners. In addition, VMware has a 6 percent rebate payment under an influence program aimed at making sure partners are rewarded even if a large competitor jumps into a deal at the last minute with a lower price. "Once in a while it may happen," Kapase said. "If that happens regardless of who fulfills the product, if our partner created the deal and registered it and someone else swoops in, we still reward the partner for that sweat equity. That shows a commitment to our partners."
The VMware partnership drives home the solution provider's role as trusted adviser, said Kapase. "You saved your customers real dollars," she said. "You are improving their ability at the end of the day to manage their infrastructure."
On top of that, VMware significantly reduces power consumption, improving a client's green IT footprint, said Kapase.
Kapase stressed that virtualization is a powerful force not just in the enterprise market, but in the midmarket and all the way down to the SMB space for companies running anywhere from 10 to 100 servers."If you are sitting in this room and you have customers that have over 10 servers, virtualization is a great solution for them," she said.
For SMB customers, VMware is a "great inherent disaster-recovery solution," she said. "What we have found is that this is more critical in the SMB environment than the enterprise." Most SMB clients do not have an "easy, reliable disaster-recovery solution," she said.
To get started as a VMware partner, Kapase urged XChange attendees to fill out an online application at www.vmware.com/go/resellers.
Solution providers said they were impressed with VMware's VIP Partner program and the hefty margins surrounding virtualization engagements. "If I can make that kind of margin, I will push that product," said Kurt Naddafi, a sales manager at Stone Computer, Queens, N.Y. "I am going to follow up."
Naddafi, however, cautioned that virtualization is not an easy sell. "You have to educate your customer about what VMware is," he said. "You have to let the customer know what VMware does and how it consolidates servers. It allows you to reduce your overhead. VMware has a great channel program, but you have to have the technical knowledge to sell it. Staff training is very important."
Rex Frank, vice president of managed services at Northwest Computer Support, Tukwila, Wash., said that he is also interested in looking at a potential VMware partnership. He said up until now VMware has not had a big channel presence, which has caused some solution providers to embrace Microsoft or Citrix XenSource. "They are changing the way they support the channel," Frank said. "They have not reached out to us before."