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Virtustream Teams Up With Carahsoft As Government Interest In Enterprise Cloud Offerings Grows

Virtustream inked a distribution agreement with Carahsoft to capitalize on a wave of U.S. government interest in migrating larger production environments to the cloud.

Virtustream has inked a distribution agreement with Carahsoft to capitalize on a wave of U.S. government interest in migrating larger production environments to the cloud.

The Bethesda, Md. -based government IT vendor said joining forces with Reston, Va.-based Carahsoft, No. 20 on the CRN Solution Provider 500, will provide more government agencies with access to Virtustream as government departments increasingly focus on moving strategic applications to the cloud, according to Joe Moye, Virtustream's senior vice president of public sector.

"We're excited about the momentum we've got in the marketplace," Moye told CRN. "We're looking forward to turbocharging our efforts."

[RELATED: Tucci, Dell Pin EMC Growth Hopes On Virtustream]

The Virtustream partnership will open up a whole new space to Carahsoft, thanks to the company's expertise around hosting SAP environments, according to Carahsoft President Craig Abod. Abod told CRN that he expects civilian agencies, as well as state and local government SAP software customers, to be very interested in the Virtustream offering.

"The Virtustream hosting solution is some great technology," said Abod. "Any agency that's moving to the cloud should be hearing the Virtustream story."

Initial government efforts around cloud began eight years ago and focused heavily on tactical applications, as well as development and testing environments, due to the quick turnaround time and perceived lower security risk, Moye said.

"There's been a slower adoption of taking production environments off premise," Moye said.

The maturation of the cloud, however – as evidenced by the addition of cloud services to the GSA [General Service Administration] schedule a year ago – coupled with a lack of ROI around migrating tactical applications, led to increased interest in having vendors like Virtustream bring mission-critical applications to the cloud, Moye said.

To address the increased volume in the marketplace, Moye said Virtustream needed to expand its go-to-market strategy beyond major system integrators such as Unisys. Virtustream, though, is still experiencing significant resistance to taking workloads off premise from agencies such as the Department of Defense that house sensitive data, Moye said.

Government agencies will see meaningful cost-savings by taking ERP [enterprise resource planning] applications from SAP and other vendors off premise, especially since Virtustream has pioneered the ability to measure the actual consumption – rather than the allocation – of compute, memory, IOPS and bandwidth resources in five-minute increments, Moye said.

"Customer's overall bills are 30 to 80 percent lower because they only have to buy the instance they're using," Abod said. "They don't have to buy the whole server."

Abod said the offering is ideal for Carahsoft partners familiar with the VMware or SAP ecosystems, adding that his company is working in tandem with Virtustream to drive marketing and demand-generation. Virtustream has done some cross-training with Carahsoft's technical team so they can provide technical support, Moye said, though Virtustream will handle provisioning chores since it is cloud-based.

More than 100 of Carahsoft's employees support EMC Federation products today, and Abod said some of those employees will also become responsible for supporting Virtustream. Carahsoft expects that a number of Virtustream's existing partners in the federal, state and local government space will begin sourcing the Virtustream system through Carahsoft, Abod said.

Partners will realize some one-time, project-based revenue from the migration and on-boarding of larger applications to the cloud, Moye said.

But most revenue for partners will come on a monthly, recurring basis from the consumption of enterprise applications in the cloud. Moye cautioned, though, that the revenue stream for Virtustream partners will be less predictable than for managed services billed on a license or subscription basis since cloud-based consumption can vary widely from one month to the next.

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