At its first ever VMworld event held in Europe, the virtualisation vendor avoided its usual virtual environment mantra and became the latest in a long line to jump on the services bandwagon.


VMworld Europe 2008, which took place last month at the Palais des Festivals in Cannes, saw 1,200 partners and more than 4,500 delegates walk through its doors.

The three-day event featured a section of keynote speeches by VMware and partners, as well as more than 90 technical overview and deep-dive sessions, hands-on labs, solutions overviews and customer presentations.

Diane Greene, president and chief executive of VMware, kicked off VMworld’s partner day with her keynote speech. “VMware made $1bn (£500m) last year making an 88 per cent growth ­ 75 per cent came from our partners, 90 per cent of that being from EMEA partners,” she said.

Greene said that VMware wants to do everything it can this year to help its partners discover new opportunities. She revealed that of all the enterprise customers that purchased VMware last year, only 10 per cent bought over 100 licences.

“Desktop virtualisation is a hot topic at the moment and VMware expects a lot of growth in this area, but to do this partners need to push the message of embracing an infrastructure change to its customers,” she continued.

Carl Eschenbach, European vice president for worldwide operations at VMware, used his speech to highlight how to conquer the market with VMware.

“VMware has a broad and rich partner base and it is only successful because of the success of its partners, but there is still a lot of untapped space to cover,” he said.

“In the SME space alone last year, $67m was made with 35 per cent of that coming from VMware’s EMEA partners. Virtualisation is the driver behind this success and the opportunity for services is very important here,” said Eschenbach.

He added that services and support can be offered to customers through hardware, software, IT consulting and education.

John Rollason, EMEA product marketing manager at vendor Network Appliance, said: “NetApp offers services and specialisation in virtualisation to its partners through sales and pre-sales training.”

Rollason said NetApp is putting its money where its mouth is in terms of services and support, and other (vendor) partners should do the same: “An incentive to do so is shown by the fact that for every $1 VMware makes, its partners make $10,” he added.

VMware’s Eschenbach emphasised the importance of services to customers. “Services knock down the barriers when choosing to adopt virtualisation. Embracing virtualisation will only happen with a change of IT culture. Before it was one server, one application and so on, so partners need to encourage customers to overcome that barrier and absorb VMware.”

“Services drive deployment. With a recession increasing and IT managers’ budgets decreasing, they are being asked to do more with less. In turn, the better services partners offer their customers, the higher the service the user can achieve to build a better business,” he stressed.

“Let us push this from organisational silos to services and from consolidation to strategic alliances to transform IT from being cost centred to flexible business architecture for customers. Talk to customers showing you understand their needs, so they will respond.”

Eschenbach explained that through VMware’s Advantage Partner Programme, the fourth quarter 2007 closed nearly $30m worth of deals compared to Q1 2007, which saw $5m of deals closed.
“VMware is not looking for more partners, but wants to accelerate the success of its existing ones. For 2008 let us extend our footprint and go wide with the virtualisation adoption rate. We are in this race together,” he said.

Lindsay Garrod, marketing manager at VAR Virtualize IT, explained what the reseller means by the word services. “Virtualize IT offers an analysis of a customer’s complete network, so they can see how virtualisation will benefit them,” she said.

“It is a strategic manoeuvre not just to sell virtualisation licences, but to virtualise the whole network and see where virtualisation can benefit the customer. Through this they gain your trust and then have the option of whether or not they go along with the change,” added Garrod.

Karthik Rau, marketing vice president at VMware, advised VMware partners by saying: “IDC estimates that $40m is spent per year by businesses on their IT infrastructure ­ use that as your starting point for the market space. VMware is not especially aimed at big or small customers and it is continuing to move further downstream to smaller customers, so focus there.”

He said the best way to educate the user is to put the technology in their hands. “Virtualisation is a flexible IT, but managers have to change the way they view it and have to learn how to deal with the physical and the virtual world. This is where the partner comes in with service offerings.”

Rau added that virtualisation had evolved from compatibility and managing a virtual environment to how to integrate virtualisation and innovation. He said it has now shifted again to partners differentiating through services. “Virtualisation has evolved further and 2008 is the year of automation for VMware.”

Terry Walby, director of datacentre solutions at Computacenter, said the corporate VAR has invested internally to improve its customer services: “Computacenter offers maintenance and support services for its customers. It has also made internal investments in its service with 30 to40 per cent internal growth achieved last year.”

“Partners also have the opportunity to value-add services in areas that are not just concerned with virtualisation,” he added.

VMware encouraged its partners to create a service catalogue, which will demonstrate how their customers can stay compliant with policies and legislations.

Rau added: “This will deepen relationships with customers, differentiate and serve as another value add. Virtualisation is a movement and an opportunity for partners to grow their services with their customer base.”

Jon Toor, vice president of marketing at input/output (I/O) vendor Xsigo, said: “Customers are not experts on virtualisation, so services are important. Xsigo has created its product so that the partner ecosystem can easily understand it. As a customer I would expect these services to be met properly.”

Raj Mehta, managing director of distributor Centia, which was acquired by DNS Arrow in September last year (CRN Online, 7 August), explained how the distributor offers services to its VARs.

“Centia does not have a channel itself, so it provides services for its resellers. These services complement the VARs’ own, for example, an analysis of a customer’s infrastructure design,” he said.

In March 2007, IDC predicted that virtualisation on the desktop market was expected to be worth $1.1bn compared to the $0.2bn it is valued at now.

Matt Piercy, northern EMEA channel director at VMware, said: “Desktop virtualisation seems to be the next big thing, so VMware will offer more tools and sales collateral in this area.”

On the subject of other vendors, such as Microsoft and Citrix encroaching in the virtualisation space, he added, “VMware will not continue to dominate the market if it focuses on what the competition is doing, but it will continue to dominate if it focuses on its partners and what they do.”
However, VMware competitor Citrix felt that VARs are capable of making their own decisions
surrounding services and offers its own support as a backup.

Paul Dobson, senior manager for EMEA corporate communications at Citrix, said: “Citrix allows its customers to make their own services and we are there as a back end for support. Citrix does not want to push its VARs into providing services that are wrong for them, when they can make money from their own decisions.”