The VMware cloud, the SMB, the channel

Posted by Staff   |   Tuesday, October 7th, 2008   |  

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Announcing the company’s cloud computing strategy at VMworld 2008, the new CEO Paul Maritz, didn’t convince everybody.
Part of the skepticism comes from sales channel where some VMware partners don’t recognize many opportunities to add value and instead feel that they could lose control of their customers.

About this topic, CRN published an enlightening interview with Carl Eschenbach, Executive Vice President of Worldwide Field Operations at VMware.

First of all, one of his early answer confirms the impression that the VMware cloud computing is not something that can go beyond certain enterprises:

Q: Where do you see the biggest opportunities for solution providers in the virtualized data center space? I ask because right now it seems to have a big focus on the service provider and how they can get into that market, but that doesn’t always sit well with the solution providers who, if they work with a service provider, might find that customer control becomes an issue.

A: …So what we see is, the first-generation of cloud computing will be done in the enterprise. So they will build an enterprise cloud. And when someone builds an enterprise cloud, it’s still in their data center

In our solution, our solution provider partners still gotta help them do it. There’s still significant drag on services around virtualization. The reason for that, and it hasn’t changed in the last few years, is because as people virtualize their data centers, it means they need to re-architect their networks, their storage, their server environment, and their security environment. And there’s not a lot of even enterprise companies that have all of that knowledge and skill sets internally. They look for our solution partners to help do that. Even down to the SMB.

In fact, in the SMB and commercial sectors, our customers need more help than in the enterprise because they don’t have the ability to implement a truly virtualized data center unless they go to a solution provider.

So we think that this notion of cloud compute in the enterprise, the enterprise cloud, cannot really be achieved unless you have a solution provider that knows how to implement it…

Even more interesting, another answer reveals how VMware is evaluating to change the channel program to address the fears of its partners:

Q: They’ll look at that. But they will be worried about the service provider taking over the customer account and the fact that the service provider gets all the recurring revenue, if it’s not set up the right way.

A: That could potentially be the case. But it’s not a lot different from a solution provider today selling into an account a VMware license that’s perpetual. Now, if you’re selling a perpetual license and you’re moving away from that and [your customer is] buying capacity on demand from the cloud, every time they need to do that, if they have an arrangement through a VAR or a solution provider to get access to that capacity, and they’re buying the SKU from them, they’re still engaged…

Be sure to read the entire interview as it’s worth the time.

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