Channels more successful with VMware’s ‘end-to-end’ solutions story: Andy Banks

Distributors are catalyzing the cloud market much faster and many virtualization channels are transitioning towards selling cloud based solutions, says Andy Banks, VMware.

VMware continues to lead the virtualization space as most organizations tread the path to virtualize their IT infrastructure. From virtualization across -server to storage to desktop to application - the companies are reaping the benefits of agility,cost savings and manageability. The channel centric company is also enhancing its distribution ecosystem as hybrid cloud and end user computing become prevalent across modern organizations.

ChannelWorld India spoke to Andy Banks, Vice President - Global Distribution, VMware. It is the transition from single point product sale with VMware vSphere ESX evolving into solutions sales where we see the big opportunity for channels, says Banks at VMware.

Excerpts from the interview.

How big is the virtualization opportunity for enterprise channels? Does it differ across globally, APAC and India?

The overall market is fairly virtualized globally right now. In last seven years we have grown our market based on especially one product vSphere ESX.  I had still say there is untapped opportunity in emerging and developing markets around driving better penetration with virtuslaition. India for example we have a significant opportunity to grow that business.

In US, more than 70% to 80% is virtualized and opportunity is more or less limited from growth perspective. We see the next growth in next generation products – the non-core solutions that are beyond virtualization. Virtualization with operations management (vSOM), Virtual SAN (vSAN) are few such solutions. We see hybrid cloud as well as end user computing area specifically around air watch to continue generate good business for us.

It’s not only about virtualization with VMware for our channels. More than 60% of our overall business today emerges from ‘non-core, non-virtualized’ solutions. We have diversified our portfolio from core business of VMware towards adjacent markets like airwatch (mobility) and cloud. vSphere ESX remains our core business and everything else we call high growth or non-core business.

Do you really feel India market is underpenetrated in virtualization across server, storage and networking?

I do. I think the server market in underpenetrated from a virtual standpoint. Even there are many companies in India that are still to traverse virtualization in storage and networking.  From a comparison perspective of the markets of similar size, we strongly believe we have significant opportunities for growth in India.

How has the face of distribution changed for virtualization over the years?

In the first year of my role when I joined in 2013, I focused on listening to the distributors (distys) to understand their pain points and how we can work well together, where we had challenges. We came to a conclusion to simplify the rebate structure and gtm enablement, we working hard on simplifying and streamlining out incentive process in past two years. And I believe we have accomplished that though there is still room for improvement. We are getting good feedback now on how we changed the whole incentive structure with distribution to really drive growth hand-in-hand with profitable growth with our distributors.

Does the distribution ecosystem consist more of value-added distributors (VADs) for solutions-oriented field of virtualization?

Distys don’t necessarily like to be considered as volume or value as they all provide certain solutions and address a specific market.  We work with large distys across the world and also niche distys across certain countries where it makes sense. We have Avnet, Ingram, micro, Tech Data, Arrow ECS to name a few on global basis and we have regional distys like Redington, Westcon in Asia and China etcetera. We try to balance the disty set-up as to what fits best in the respective country.

Any new types of challenges and opportunities you foresee in the distribution space for VMware?

Interestingly many different companies and experts researched on cloud few years ago when it started to become popular. Many expected cloud to disintermediate distribution and evolve as a direct model. It is actually the reverse.

The number of vendors developing cloud based solutions and the complexity involved with end user is huge. For example an end user dealing with fifty vendors would have twenty five with cloud based solutions. How do you implement a strategy to stay productive driving cloud adoption into your customer base? Distribution has found a niche around aggregation of those licenses and aggregation of the cloud lifting – if you will - from an electronic store front, from provisioning stand point and from a kind of burndown of credits (if there is a credit based program around cloud).

There is definite opportunity for distributors as they expect millions and millions of dollars on their electronic storefronts and cloud based solutions to help aggregate and take out that complexity out that from end user perspective.

Distributors (from PCs to storage /servers to virtualization to cloud) would be important module in modern technology landscape.

Absolutely. Our business has increased through distribution. We have an aspirational goal to drive revenues of USD 10 bn dollars and distribution will play a big role in that growth. It may not be necessarily the same partners that we deal with now. It may be a mixture of our OEM partners, our systems integrators, and cloud partners that we work with.

We have well aligned distributors in India too who are enabling their channel partners across the portfolio of VMware including cloud based solutions.

What are the emerging opportunity for enterprise channels in 2016 and beyond? 

We are in an age of transitioning a channel from pure hardware-software sale to a solutions sale. We transitioned our company similarly five to seven years ago with a single product sales motion around vSphere ESX. It had a very easy ROI TCO model with server consolidation for channels to sell without much technical pitch beyond a point.

Fast forward to today, it is a very complex environment. Selling IT and Business outcomes are based on solutions sale wherein vSphere maybe one aspect of it. We have been focused heavily to transitioning our sales teams and in turn we need to do the same for channels. They should be enabling and training the channels from a single point product sale to selling end to end solutions based on IT and business outcomes. It’s that walk that we are working with channel team and our BDMs to help channels and resellers become solution oriented.

Also we have a complex GTM with direct model, OEM model and channel model and hence we touch many different vendors in our solutions sales. It is the transition from single point product sale with VMware vSphere ESX evolving into solutions sales where we see the opportunity for channels.

And what about the opportunity with AirWatch acquired by VMware in 2014?

When we acquired AirWatch, we were very careful to ensure the revenues of Airwatch do not dip because that company had a direct model.

In July 2015, we eventually helped them walk through the evolutions and we are driving more business for AirWatch through channel program. We are leveraging VMware distributor model to bring AirWatch channel partners in VMware Partner Program.

AirWatch under VMware is a good opportunity for channels. AirWatch business is more around security and mobility than just about the device management. Partners with consultative practice can leverage the benefits of AirWatch MDM as enterprise devices swell in future.

A predominant enterprise to large enterprise vendor VMware now caters well to mid-market and SMBs. Do you have different  distributor ecosystem for SMEs?

We do have different flavors of vSphere and VSOM for enterprise market and the entry level mid enterprise market. We have also segmented internally around enterprise, enterprise select and commercial (low end enterprise) in our sales approach two years ago.

With Dell’s acquisition of EMC, the synergy of SMB will become more visible. Dell will help us in the customer base of low level enterprise to mid-market. There is definite enterprise opportunity as well once the deal goes through.

What does the announcement of DELL EMC merger mean to VMware and its channels?

We are very excited about merger of dell EMC deal. CEO Pat Gelsinger has been very clear around the messaging on what the merger means to VMware. To be frank nothing will change in terms of our GTM and our strategy. Since EMC owns 81% of VMware, we really maintain arm’s length from each other to focus on our individual strengths.

The synergy between EMC and Dell will be beneficial as EMC from high enterprise is moving down market while Dell dominant in SMB and commercial is now moving upmarket into enterprise accounts. There is very little overlap. We are very bullish and nothing will change from our end in terms of channel strategy.  

A key challenge for channels is the training and skillsets around complex domain of virtualization and cloud. Has VMware added enough skillsets at the end user and the partner organizations?

From vSphere virtualization perspective, our customers are very sophisticated. However I agree that there is still opportunity to train our customers in few emerging markets.

It is very similar to how Cisco in late nineties wherein CCIE (Cisco Certified Internetwork Expert) was the pinnacle of knowledge. The vendor only had the knowledge and the end users were fairly naive. That is necessarily not the case with vSphere and virtualization. We have done good job in enabling the channels and in turn empowering the end users to help them become self-sufficient and self-supportive around these technologies.

Beyond vSphere, we have room to be covered to train our channels and in turn our end users to ensure optimal skillsets available in end user computing, hybrid cloud and mobile device management.

Any Do’s and Don’ts for channels to make a good killing in the virtualization space.

Channels need to pitch end-to-end solutions sale with VMware than a single point product push around vSphere ESX. They need to have a clear position around both - services and sales. Keep a balance between just selling hardware and software and having a services approach.

Helping customers go from a perpetual based sales motion to a cloud based – kind of hybrid cloud motion is very significant. Walking with your end customer to evaluate the applications to be hosted into the cloud needs heavy consultative services approach

Do not just can rely on selling the product as today customers expect solutions to be business outcome based.

Do you expect more partners beyond the traditional channels -- maybe MSPs, cloud providers, MSSPs – aligning with VMware? Why ?

VMware vCloud Air Network Program is seeing good revenue growth from services providers and MSPs. VMware partner network is doing well too. The new portfolio of partners might not consist of all our traditional partners.

It is a general industry perception that you can’t train ‘non- cloudy’ partner to become ‘cloud ready’. When Cisco launched voice products they did not work with traditional networking partners. Most of them switched to Avaya. Cisco did not get that traction and they realized the versatility of the channels to adapt to market reality and technology curve. Today majority of Cisco partners implementing voice solutions are their traditional networking partners.

The tenacity of the partner base to embrace the new technology is pretty high. And I strongly believe a fair number of VMware virtualization partners will make the transition to cloud faster than expected.

   

    Yogesh Gupta is executive editor at IDG Media. You can reach him at yogesh_gupta@idgindia.com or follow him at @yogsyogi1