VMware Deal-Registration Enhancements Reflect Shifting Portfolio

**Editor’s Note: Click here for a list of June’s important channel-program changes you should know.**

VMware, the cloud infrastructure and virtualization provider, is changing its channel approach in hope of increasing partner profitability.

The company on Monday rolled out enhancements to its Advantage+ opportunity registration program. VMware says partners can now automatically validate their deal registrations without waiting for field approval. The company also promised an up to 30 percent increase in up-front margins.

The changes come as VMware shifts from a focus on computing and memory products to “viable enterprise-class products,” according to Ross Brown, VMware’s senior vice president of worldwide partners and alliances.

“We knew we had to change a little bit of our economic model,” he said. “The sales conditions for the new products – we’re now dealing with complex data-center technologies – is compelling but not as obvious as the consolidation story we had around vSphere.”

One of the resulting conditions is that customers now initiate fewer deals. Brown said that VMware’s formerly more familiar products carried enough brand recognition to more easily attract clients. But increasingly complex technologies have changed that.{ad}

“We’ve entered into a phase of our go-to-market where it’s pretty clear that our products are largely sold now rather than bought,” Brown said. “The person who is creating the opportunity is usually the only person in that opportunity.”

He said the change will streamline engagement between field and partners — and give partners confidence.

“We heard a lot of feedback from partners that it’s hard for them to invest in the resources in a deal without the certainty of the registration and the discount. Part of moving to auto-approval is to give them that confidence that will keep creating us business,” he said.

Brown also said VMware will consolidate its program’s three tiers into its top two levels, enterprise and premier, where most of the deal registration already occurs. Brown said this would allow for a “richer program” in which partners can get a higher-than-ever incremental discount on solutions like NSX and VSAN.

“We wanted to take something that was growing really rapidly and give the channel every reason to go talk to customers about it, and take the fast growing infrastructure product and make it the most compelling margin story that’s available for partners,” he said.

An additional change means automatic deal renewal for another 90 days if there is any indication that it is in motion. Brown said the change came from an understanding that deals don’t always close in VMware’s preferred time frame.

“We’re trying to reduce the amount of uncertainty, increase the predictability and increase the profitability around these products and make this an easier business to be in,” he said.