Can VMware Become a Major Partner in Enterprise Software?
It’s always great to see an underdog win. The IT industry boats a long list of innovators who created breakthrough technology and propelled themselves to market leadership against much bigger and well-established competitors. VMware (NYSE: VMW) certainly fits that bill. But with the breadth of its current product portfolio and its aims to create the next generation software-defined data center, the company finds itself in the ring with enterprise software giants that may not be as nimble, but certainly are sophisticated and deeply resourced heavyweights when it comes to going to market with and through partners. In this dimension of its go-to-market strategy, the virtualization darling today is a relative lightweight.
In its defense, VMware is firing on all cylinders right now at the product level. It still has dominant share in server virtualization, is making innovative announcements in its desktop virtualization and management offering, has a robust software development platform with SpringSource and vFabric (and more than a million developers, to boot) and just bought one of the industry’s most innovative software-defined networking companies in Nicira. It’s shooting for the moon with its everything-virtualized and vCloud Suite strategies. Even Salesforce.com (NYSE: CRM) and Oracle (NASDAQ: ORCL) aren’t quite as brazen in their public messaging about being the cloud operating system leader of the future.
But, when you peel back the onion and look deeply at how fast VMware’s partners are following its pace and investing in skills beyond vSphere, it’s obvious this company only has about a solid 10 years of partner engagement under its belt. Here are the challenges this channel underdog needs to tackle for its partner enablement and engagement efforts to keep pace with its overall growth plans:
- Legacy VARs – Its VAR/solution provider audience is pretty loyal, but they aren’t investing in skills beyond vSphere anywhere near fast enough to support the growth the company needs. Because many of these partners haven’t deeply invested yet in desktop virtualization or cross-platform systems management (at least not with VMware’s products), they are overly dependent on the margins from server virtualization, which has become highly commoditized (thanks to more than a little help from Oracle and Microsoft!).
- Big SIs and Outsourcers – VMware now has a broad solution set for large enterprise companies building private clouds and custom apps. But, its engagement with global SIs and outsourcers is very new and not well-resourced at the field level. Much like many engineering-driven cultures, the company doesn’t broadly understand a services-led sales strategy, business process re-engineering or long sales cycles. The big SIs clearly see the services opportunity, but aren’t yet getting the scale of enablement and field teaming they need to jumpstart their cloud practices.
- ISVs – VMware’s open source, multicloud strategy sounds good in slideware. But, much of its software development vision is for new, built-for-the-cloud apps. However, its application modernization evangelism flies in the face of many legacy ISVs that are in no hurry to modernize their applications and the big SIs with longstanding Siebel, SAP (NYSE: SAP) and Oracle practices. Neither is pushing its customers to shut down or port over those cash-cow legacy apps. The SpringSource developer community has to get connected to at least the older custom Java apps already running in most big enterprise companies, let alone to the legacy apps written for every flavor of Unix and mainframe that are still chugging away in the back office.
- Service Providers and MSPs – VMware has done a good job here courting these IT-as-a-service innovators and has a pretty broad community. But, rather than just continuing to sell perpetual licenses here, it has to seriously ramp its efforts to help these companies build downstream channels of ISVs or resellers of their own. How service providers can make money building services around the vFabric application development platform and the vCloud Suite is not all that clear or prescriptive, at least not yet.
Make no mistake about it — VMware is and will be a major contender in next-generation software infrastructure and applications. Its rate of growth and its continued commitment to go to market with and through partners, however, is the element of its strategy that’s most in question right now. Or, at risk: Many companies at similar points in their growth plans got impatient or mercenary and bypassed partners in their rush to bring innovative technology to market.
VMware has the opportunity be as innovative with its partnering strategy and investments as it is with its technology. It can be more creative and nimble than Oracle in how it trains partners on its technology. It can be more focused than Microsoft (NASDAQ: MSFT) in the quality and quantity of partners it needs to make key market advancements. It can be more bold and disruptive than IBM (NYSE: IBM) in its partner co-marketing around the power of the cloud. But will it?
Are you betting on the underdog or the heavyweights? Tell me your thoughts at firstname.lastname@example.org
Beth Vanni is VP of PartnerPath, which helps IT vendors elevate the impact of their partnering efforts. For more information on PartnerPath’s research or partnering development services, contact Beth at email@example.com.