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VMware execs push partner perks at VMworld 2008

LAS VEGAS — VMware channel executives spent this morning at VMworld 2008 encouraging partners to take advantage of the vendor’s channel programs, promising margins as high as 29% in some cases.

Carl Eschenbach, executive vice president of worldwide field operations, told 2,200 Partner Day attendees that 80% of VMware’s business goes through the channel — something that needs to continue as the company pushes its Virtual Datacenter Operating System strategy.

“VMware is moving in another direction, and we’re going to be very aggressive about our messaging, but we can’t do it without you,” he said.

In a brief address to partners to start the day, new CEO and president Paul Maritz also stressed VMware’s dedication to the channel.

“This is built on a foundation of partners,” he said. “Everything we do … we can’t do it ourselves.”

Eschenbach and other execs promoted the VMware Advantage Plus program, which rewards partners for registering new customers and new deals from existing customers, as well as for influencing deals they don’t end up closing.

After VMware tweaked the program last year, participation has skyrocketed. The number of registered deals increased from 2,000 in the second quarter of 2007 to 13,000 in the second quarter of this year. And partners that are participating are experiencing 68% year-over-year revenue growth, compared to 24% for those that aren’t.

Advantage Plus gives partners 16% for registering new accounts (except entry-level partners, who earn 6%). Deal registration nets another 10%, while influencing a deal brings 6%. The minimum deal size for new customers is $2,995; it’s $10,000 for deal reggistration with an existing customer and for influenced deals.

In another seminar, Colleen Kapase, senior director of VMware’s worldwide partner practice, told partners how they can benefit by combining Advantage Plus with the Alliance Affiliate Initiative. The alliance program rewards partners for co-selling products by VMware and other vendors, and Kapase said that combo can result in margins as high as 29% for partners.

To qualify for the affiliate program bonuses, partners must register each deal with every vendor whose products they are selling. VMware is trying to develop a registration system with a single point of entry to make it easier for partners, worldwide channels vice president Steve Houck said during another seminar.

“It does become a little bit of a process, but when you’re pushing 30% incentive, it’s worth it,” he said.

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