VMware to VARs: Move to SaaS for easy life

Vendor admits move to hybrid cloud will mean fewer big deals but insists partners will cash in in the long term

VMware has insisted that partners' lives would be much less stressful if they embraced hybrid cloud and SaaS technology.

On its Q4 earnings call last week, the virtualisation giant warned that its annual growth for the year ahead could be dragged down as its hybrid cloud and SaaS push takes off. It said that while the growth in the technology is good for the firm in the long run, the reduction in upfront revenues which are recognised will put a dent in sales.

At its Partner Exchange (PEX) event in San Francisco this week, the firm's vice president for partner go-to-market experience Colleen Kapase said this trend could be echoed in the channel, but insisted the new model has its benefits.

"Customers want to use things in a more usage-based, credit-based, 'I'm only going to pay for what I use' way – we are all familiar with that model," she said. "It's about telling partners what benefits there are to [the new model] – you become more of a trusted adviser and the customers have less resentment because they are paying for exactly what they are using and they feel that is very fair."

She said the model means the stressful rush to close deals in time for the end of the quarter could be eliminated.

"In the software world, we're all pretty used to the hockey stick at the end of the quarter – X percentage of our deals come in in the last two weeks of a quarter which stresses everyone out. When you have that monthly recurring revenue stream it begins to reduce that stress. OK, you have large ELAs which will continue to be like that, but it is a predictable model. We're doing a lot of training for partners on that model and what it means for their books and what has to change.

"For the first time we are doing training for partners' operation people. We are really used to training the systems engineers and salespeople, but this has an operational impact to them too. That seems to be helping transform partners' business models.

"I think the trend is here to stay and VMware is trying to shepherd partners through this in the most positive, thoughtful way."