Originally posted on CRN, written by Mark Haranas
VMware’s global channel chief, Sandy Hogan, said the “magnitude of disruption” happening in today’s IT world is causing VMware to change the way it works with channel partners, paving the way for better partnerships in the new multi-cloud world.
“For 2022, I almost call our internal theme ‘change the game’ because that’s how significant it’s going to be this year for us,” said Hogan, VMware’s senior vice president of the worldwide partner and commercial organization, in an interview with CRN. “We are creating a partner-led, profit-driven, cloud-smart ecosystem. What that means is it’s really about working with our partners across what we’re finding needs to be a very interconnected ecosystem. This notion of customer control or account control really doesn’t exist as much anymore.”
There are three fundamental focus areas for VMware’s channel organization in its new fiscal year 2023 as the company seeks to become the multi-cloud software leader: redefining partner profitability, delivering customer outcomes and creating an unrivaled partner experience.
“Providing an unrivaled partner experience is at the forefront of everything for us. That’s the core piece to partner profitability: efficiency, automation and effectiveness. VMware has been really middle of the road there in the past, and we’ve had challenges and we’re bringing it up a notch and really taking it to an unrivaled experience,” she said.
To free up partners to drive profitability, VMware is implementing and investing more in automation as well as some new visibility tools such as estimators and profitability models that help partners evaluate at the deal level.
Bob Keblusek, chief innovation and technology officer at fast-growing Sentinel Technologies, a Downers Grove, Ill.-based VMware partner, said he likes the path Hogan is creating for the channel to drive more profitability.
“Profitability with VMware has been an issue in the past, but we hope that we can find new paths to profit with some of the new programs and a continued focus on MSP and MSSP offerings. Sandy specifically called out a focus on profitability with the program direction, and recognizing there is a need to improve it will hopefully drive change through the program with more partner focus,” said Keblusek. “We are more excited now than we have been in years about the direction and how it aligns with our own direction.
Another major channel focus for VMware’s Hogan in fiscal year 2023 is delivering customer outcomes.
“That’s everything from how we co-create solutions, it’s the launching of the Customer Success Competency that is now built within the portfolio, and the partner-to-partner ecosystem that we’re really driving,” she said.
This falls in line with how many top VMware partners are creating Customer Success practices of their own.
Sentinel Technologies continues to invest in its Customer Success Management teams, driven by customer outcomes and experience. “We’re continuing to drive measurable customer success like with our Fortis by Sentinel Security Score where we run workshops, measure customers’ security maturity across the NIST Cyber Security model, and then remeasure repeatedly as we execute on a joint success plan,” said Keblusek.
The third piece to VMware’s channel strategy this year is “redefining” partners’ profitability journey.
“Because they’re creating more of these complex services, we’re actually seeing our best partners are two times to three times more profitable when they have invested in these types of new services offerings and, in particular, around customer success,” said Hogan. “We’re looking at creating new ways for our partners to develop MSP offerings and being able to publish those offerings in marketplaces so we now create that multiplier effect.”
Keblusek said he likes Hogan’s emphasis on partner-led in VMware’s channel strategy this year. “In reality, we enjoy working with our best partners and winning together but also working to ensure the customer is realizing the outcomes they expect from our vendors’ product and our services. Teaming is important for us, but when the vendor is leading the opportunity, it can be very hard to lead—especially if they aren’t sensitive to the partner profitability, it usually makes teaming very difficult,” he said. “So I like the direction VMware is taking.”
The channel changes in VMware’s new fiscal year 2023, which began this week, is based around how solution providers are creating new business models in a multi-cloud world. Hogan said over half of VMware’s channel partners are now executing on two or more types of business models.
“So the fundamental shift in direction for us will be around aligning to partner business models, meaning the more business models a partner has, they will have ease and flexibility in being able to build new practices, very quickly be able to see and apply that to their tiering status, and be able to get more enablement across all of those,” said Hogan. “So we’re moving from bucket-sizing partners in a certain type to really evolving them and enabling them to create more competencies. It’s all around accelerating their ability to build unique IP and services and differentiation that will drive more profitability for them.”
This will be VMware’s first full fiscal year as a stand-alone company following its spin-off from Dell Technologies in November.
“The future is bright,” said Hogan. “We are incredibly excited.”