CRN: How much of VMware Australia's business is sold through indirect partners?
King: We are very partner-centric. More than 85 percent of our business in Australia and New Zealand is through channel partners.
CRN: How do you categorise your channel partners?
King: We have a two-tier mode, with two distributors in Australia (Ingram Micro and ITX) and two in New Zealand (Ingram Micro and Datastor). They provide our software to integrators and resellers authorised as Professional Partners. We also have a range of Premium Partners we deal directly with.
CRN: What about other service providers like telcos? Do you see them as customers or channel partners?
King: At the moment I guess we see them as customers. But the models are changing such that in the future, we may be talking of them as channel partners.
Telcos are looking at the public cloud - how they can make money selling services on demand.
Systems integrators are building out the internal clouds, the data centres of large organisations, using vSphere.
CRN: And what kinds of products are sold through the two tier channel to Professional Partners?
King: There is no broad generalisation that would suit. Suffice to say products at $1000 RRP or less, things like the Essentials and Essentials Plus products, are very popular with these partners.
CRN: Today VMware's Asia Pacific head Andrew Dutton told VMworld the region has some 3900 channel partners and has seen a ten-fold increase in certifications. How is Australia going on certifying VMware professionals?
King: We have 1500 VMware Certified Professionals in Australia, and we had a further 1000 go through a four day training course last month.
CRN: Dutton also said this certification is "the most valuable piece of paper you can get" in the industry. Would you honestly say it is worth more than say, a Cisco or Microsoft certification?
King: Virtualisation can lead to a lot of discussions with customers. You can put a good value proposition across in your pitch.
We also say that for every $1 of VMware license sold, there is $10 of other business there for our partners.
We even offer our partners an Excel-based tool for them to check out that equation.
CRN: Should resellers be concerned by VMware's Go program? Are these not the small businesses the channel usually works with?
King: The Go announcement is about providing new opportunities - taking those customers using our free product and offering them some support and structure. At some point, we'll see some of these customers "get" virtualisation, and there will be more opportunities coming from that.
CRN: What sales and marketing initiatives does VMware have specifically in train for its channel partners?
King: At the start of this year we announced vPractice, under which we are developing collateral to help resellers package and sell our products as a service.
When you look at what partners can make out of services, the multipliers are quite large. So over the coming months we will be releasing some recommendations as to how to price and promote services based on our products.
CRN: I imagine it must be challenging, in your job, knowing that your biggest competitor is Microsoft, which has such an extremely successful channel program and huge presence... how do you win these partners over to VMware?
King: Some of our biggest partners are also strong Microsoft partners. Some of them in fact feel the need to create a VMware practice as a separate division or line of business to avoid that conflict.
For the partner that is skilled technically, when they evaluate the products together they'll tell you what offers the best outcomes for their customers.
As far as winning over those partners goes, we see Microsoft as more of a volume-based, low margin competitor. Because of the sheer capabilities of our products, it's a different value proposition - it is less transactional and more value-based.
In a lot of ways we rely on the pull from customers, the demand from customers.
That's the only reason we have a direct sales force - to position to the end user customer the value proposition, and create a pull for partners.
CRN: Should VMware partners be looking to also gain skills and accreditation with EMC and Cisco, considering the tight integration between the products of the three companies?
King: From a customer perspective, the hardware and software is tried and tested, so it's more safe and predictable to use this combination.
But don't assume VCE will be all of our focus. NetApp has just as much to offer in terms of storage, for example.
It's about what the customer picks. If they've listened to the EMC story and enjoyed it, that's what they will pick.
CRN: The hypervisor is today most certainly a commodity - it is given away free - how will VMware stem the flow of products within its portfolio that might also become commoditised?
King: We give very little away for free, when you look at our portfolio. The real opportunity for us and for channel partners, in any case, is value-added services and products that allow the customer to do more.
There is still so much opportunity - even within the top 1000 organisations, few are really more than 20 to 30 percent virtualised.
It's virtually untapped as to where we can go from here.
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