VMware: Cloud Credit Program Means Up-Front Revenue For VARs

VMware Tuesday unveiled prepaid "cloud credits," revamped its competency programs and added up-front product acceleration discounts for partners who register and sell deals featuring the company's new vSphere Operations Management technology.

The enhancements to VMware's channel program were introduced at the VMware Partner Exchange conference, being held this week in Las Vegas.

The new VMware cloud credit purchasing program is aimed at helping solution providers partner with cloud service providers to offer their customers public or hybrid public/private cloud services, said Geoff Waters, senior director for VMware's cloud service provider program.

[Related: What VMware Partners Want From VMware Partner Exchange ]

Customers can purchase the prepaid credits from their solution provider and exchange them to get access to Infrastructure-as-a-Service services from a cloud provider, Waters said. Because customers purchase the cloud credits from their preferred solution provider, that solution provider then gets up-front revenue for public and hybrid clouds, Waters said.

Solution providers also can expand their product portfolio by partnering with cloud service providers and offer cloud assessments, budget assessments, deployment services and public cloud workload consulting, he said.

For business users, the advantage of using the prepaid cloud credits comes from the ability to access cloud services when needed, Waters said.

"For example, a user may need a test-dev cloud on Tuesday, but IT may not have been approved to acquire the resources," he said. "By purchasing credits, they can use the credits to get their cloud capacity on Tuesday."

The cloud credits can be used to purchase IaaS capacity from 12 cloud service providers currently, with 40 cloud service providers expected to be part of the cloud credit program by the end of 2013, Waters said.

"All of them are vCloud-powered or vCloud datacenter services providers," he said. "All are premier partners and have solution provider programs. We want to marry the two partner types."

NEXT: VMware Cloud Credit Purchasing Program Pluses, Minuses

The cloud credits expire after 12 months and cannot be resold back to VMware, Waters said. However, there is an option to extend the credits for another 12 months if requested through a service provider. There is no minimum number of credits to purchase and no volume discounts, he said.

Keith Norbie, vice president at Nexus, the Minnetonka, Minn., office of Atlanta-based solution provider Stratos Management Systems, said the VMware cloud credit purchasing program shows that VMware is looking at how to help partners succeed with the utility model.

It remains to be seen how the program will be received by end users, Norbie said. "It's a good solution for the channel," he said. "But for something like this, the market is the primary business driver."

One possible issue with the VMware cloud credit purchasing program is how licenses for technologies such as Microsoft's software is managed, Norbie said. He also said that, while vCloud is a good technology, solution providers will be competing with Amazon, Windows Azure and Google.

"I applaud VMware for having the guts to address the consumption issues related to the cloud," he said. "But the impact on the whole cloud marketplace remains to be seen."

Meanwhile, role-based competencies are now aligned toward individuals instead of partner organizations, said Colleen Kapase, senior director of partner readiness at VMware.

VMware currently offers its partner organizations the opportunity to get trained for seven different competencies, including enterprise management, virtualizing business-critical applications and IaaS, Kapase said.

Under the new program, individuals can get the competencies for themselves with specializations for sales, presales, and technical and professionals services, Kapase said.

Kapase acknowledged that solution provider partner organizations may be concerned about personnel getting the individual competencies and then jumping ship. "Under the program, if an individual leaves his or her company, there is a six-month time period before he or she can transfer the competency," she said. "And the partner organization gets six months to find a new person with the competency."

Norbie said the six-month delay between when an individual leaves his or her company and when their competency is reactivated gives the partner organization a good buffer.

NEXT: Competencies Vs. Skills

"But in the end, the focus of the partner organization should be on the individuals' skills, not on their competencies," Norbie said. "It's a good business move to get the skills needed regardless of the competency. Competencies and certifications are more for status and partner rewards."

Kapase also touted additional up-front product acceleration discounts for partners who register and sell deals featuring the company's new vSphere Operations Management, or vSOM, technology, Kapase said.

"This is the first time VMware is offering an up-front product acceleration," she said. "We want to focus partners on this solution, and are using immediate benefits to do this."

PUBLISHED FEB. 26, 2013