Managed Services Pays Off for VMware

VMware staged its partner keynote address during VMware Explore this week, with some new numbers around the company’s big investment in the managed services channel from earlier this year, and plenty enthusiasm from the partner crowd attending the event. Some attendees received travel alerts ahead of the event because of the impending Hurricane Hilary, set to hit the southern California coast and potentially Las Vegas, too.

Sumit Dhawan, VMware President

“There’s no God-damned storm that can stop us from getting together,” said VMware president Sumit Dhawan, who kicked off the keynote and introduced Ricky Cooper, head of the worldwide channel and commercial organization. He was the first of several VMware channel and other executives who took the stage during the partner keynote. Other names onstage included:

  • Tara Fine, vice president, Americas Partner Organization
  • Tracy-Ann Palmer, vice president global channel sales programs, incentives and compliance
  • Eileen Gibson, head of global channel accounts
  • Anna Lawler, vice president of global channel marketing
  • Dave McGraw, a vice president from the office of the CTO

The Multi-Cloud Opportunity

VMware is talking a lot about multi-cloud and the multi-cloud opportunity for partners. VMware said that its cross cloud managed services provide partners with improved incentives, more flexibility, ease of doing business, and go to market alignment.

VMware announced major updates to its partner program in April 2023, putting the focus squarely on managed services going forward. The new parts of the program are called VMware Cross-Cloud managed services. These are a set of prescriptive offers that provide enhanced partner and customer benefits intended to help partners expand their managed services practices.

  • Hybrid cloud with the VMware private cloud and sovereign cloud offers built on VMware. This lets MSP customers leverage their current on-premises infrastructure investments using private clouds. Customers can then also have that same experience within the VMware cloud-providers, off premises.
  • Public Cloud, which is powered by VMware Cloud (VMC). Bergquist said this is starting with VMC on AWS as hybrid cloud offers for those asset-lite MSPs (i.e., those MSPs without the on-premises infrastructure)
  • Native public cloud and modern apps, which encompasses another set of services. These are designed to accelerate customer adoption of native public cloud across cloud platforms. Centralized governance is powered by VMware Aria for Multi-Cloud. Cost Optimization is powered by VMware Aria Cost, and Cloud Native App Delivery is powered by VMware Tanzu.

Tanzu is central to the multi-cloud strategy.

What is VMware Tanzu?

VMware Tanzu is a modular, cloud native application platform that accelerates development, delivery and operations across multiple clouds. The company has a vision for how partners can land, expand and grow these services in their client companies.

VMware Anywhere Workspace Opportunity

Another big opportunity for partners has been the VMware Anywhere Workspace  where managed services and customization can expand partner profitability beyond the base deployment. For instance, base services are typically $20K to $100K per project and include advisory and planning, Horizon design and deployment, Workspace ONE Deployment, and Horizon Health Check and upgrade, according to VMware.

The managed services opportunity in VMware Anywhere Workspace typically ranges from $200 to $400 per user per year, according to VMware, for services such as WSI Device-as-a-Service, Horizon Cloud Desktop-as-a-Service, and WSI Monitoring and Remediation.

The third opportunity is for packaged IP and custom services which VMware says is worth $20k to $80K per project.

From the Office of the CTO

Ricky Cooper and Dave McGraw

Dave McGraw noted that 8 out of 10 customers VMware has talked to has not implemented a multi-cloud strategy yet, and that represents a big opportunity for partners. There’s plenty of cloud chaos out there for partners to help their customers address.

“Our team is focused on being able to drive reference architecture,” McGraw said. “What’s the right thing to do in order to rapidly implement solutions that are going to meet customer requirements for performance, cost compliance, security, and so on?”

McGraw also noted that the company has gone through four stages

  • A virtualization company
  • A software defined data center company
  • A cloud-native application company
  • And entering the 4th chapter as it looks to generative AI-powered applications.

How's the Managed Service Investment Performing for VMware?

VMware was there with some of the payoff numbers around its big investment and commitment to managed services during this week’s partner keynote. For instance, Tracy-Ann Palmer said that based on a recent survey of VMware partners, partners’ managed services margins are double those reported for reseller businesses.

“We are very focused on partner profitability across our business models,” Palmer said. Additional data shows that the most profitable partners are those that focus on advanced complex services and strategic advisory services.

Tara Fine emphasized the need for relationships and trust in the market between partners and their customers.

“Every partnership is based on trust,” she said. “It’s foundational in every relationship we have.”

Jessica C. Davis

Jessica C. Davis is editorial director of CyberRisk Alliance’s channel brands, MSSP Alert, MSSP Alert Live, and ChannelE2E. She has spent a career as a journalist and editor covering the intersection of business and technology including chips, software, the cloud, AI, and cybersecurity. She previously served as editor in chief of Channel Insider and later of MSP Mentor where she was one of the original editors running the MSP 501.