5 Keys To VMware’s New SaaS Lifecycle Channel Program

With new channel funding for technical assessments and proof of concepts, here’s the five most important things channel partners need to know about VMware’s new Customer Lifecycle Incentive program.

VMware’s New Customer Lifecycle Incentive Partner Program

As VMware transitions into a subscription and Software-as-a-Service (SaaS) company, the virtualization superstar understands that channel partners are vital to its success.

“The future of our SaaS subscription business is dependent on partners and our channel ecosystem,” said Tracy-Ann Palmer, vice president of Partner Programs and Experience at VMware in an interview with CRN. “The whole motion of SaaS subscription is about your customers consuming and adopting your portfolio. That’s where partners play a critical role and that’s our strategy around SaaS subscription -- that our partners will become a critical and pivotal role in our SaaS subscription journey.”

To push VMware partners to drive more subscription and SaaS revenue and opportunities, the Palo Alto, Calif.-based company launched the Customer Lifecycle Incentive program today.

CRN breaks down the five main program features in VMware’s new Customer Lifecycle Incentive program that every VMware channel partner needs to know.

Funding Partners To Conduct Technical Assessments

VMware’s new Technical Assessment Program provides funding to partners to conduct customer technical assessments. Palmer said the first step in a SaaS subscription model is the assessment phase.

“A customer comes to a partner and says, ‘Hey I want to understand all of my workloads. I want to understand what’s happening under the covers. I want to move applications. I want to do migrations.’ What would previously happen is we wouldn’t incent or give partners any motion to actually drive that assessment. What we’re doing now is saying, ‘We understand that this is an important part of the lifecycle and the customer journey. This is where partners add value. So we’re going to make sure that we have an incentive, a reward to drive those assessments,” Palmer said.

“For instance, if you think about [VMware] Workspace ONE, what does that implementation plan look like? Partners play a really big role in that. And for the first time, we’re actually going to incent them for it,” she said.

Reward Partner-To-Partner Cooperation

Inside the new Customer Lifecycle Incentive program are incentives for partners who together with other partners to fulfill a customers entire lifecycle. The accelerator provides funding to what VMware dubs “sell through” partners who identify opportunities and book eligible orders, who then hand it off to another partner who activates the solution and facilitates consumption of VMware services.

“This is a game-changer,” said Palmer. “There is no deal that goes down with only one partner, it’s unheard of in our ecosystem today. The strategic nature of the Partner-To-Partner accelerator is about creating a community. Within that community, when you have a loyal and trusted advisor partner community, what happens is, they start working together and that really is the holy grail and multiplier effect. For our Partner-To-Partner accelerator, we’re saying we recognize that you’re all going to play different roles of this journey of getting our customers to that modernization. We also recognize that there’s handoffs associated with that, and we want to make sure you are incented for the part, that value-motion that you covered within that deal.”

“We want to ensure that we’re incenting the behavior to say, ‘Hey, this is my core competency. I’m going to go transact over here, but I know that I’ve got a partner who is going to facilitate all the services, they’re going to be able to help out with the consumption and adoption – I’m going to pass this opportunity to them and I will be incented for that. Because that’s the right thing to do,” she said.

Partner Funds For Proof Of Concept

VMware is providing channel partners funding to conduct proof of concepts (POCs) for customers. The new POC incentive can be captured by both transacting and non-transacting partners.

“Typically, a customer might actually do POCs of multiple vendors. I know at Rackspace, for example working with executive sponsor partners there, they would do a POC of AWS, a POC of Google, etc. So we expect in this environment that a partner is doing multiple POCs,” Palmer said. “In this instance, we really want our partners to go spend time and energy with our customers to help them truly understand what our solutions can offer, what the extension of our portfolio looks like and how that can actually help them. We want to really give our partners to opportunity to go invest the time and the energy and to do the feasibility work that’s actually required for customers.”

Flat Incentives; Doubling Profitability Opportunities

VMware is providing the all its incentives in the new Customer Lifecycle Incentive program on flat-fee basis.

“We’re not giving [deal-based] percentages; it will be a flat fee for each POC and each assessment,” said Palmer. “I can’t give you exact numbers, but I can tell you that through this customer lifecycle evolution – because it wasn’t just these three specific new incentives, we’ve also modified what we already had in place -- we went from five incentives to 13 incentives across the entire lifecycle to really support the SaaS subscription business.”

“So we’ve now doubled the opportunity for our partners from a profitability perspective. So if partners go along this journey with us, they will have doubled the opportunity,” she said. “That was very strategically intended with this new program, to ensure that as we go down the SaaS and subscription journey, our partners are growing with us as we’re growing that business.”

Opened To Advanced And Principal Tiered Partners

VMware’s flagship Partner Connect Program has three tiers: Enrolled, Advanced and Principal.

Only Advanced and Principal tiered partners are eligible to enroll in VMware’s new Customer Lifecycle Incentive program.

Palmer said the new program can “significantly” help many partners to become more strategic with VMware as it morphs into a SaaS and subscription company.

“Yes, partners have been doing [lifecycles services], but I believe there’s untapped opportunity that we have not realized – both the partners and VMware. Our business is shifting and so we want our partners to shift with us,” she said. “The reality is, we have to make partner practices and partner business’ profitable. They’re moving away from the transactional [sales] motion, which could mean we’re not driving a profitable practice for them. With this new program, we are.”