How VMware plans to help partners take on the SMB market

LAS VEGAS- VMware Inc. (NYSE: VMW) has been placing focus on tackling the small and medium sized (SMB) market during this week’s Partner Exchange event and has made it clear that its channel partners are critical to this direction.

“You are not an extension of our sales force, you are our sales force,” Carl Eschenbach, VMware’s co-president in charge of customer operations told an audience of partners during the event on Wednesday.

The vendor first announced a new SMB specialization for its partners earlier this week. More details around the specialization will come later this year, but the vendor did begin outlining some of its marketing and training plans to take on the opportunity.

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For the first time, VMware’s go to market strategy will be more segmented, and the investment in marketing to the SMBs will be more aggressive than in the past, according to Eschenbach. The company defines SMB as organizations with 1,000 employees or fewer.

“What we want to do for the SMB community is make it simple,” he said. The vendor recently launched its Real World Advantage campaign, specifically for SMBs to learn more about VMware’s offerings, available through the company’s Grid marketing portal.

This year, the company wants to target three million SMB IT users worldwide, and will be translating the campaign into 26 different languages. VMware plans to invest 25 per cent more in the SMB segment and has hired about 40 new people on its inside sales team to drive growth, he added.

Despite VMware not focusing heavily on the SMB market, it is the vendor of choice in that market, Eschenbach argued, and virtualization is a top priority for those businesses. Now, the strategy will be around up-selling and cross-selling adjacent solutions to what some SMB customers have already invested in.

Part of that will include more SMB solution bundles, such as one for small sites with a 40 per cent discount attached to it and an accelerator kit with vCenter Operations Management Suite, Colleen Kapase, VMware’s senior director of global partner strategy told CDN in an interview.

Related story: VMware pushes for channel cloud competencies 

“For the first time, we’ll have training credits for customers, where they can do free training on the management products,” she added. VMware has been working on having the right product packages for the SMB for about 18 months now, with the launch of the vSphere Essentials and Essentials Plus packages.

The company also wants to make its training for SMB partners through this new specialization more consumable, in virtual 20 or 30 minute sessions rather than intensive courses that last several days, she said.

The company’s newly updated reward incentives, which doubled the bonus on net new accounts to 20 per cent, are also focused on the SMB, she said, since that segment is where much of the company’s new business will come from. The investment in training and incentives will also help VMware stay competitive against other companies who target the SMB space.

CEO Paul Maritz also told press and analysts during the event that VMware will take on competition with companies such as Microsoft Corp. simply by having a superior product.

Putting together cost effective bundles will be important for partners, said Tim Lewis, vice-president of sales for Kanata, Ont.-based Itex Enterprise Solutions. “It’s not that (SMBs) don’t want the value that the product can bring, it’s just that for the moment, it’s out of their reach.

The SMB market currently makes up about 30 per cent of Itex’s business and Lewis said it looks to grow that each year. “(VMware), in some of the presentations, had some really interesting notions of ways to deliver the message and the technologies to the SMB space.”

However, challenges remain with selling to the SMB market, especially with retaining sales staff who target that segment. The return is so much greater on large enterprise sales without a great amount more effort, which makes it difficult to keep the right sales people in place, Lewis said.

Several VMware execs did point out during Partner Exchange events that buying behaviour among sub-1000 employee organizations isn’t always minimal, since some small companies have sophisticated IT needs.

“I think it was supposed to compel us to consider them as a bigger opportunity,” Lewis said. “If they adopt those technologies more quickly, then they are more significant than their size would suggest.”

Follow Harmeet Singh on Twitter: @HarmeetCDN

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Harmeet Singh
Harmeet Singh
Harmeet reports on channel partner programs, new technologies and products and other issues relevant to Canada's channel community. She also contributes as a video journalist, providing content for the site's original streaming video. Harmeet is a graduate of the Carleton University School of Journalism.

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