Addressing Changes to VMware Licenses

Broadcom’s acquisition and bundling/pricing structure of VMware licensing is a big deal, for our Partner community and their customers. Organizations who rely on VMware will see pricing increases, on average of 100-400% with some as high as 800%, as the result of the elimination of SKUs and creation of larger solutions bundles with more than what they use (to learn more, visit this blog post). So Partner, what are your customers going to do about it and how can you provide the answers? Prices are going up and decisions will need to be made fast.

To get the conversation started, begin by asking customers a few questions:

1. Do you use VMware today for your virtualization stack?
2. Are you looking to stay with VMware, even with the price increases?
3. Should you consider alternatives and migrate to a Managed Cloud offering?

When your customer is planning to continue purchasing VMware licenses and build out their infrastructure as they do today, then the first detail to clarify is who was the VMware license purchased with, and is it registered with that reseller? Typically, the incumbent license Provider will have a distinct advantage if the customer wants to convert from perpetual to subscription-based licensing. However, if you have customers in this situation, Blue Mantis is one of the few Providers in our portfolio willing to take VMware license registrations and price them out in situations where clients want to manage their own infrastructure in their Datacenter vs. looking to a Cloud Services Platform (CSP) for their VMware solution.

If the decision is to take existing infrastructure and migrate it to another Cloud Solution Provider, know it’s part of a much larger discussion, and not as simple as it sounds. This will also open the door and opportunity for alternate solutions and discussions with companies like Deft, Rackspace, RapidScale, TierPoint, 11:11 Systems, Logicworks, or Public Cloud options like Azure or AWS through Pax8. ROI will need to be a consideration, both for the long term and for the months it may take to initiate and see through the migration and determine which is the right solution(s).

3 Approaches You Can Offer Customers

• Stay with VMware, absorb cost, and continue on a do it yourself path
• VMware in the Cloud through Managed CSP solutions
• Alternatives such as Nutanix, Azure, AWS, GCP in a Managed Cloud Option

Partners, you are positioned to offer VMware-based Cloud options, alternatives, and a wealth of additional/ancillary solutions that can bring value and improve the experience of your customers. Tierpoint, Rapidscale, Logicworks, and Rackspace are a few of the names that jump to mind. They have lots of options and aren’t tied to a specific technology, giving you immense flexibility. The list above, and Providers mentioned throughout this post, should not be taken as an exhaustive list, they’re just recognizable names who we consistently see achieve strong results, and have earned a high degree of trust within our community.

Shared usage is an advantage and one of the greatest reasons to move to the Cloud, it was also one of the reasons to adopt VMware when it was first launched. Migrating to another virtualization solution takes time and precise expertise to avoid business interruptions. Consulting services offered by Providers like Blue Mantis, Pax8, Rackspace, Evoque (now Centersquare), Rapidscale, Logicworks, and 11:11 Systems can help by looking at existing workloads and may even find ways to reduce the spend for each virtual workload. Also, if the client is using additional services – like colo, Desktop as a Service, or managed applications – then weigh those criteria into the decision-making process.

Don’t forget commissions, there are many ways to get paid, and be paid higher! In many cases, finding alternative Cloud options that aren’t VMware may impact commissions, which is another opportunity to get creative. Your Sandler Partners support team is always there to help Partners look at competitive options and help no matter which path your customer chooses. Does a Provider pay outright commissions, residuals, or a SPIFF? Can you utilize a combination of Providers for a different outcome? For example, running Azure Cloud consumption through one Provider while managing it through another may result in a higher commission. Alternatively sourcing a solution through a Hyperscaler may result in a residual, where otherwise there’d be none!

For answers to the many questions you may have, contact your dedicated Sales Engineer (found in the homepage of your Sandler Portal). Together, we can help you understand the available approaches, and guide your customers to the right virtualization solutions for their operational interests. Again, there is a time imperative involved, customers will need an expert to assist them at this time of transition, and you can be the one who delivers!

Get started on having the VMware conversation as soon as you can – there’s an urgency that will only grow as time passes. Sandler Partners, and the Sales Engineering team, will continue to provide more information, develop resources, and be available to help you throughout your interaction with customers. You can contact your Sandler Partners’ Sales Engineering team at [email protected] for immediate help, or find your complete support team – Channel Manager, Channel leader, dedicated regional Sales Engineer, Partner Experience, and Partner Services representative on the homepage dashboard of your Sandler Portal. Not a member of the independent Sandler Partners community? There’s never been a better time to Become a Sandler Partner, we’re ready to welcome you, and introduce you to all the benefits you have to gain!

Thanks for reading!

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