As 2017 comes to a close, businesses are reflecting on the year and preparing for 2018. VMware has had a busy 2017, filled with new products and services, collaborations, and leadership changes.
Numbers-wise, the company has reported its revenue for this quarter is up 11 per cent to $1.98 billion (USD). Licenses, which VMware’s vice president of the Americas partner organization Frank Rauch calls “a great forward indicator”, is up 14 per cent. On the products side, revenue from the company’s virtualized networking security business has doubled year-over-year (YOY), virtual storage products are up 150 per cent YOY, VMWare’s compute business grew 11 per cent YOY, and mobility products increased by 40 per cent YOY.
In part one of a two-part Q&A, CDN had a chance to speak with Rauch and VMware’s Canadian channel chief, Tara Fine, about some of the successes and challenges they faced throughout the year.
(The following Q&A transcript has been lightly edited for clarity and flow)
CDN Now: Tara and Frank, what are your thoughts on 2017 now that it’s finally wrapping up? From your perspectives, how has this year has gone?
Frank Rauch (FR): 2017 has been a really, really good year for us, for the channel, and for Canada in general. Tara and her team have done a fabulous job of turning around our business in Canada. We weren’t doing poorly by any means, but we’re doing much better than we have in previous years. Partners in Canada and the rest of the Americas are really starting to centre around VMWare.
We’re also not doing it alone. We’re working with partners like Palo Alto Networks and Carbon Black on the security side, plus Google and Amazon for cloud, and HP and Lenovo for various software. So not only are we having a good year, but I believe it’s also very sustainable. All our partners are happy with our collaborations and willing to invest more in VMware going forward.
Tara Fine (TF): We’re seeing similar dynamics in Canada when it comes to partners. We had our new country manager Sean Forkan start at the beginning of 2017 and he’s really put his money where his mouth is as he continues to emphasize a partner-first approach. He’s making sure our team is leveraging partners from a fulfillment and a go-to-market strategy perspective. We’re engaging early, we’re building co-authored plans with each of our regions to build up a solid partner-first strategy, and we’re really just recognizing and leveraging our partners for their skills and relationships with VMware customers.
CDN Now: You listed quite a few partnerships there and that’s one thing I’ve noticed too over the year. Between VMWare’s collaboration with HP for a device as a service platform, Google Cloud for container services, and making VMware Cloud available on Amazon Web Services, there’s too many to count on one hand. Is there one that either of you can point to as the most impactful or one that you think will be most useful going forward and growing the VMware business?
FR: We have made a lot of partnerships, and while I don’t think I have a favourite per say, I think it’s a great strategy for us. Those that you mentioned – VMware on AWS, for example, has been really important. We had a lot of potential customers approaching us at AWS Re:Invent [held in Las Vegas from Nov. 27 to Dec. 1], which I think is a great indicator moving forward. Our PKS container service with Google will be a very big play in the new year, and same with our automated data centre security solution with Carbon Black. Our channel and 500,000-plus loyal customers are excited because they know what’s coming. The future is bright thanks to the power of our brand and our offerings of seamless workload migration from on-premise to off-premise environments
CDN Now: What challenges did you experience this year that stuck with you? What have you learned from those and how will you use those lessons going forward?
TF: I’ll start with Sean Forkan and when he came into the organization in January. There were some obvious challenges he saw in our ability to leverage partners. He’s brought forward a couple of changes that have changed the game for us and will continue to have positive effects. For example, he removed our channel tax, which made it not in the best interest of an end user customer representative to sell via a partner. Now, with that removed, they will get equal compensation whether they work with partners or not. We’re moving obstacles and talking with partners to understand what they’re looking for and how to make it as easy as possible for them to leverage VMWare.
We’ve also had a challenging time supporting our partners at a technical level, so the organization – both at the Americas level and in Canada specifically – has really come forward and supported us in being able to add resources to help our partners move forward and develop their practices.
FR: I’ll also add that in Canada, we really needed to get the right leadership in place and I think we did that with Sean, and Tara of course. We’ve invested in Canada and invested in the right business model. We’ve started expanding our margins for the channel so it’s not only about software anymore. It’s also about services and our ability to deploy.