Vendor Management Strategies for the CIOWhen VARs register deals through select OEM partners, VMware will recognize them as the partner of record and provide opportunity protection.
Requires Membership to View
To gain access to this and all member only content, please provide the following information:
By submitting your registration information to SearchSystemsChannel.com you agree to receive email communications from the TechTarget network of sites, and/or third party content providers that have relationships with TechTarget, based on your topic interests and activity, including updates on new content, event notifications, new site launches and market research surveys. Please verify all information and selections above. You may unsubscribe at any time from one or more of the services you have selected by editing your profile, unsubscribing via email or by contacting us here
- Your use of SearchSystemsChannel.com is governed by our Terms of Use
- We designed our Privacy Policy to provide you with important disclosures about how we collect and use your registration and other information. We encourage you to read the Privacy Policy, and to use it to help make informed decisions.
- If you reside outside of the United States, by submitting this registration information you consent to having your personal data transferred to and processed in the United States.
The new safeguard+ program helps protect partners' presales investments, said Ben Matheson, director of global marketing for VMware Inc. It also reduces the likelihood that a second partner will undercut the first partner's selling price when they have already invested time and money trying to close the deal, he said.
"[Safeguard+] should allow channel partners to resell OEM SKUs, and it should level the playing field," he added. "That's definitely the intent here. We want to lessen the amount of channel conflict."
Competition between OEM partners and resellers is fairly common in the VMware channel. The issue flared up last year when Dell Inc. made the decision to include the VMware ESX 3i hypervisor free with its PowerEdge servers, giving customers no incentive to choose VARs over Dell and creating complaints about channel conflict.
The safeguard+ program is a sure response to conflict between resellers and OEMs, said Marvin MacKay, sales and client relations director for VMware partner William Ives Consulting in Charlotte, N.C.
"Obviously resellers are very concerned about [OEM competition]," MacKay said. "I don't think [safeguard+] will decrease competition, but it should decrease conflict."
This new opportunity is a component of VMware's advantage+ program.
"Partners who are eligible for the safeguard+ benefit will not receive a front-end discount or back-end rebate for closing opportunities through a VMware OEM partner," Matheson said. "However, if approved for an opportunity, partners will receive opportunity protection, meaning no other VMware partner can claim advantage+ financial incentives throughout the 120-day registration period."
When VMware partners select their fulfillment channel on the advantage+ opportunity registration form, they can indicate whether or not they anticipate fulfilling a deal through a VMware authorized distributor or a select VMware OEM partner. Once VMware approves a deal, the partner can block other partners from receiving advantage+ benefits.
"The intent there is to make sure that someone does not swoop in and exchange revenue, or basically grab margins from the partner," Matheson said.
The participating OEMs are Dell, Fujitsu Siemens Computers, Hewlett-Packard, IBM and Sun Microsystems.
The program requires a minimum deal size of $2,995 for new customers or $10,000 for existing accounts.
MacKay said channel conflict is a concern for his company, even though he has not had significant problems with OEMs attempting to steal customers.
Jack Kaiser, vice president of sales and marketing at International Computerware Inc., said there has been channel conflict in the past, but it is not currently a huge issue.
"We don't really compete with the OEMs or seem to run into problems with OEMs selling our software," Kaiser said.
When asked if the safeguard+ benefit will help halt OEMs from stealing reseller customers, Matheson said it really depends on the individual customer. "Partners can influence how a deal will close, but ultimately the customer decides," he said. "Some customers choose to purchase VMware along with OEM servers. Others prefer VMware branded solutions."