All the new VMware Tanzu incentives partners should know about

VMware is incentivising channel partners to drive application modernisation and Kubernetes sales with Tanzu more than ever before with the launch of several new incentives, including 30 percent margins on new customer opportunities and tens of thousands of dollars in presales and post-sales rewards.

“VMware is looking to deliver the most compelling business opportunity for partners to invest in their modern applications practice in the industry,” said VMware's Tanzu boss Richard Steeves, in an interview with CRN US.

All ANZ partners will be eligible for the new incentives and will be paid rebates in US dollars, a company spokesperson told CRN Australia.

Steeves said VMware is looking to take channel partner profitability to a new level for selling the company’s Kubernetes portfolio.

“We’re putting the dollars where our strategic intent is. It’s part of that ongoing commitment around our partner-first culture,” he said.

“In the modern application space, we are going to win together and we’re going to create profitable partner business relationships for partners to be able to build and grow practices together with VMware.”

VMware Tanzu is a suite of products and services that helps customers run and manage Kubernetes clusters across public and private clouds.

Tanzu enables customers to automate the security and delivery of containerised workloads, manage applications in production, better adopt a hybrid cloud environment, and free applications from infrastructure to help developers build modern apps.

VMware is investing in channel partners to capture the market opportunity for application modernisation with Tanzu by increasing profitability, enabling Tanzu practice development and better supporting co-selling engagements.

Here are the most important incentives and initiatives for Tanzu that channel partners need to know about.

30 percent up-front margins for new Tanzu customer opportunities

VMware has tripled the up-front margin opportunity for partners bringing in new customer opportunities to Tanzu, from 10 percent margins to 30 percent margins.

“As partners bring pipeline and register new deals and opportunities, we’re going from up to 10 percent to now up to 30 percent across the Tanzu portfolio,” said Steeves.

Channel partners can receive the 30 percent up-front incentive via VMware’s Advantage+ deal registration program when bringing in new Tanzu customers.

“It’s a significant investment in recognising the role that our partners are playing in, quite frankly, leading this in the industry and helping to accelerate the adoption of Kubernetes and application services and modernisation capabilities across the industry,” said Steeves.

US$25,000 (A$33,800) Tanzu proof-of-concept rewards

Through its Customer Lifecycle Incentives program for Tanzu, VMware is now offering an up to US$25,000 (A$33,800 at time of writing) reward for partners who conduct proofs of concept.

Bob Keblusek, chief innovation and technology officer for Sentinel Technologies, a top US-based VMware channel partner, said the US$25,000 reward for driving proofs of concept around Tanzu is a huge win for the channel.

“Not every proof of concept is going to result in a sale, obviously. So sometimes you go through the cycles, you ship product, you put it in, you get it working, you let the customer see the value, and they still don’t buy it,” said Keblusek.

“So rewarding that activity, for both the wins and losses on doing the POCs, makes a lot of sense. It increases the win rate for the manufacturer, while at the same time compensating us to put in the time for those cycles. It’s a great move by VMware.”

US$20,000 for Tanzu solution deployments, US$15,000 for technical assessments

VMware’s Customer Lifecycle Incentives program for Tanzu is also offering rewards for partners who provide customer technical assessments and Tanzu solution deployments.

Partners who conduct Tanzu solution deployments can earn up to US$20,000 (A$26,780 at time of writing).

For Tanzu customer technical assessments, partners can generate up to $15,000 (A$20,086 at time of writing) for each opportunity.

VMware’s Steeves said it’s important to know that many Tanzu opportunities start small but can quickly scale to millions of dollars.

“Most of our opportunities in the Tanzu portfolio, they can start small—really helping a customer to accelerate the adoption and standing up their Kubernetes environments,” said Steeves. “So $50,000 to $150,000 deals are quickly turning into million-dollar opportunities from a recurring revenue standpoint, as they’re taking advantage of expanding in the account and funding those activities through the incentives that we’re rewarding.”

Joint co-selling: Same invoice for partners selling Tanzu alongside ISVs

VMware offers a co-sell program between VMware Tanzu and ISVs focused on application modernisation. Customers can now buy ISV solutions alongside Tanzu solutions on the same invoice from a partner, which simplifies procurement.

To facilitate co-selling engagement with VMware sales, deals with partners will automatically become eligible for joint pursuit planning via the Partner Value Registration program.

“Regardless of how the customer is choosing to enjoy the benefits of the portfolio, regardless of the route to market—we’re looking to light up and enable those ecosystems,” said Steeves.

“What’s also compelling about the Tanzu portfolio is that it doesn’t matter which runtime environment or where the Kubernetes is sitting— it could be Kubernetes sitting on vSphere in a private cloud environment, it could be on [Amazon] EKS in the public cloud environment, it could be on one of the more than 4,500 cloud-certified partners that we have in the VMware ecosystem today, or it could be in the telco in the edge—we’re meeting customers where they are in their journey,” he said. “We’re trying to help accelerate that opportunity for partners.”

New learning subscriptions

VMware is launching new learning subscriptions for platform operators and application developers to help reduce costs and time commitment toward developing Tanzu technical expertise. The new subscriptions will be available to partners in April and include prerequisite courses aligned to VMware partner competencies and certifications for Tanzu and Spring.

By offering courses via a flexible, on-demand learning platform and eliminating the need for travel, partners can train consultants more quickly and reduce time to revenue while developing a Tanzu practice.

“What we’ve done is simply follow the needs for our partners to have more outcome-oriented, use case-based enablement to help accelerate their application modernisation skills and capabilities,” said Steeves. “It’s helping to modernise how we engage with our partners around their acquisition skill and capability overall. It’s a really compelling suite of learning services and offers.”

What VMware's ANZ channel chief had to say.

VMWare's director of partner business in ANZ Olga Specjalska weighed in on the changes emphasising the importance for partners to keep pace with customer needs. 

“Our ecosystem is our priority and we are serious about providing ways for our partners to be profitable, which is why I’m so pleased about this announcement. It builds on our Customer Lifestyle Incentives, launched last year, by providing genuine value and opportunities for our partners to keep up with customer priorities," she said in a statement to CRN.  

“There are clear indicators that show customers are moving to the application space faster than ever before. Savvy partners are investing in certifications to deliver on customer needs, grow their businesses and increase their profitability, using apps as the catalyst.

"VMware’s new Tanzu incentives are an incredible opportunity for partners with the right level of certification to drive significant value for existing customers. Whether you’re a cloud-based partner or an infrastructure partner, there’s an apps discussion to be had with your customers as they modernise their businesses, to explore new and emerging revenue streams.”