A business model revolving around subscriptions, software-as-a-service (SaaS), cloud and modernisation is becoming an increasingly essential hallmark for partner organisations wanting to remain relevant in the market.
This is according to VMware CEO Pat Gelsinger, who suggests that these particular areas, while already of vital importance to the partner community and its customer-base, have become an even more essential attribute in the face of disruptions caused by COVID-19.
“Digital transformation…[is] more important in the COVID environment, not less,” Gelsinger told ARN. “Everybody gets a budget cut, but IT will get less [of a cut] in this period of time, because of those overall fundamentals: ‘I need more digital, I have remote work, etc.”
“Also, we’d say that cloud, SaaS, subscription businesses are doing better, because you need less physical assets, less getting into data centres, so they’ve grown better than on-premises businesses.
“And I think you’ve seen that clearly in the various expectations of the industry. So, the more channel partners have aligned their business to these growing trends, they’re doing better. Because that portion of the industry and approach is better, even though there’s lots of choppiness, lots of turmoil within that high level view,” he added.
Perhaps it seems like a no-brainer that the subscription-based recurring revenue model, along with SaaS and cloud should now take precedence for partners over the traditional transactional model once plied by most of the channel.
However, within VMware’s own broader product portfolio, according to Gelsinger, there has been a significant trend towards subscriptions, SaaS and cloud — all areas partners need to focus on if they want to pick up such work via VMware deals.
“And that’s a trend that channel partners need to be aligning themselves with. That’s not an individual product statement, it’s a much broader statement of adjustments of business model, how they support customers, etc. in an increasingly cloud world,” Gelsinger said.
So, how does the host of announcements the virtualisation vendor made during its virtual VMworld 2020 event, held from 29 September to 1 October, tie in with this broader trend?
From Gelsinger’s perspective, the latest updates to the company’s Tanzu platform, a portfolio of technologies aimed at helping enterprises develop new or move legacy applications across on-premises and cloud locations, represent a pretty important development for customers and partners alike.
VMware rolled out its Kubernetes technology, Tanzu, across its major software platforms, including vSphere and Cloud Foundation, in March, resulting in a major revamp of its key product families.
In VMware’s own words, the offerings of Pivotal’, which the company acquired last year, are core to the VMware Tanzu portfolio of products and services, designed to help customers transform the way they build, run and manage their most important applications.
In July, VMware launched a new Tanzu competency aimed at helping partners manage and run modern applications in the cloud.
The competency was the first in VMware’s Tanzu portfolio range and aimed to help partners build and architect a Kubernetes-based platform.
As part of its raft of announcements during VMworld 2020, the vendor flagged updates to Tanzu support across VMware Cloud on AWS, Azure VMware Solution, and Oracle Cloud VMware Solution, as well as a partnership with GitLab.
At the core of this move seems to be the role app modernisation plays, along with cloud and subscription-based SaaS offerings, in the broader context of business modernisation and digital transformation efforts across industry.
“Of the things that we talked about at VMworld, we think the most important is what we’re doing in the area of app modernisation,” Gelsinger said. “Our Tanzu portfolio, delivering now on Tanzu, on containers and Kubernetes being part of the vSphere — that would be the most important thing of the overall set of many announcements that we would have delivered there to customers overall.
“And we think that’s an area for channel and channel partners to increasingly be developing and enabling their customers with modern applications capabilities.
“If I were to pick one [thing of major importance to partners], the business model shift is the key overall secular shift that’s occurring in the industry,” he added.