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Top 10 Takeaways from VMworld 2016. Can VMware Deliver the Next Wave of Innovation?

VMworld 2016 General Session kicked off in Las Vegas on Monday morning with a sound of tribal drumbeats and a nice little poem loosely tied to the conference theme, be Tomorrow” The main presenter for the session was VMware CEO Pat Gelsinger – which was a change in style all previous events where former President and COO, Carl Eschenbach, has traditionally had hyper-energized approach to discussing VMware’s business and technology.

The General Sessions on Monday and Tuesday covered a lot of ground – below are the “Top 10 Takeaways from VMworld 2016”

  1. Michael Dell’s Read My Lips moment: “No Changes to VMware Open Ecosystem”

 Dell-Gelsinger

One of the questions customers and VMware followers and partners have about the Dell acquisition of EMC is, “What will the effect be on VMware hardware neutrality?”  VMware typically supports; not just one server vendor, but all server vendors, not just EMC or Dell storage, but all storage, not just one networking vendor/Dell, but all networking vendors.

So what changes will Dell bring?

At the close of the Day 1 General Session Pat Gelsinger welcomed an unannounced visitor to the stage – Michael Dell. After a friendly chat, Dell answered (at least part of) the question people had been wondering.

Gelsinger: What impact will the Dell acquisition have on the VMware ecosystem?

Dell:  “The Open Ecosystem of VMware is critical to success and won’t change” Only an ecosystem of this size and power could really pull off this cross-cloud vision…”

Will this hold true in the face of quarterly sales pressure?  It is too early to tell….

 

  1. The VMware Vision remains the same – (with tweaks to nomenclature, additional pieces defined and new products)

VMware Vision 2016

VMware has been talking about a similar vision for several years. The biggest change this year at VMworld is flushing out of products to support this vision and the new focus on being able to manage any cloud under the  “Cross-Cloud Architecture” (#1 on the list). Some of the products that support this vision are here today, and some are just taking shape. The End User Computing demo on day 2 gave a sense for the type of end user experience VMware is shooting for – but how close are customers to buying this (and how close is the complete solution?)

 

  1. 50% of apps on “cloud” in 2021? Interesting Metrics on Cloud Adoption today – and predictions for the Future

blog item 8 cloudstats

In his opening Keynote, VMware CEO Pat Gelsinger presented some interesting statistics compiled from analysts, public data and VMware data that provided a snapshot of where the “cloud” market has been – and what we may expect in the next 10+ years.

  • 2006: 98% traditional IT, 2% Public Cloud (mostly salesforce.com)
  • 2011: 87% traditional IT, 7% Public Cloud, 6% Private Cloud,
  • 2016: 73% traditional IT, 15% Public Cloud 12% Private Cloud
  • ** 2021: 50% traditional IT, 30% Public Cloud, 20% Private Cloud
  • 2030: 19% traditional IT, 52% Public Cloud, 29% Private Cloud

What does all this mean and why did Gelsinger take such pains to share these numbers? In a market that big there will be “many clouds” – and VMware wants to be the one who extends their on-premise infrastructure to manage these clouds!

  1. VMware increasing focus on $60B Opportunity with Service Providers

Big Shift to SPs buying

As customers move to cloud, service providers are buying more and more of the hardware and software required to run data centers. Gelsinger shared data that this 2016 is the year when the share of data center products purchased by service providers EQUALS the amount purchased by organizations for their IT.

VMware seems to be increasing focus on this opportunity. On the first day of the conference, VMware announced its partnership with IBM on Cross-Cloud Services, and the first opportunity he talked about in his session was what he called the the “Managed Cloud Services” (aka “Hosting”) Market. During the general session, he continually made reference to VMware’s large network of Service Provider partners, the vCloud Air Network.

 

  1. “Hyper-converged Infrastructure, Powered by Virtual SAN”

Powered by Virtual SAN

In previous years, VMware has talked about converged and hyper-converged infrastructure in terms of EVO Rack and EVO Rail and their partnerships with hardware vendors, and talked about Virtual SAN as “storage product”. At VMworld 2016, the two messaging seemed to merge – Virtual SAN is both a storage product and a hyper-converged infrastructure product (Hey, it’s a desert topping AND a floor wax! – see the old SNL fake commercial).

Whatever you call it, VMware says Virtual SAN is “in the tornado” with 400% YtoY growth, 5,000 customers, and 100 new customers every week.

 

  1. Bringing Containers into Virtual Infrastructure

vSphere Integrated Containers       Working with the VMware SDDC Stack

blog item 5 containers

 

During the Day 2 General Session, Kit Colbert, CTO for Cloud Native Apps provided an update on VMware’s approach for supporting the development of cloud native apps, and leveraging containers.

The majority of the session focused on updates to vSphere Integrated Containers including the new “Container Registry” and the new “Container Management Portal” and how the container approach leverages skills, tools and the virtual infrastructure companies already have, to provide security, management and availability to containers.

Kit also highlighted solutions that leverage the Photon platform the solution with Pivotal Cloud Foundry that was announced earlier this year and an offering with kubernetes that is coming soon.

Both VMware container product offerings are published as open source on GitHub

 

4. SDDC Products as the Building Block of Cross-Cloud Offering

blog item 4 SDDC

While the both the Monday and Tuesday General Sessions had titles that included “cloud”, the star of the show is still VMware’s suite of products to deliver a software-defined data center (SDDC). If you look carefully at the vision for Hybrid Cloud, you see it is enabled by SDDC. When you look at the layers of VMware’s Vision – Any Device, Any Application, Any Cloud, you see that the building block is the SDDC.

vSphere is the foundation of this approach, but the focus on virtualized networking and security (with NSX) and software-defined storage (with Virtual SAN) with management and automation provided by vRealize. Each of these elements continue separately, but Day 2 demo focused on how everything fits together to give businesses the agility they need, while making life easier for developers and simpler for end users.

VMware has often made a lot of product announcements at VMworld, but this year has been different. Announcements have focused on broad new product offerings and in the Day 2 General Session, VMware CTO Ray O’Farrell told the audience to expect product updates to vSphere (and we assume the rest of SDDC) at VMworld Europe in October.

 

  1. Maybe the time for Virtual Desktops and End User Computing is Finally Here?

blog itme 3 EUC

Sanjay Poonen, VMware EVP of End User Computing kicked off the Day 2 General Session by focusing on the top section of the VMware Vision –

“Any Device” with End User Computing Products that include

  • Apps and Identify
  • Work across desktop and mobile and have
  • Simple management and security built in everywhere

As discussed in previous VMworld’s, analysts and customers have shifted over the past few years to the point where VMware vision and execution are rated tops in magic quadrant and customer market share has shifted. In recent reports, VMware has reported that the End User Computing business is now a $1.2Billion business. Part of that is driven by enabling 15-30% lower costs per user driven by improvements in the products and part is attributable to the increasingly robust solution – particularly the AirWatch platform for mobile management.

Most of the session was an impressive demo that showed the capabilities of the platform to provide a simple and powerful end user experience to deliver all of a users applications through Apple devices, Android devices and Windows 10 desktops and leverage the built in identify management, security and availability of the platform.

 

  1. Security (and NSX) is everywhere – in every topic, in every demo and with every customer testimonial

security everywhere

Security was not a stand-alone topic in the General Session and perhaps this is a sign of its increasing importance and improvements in the VMware products? Instead, security and compliance were a part of the discussion during every topic of the general session.

·    Cross-Cloud Architecture

·    NSX as part of SDDC platform

·    Visibility with vRealize Operations

·    Security moving with workloads – from vRealize Automation

·    Micro-segmentation as a core capability of NSX

·    Encryption built into security policies and enabled by NSX

·    Security built into into SDDC, supporting Hybrid Cloud and Cross-Cloud Architecture

·    Security built into Horizon, AirWatch and End User Computing

 

and the #1 Takeway from VMworld is 

Cross-Cloud Architecture (including VMware Cloud Foundation and Cross-Cloud Services

Cross-Cloud Arch Ovr

All of the traditional hardware and software IT vendors have been struggling for a few years to determine what their role was in “cloud”. Some bought service providers, some built services, some tried to “SaaSify” their applications.

VMware has been on a dual approach of 1) building their own cloud service with vCloud Air and 2) selling their products as infrastructure components to Service Providers to build their own cloud offerings.

With vCloud Air receiving very little attention in general sessions and the focus on partnerships, it appears VMware seems to have pivoted on their “cloud” strategy to:

  • Offer a compatibility layer between the megaclouds (AWS, Azure and IBM) that ties to their virtual infrastructure
  • Continued/Increased focus on selling their technology stack into Service Providers.

They call this compatibility layer, “The VMware Cross-Cloud Architecture” and the 2 main components are a) new product called VMware Cloud Foundation which provides a unified SDDC platform for the Hybrid Cloud and 2) a set of Cross-Cloud Services that provide security, availability and agility – and tie to the core SDDC infrastructure. Is this really a new product or just a re-packaging of VMware’s cloud portfolio? You can decide for yourself by looking at the CTO blog (see link below) and visiting the tech previews at the VMworld hands-on-labs.

As part of this focus, VMware announced a partnership with IBM, and plans to partner broadly to this architecture as an abstraction layer across clouds.

Want more information? Follow the links below to articles, blog posts etc…

I welcome any comments below — And make sure you “Follow” our blog (look for the “Follow” link on the left sidebar) and have your say. I’m also available as a public speaker, to support local and global events in Silicon Valley, or the rest of the flattening world…

For more details, and to stay in touch with this community, contact me or Subscribe to our “Climbing Out of the Box” Newsletter via the form below.

2015 VMworld Top 10 List: What’s the Buzz?

Lots of information from VMworld 2015 and as usual the show floor was the place to check out the reality behind the PowerPoint slides…  VMware has done a better job than most tech vendors at delivering innovation and products that really help customers.  Let’s check out the Top 10 things from VMworld first 2 days.

 

  1. Cloud Academy and the “Squeaking Apps”

VMware used this surreal headmaster to introduce the curriculum at the Cloud Academy and the One Cloud, Any Application, Any Device mantra. But the guy with the cloud head was scary and when the squeaking apps attacked VMware President, Carl Eschenbach, you sensed that he really did want to kick one of the little guys…

Cloud Academy and Apps

 

  1. Applications are becoming Hybrid, Driving the Need for the Unified Hybrid Cloud

VMware has been talking about “Hybrid Cloud” for a while, but at VMworld 2015 it become “Unified”. The change to me was the focus on applications. Why do you need a “Hybrid Cloud”? Because we all know that applications are becoming Hybrid for cloud native apps, as enterprises seek to use SaaS versions of their applications and as multi-tier apps become have cloud and on-premise components…

Apps on SDDC

 

  1. Two VMware Options to Leverage Containers: vSphere Integrated Containers and VMware Photon Platform

VMware spent a lot of time talking about their approach for cloud native applications and at VMworld they put some meat and products behind the story.

  • For customers who want to use containers within their infrastructure, VMware announced VMware vSphere Integrated Containers, to allow a VMware environment to recognize the characteristics of the container and the VM.
  • For customers developing CNAs from scratch, they announced that “they would create a new platform. The approach builds on “project photon” announced in Feb 2015, and becomes VMware Photon Platform.

Integrated Containers

Photon Platform

 

  1. VMware Workspace Suite Takes Shape

For a couple of years, VMware has been talking about End User Computing in terms of “how end users access applications on multiple devices”, which encompassed mobility. At VMworld the products behind this vision became much more clear with SDDC as the underlying infrastructure, Desktop VDI consisting of traditional VDI, Mobility Management as defined by AirWatch as the second pillar, and new content collaboration tools as the third pillar of the VMware Workspace Suite

workspace suite

  

  1. Best Quote of the Keynote – from a Customer!

Fast quote

 

  1. Virtustream for Managed Unified Hybrid Cloud

Virtustream is now a Federation company, joining EMC, VMware, Pivotal, RSA and VCE. CEO Rodney Rogers outlined the value proposition for managed services above the virtualization layer. By aggregating unused infrastructure capacity into what Rogers called micro-VMs, Virtustream can drive tremendous improvements in resource utilization – and save lots of money on hardware…

microVM

 

  1. EVO Rack Becomes EVO SDDC / EVO SDDC Manager

More name changing from VMware, but the change makes sense to me… While this integrated, converged infrastructure + SDDC platform has been for some time with versions from suppliers like EMC, the full “Rack” version including VMware NSX and management has not been announced. EVO SDDC seems to come in 2 versions – one with the converged hardware and the full SDDC, and one that has the SDDC portion that enables you to manage an existing hardware stack.

EVO SDDC Mgr

 

  1. NSX is a Game Changer – Architect Security into the SDDC

NSX has been around for 2 years and VMware talked about customer momentum that was “horizontal” (not limited to a few verticals or really big companies). The Network was positioned as the underlying fabric needed for a unified hybrid cloud – but security is a gap today that the micro-segmentation of NSX uniquely solves.

NSX6.1

 

  1. Hybrid Networking is the “tough problem”: Solved by NSX in for the Unified Hybrid Cloud

Organizations cannot get to the agility they need with the current network bottleneck. By providing a virtualized layer customers are finding that NSX gives them the network services they need across boundaries – including cross-cloud vMotion!

Hybrid Networking

 

And the #1 VMworld Moment is “Cross-Cloud vMotion”

In the Monday General Session, VMware CTO Ray O’Farrell and VP of Engineering Yangbing Li demonstrated this capability, which I believe they said as in “Tech Preview” at VMworld. The industry has been looking for long distance for a while and demo of cross-cloud seemed pretty darn exciting to the audience…

CrossCloudvMotion

I welcome any comments below — And make sure you “Follow” our blog (look for the “Follow” link on the left sidebar) and have your say. I’m also available as a public speaker, to support local and global events in Silicon Valley, or the rest of the flattening world…

For more details, and to stay in touch with this community, contact me or Subscribe to our “Climbing Out of the Box” Newsletter via the form below.

Contact form

 

 

 

(Shared) Sales Force Not Selling (all of) Your Products? Three Common Levers to Create Sales Focus (Part 3 of Series)

In the first post of this series, I discussed the widespread assumption in the Tech industry that shared sales forces help encourage “Survival of the Fittest” products. In the second part of the series, I discussed a checklist you can use to determine if your products can be sold via a shared sales force.

In today’s post, I will be talking about the Pros, Cons and Reality of the “Three Common Levers to Create Sales Team Focus”

Does “Survival of the Fittest” work for a shared sales force? Sometimes, but from what I’ve seen, more often there are major distortions to the “fittest” based on other factors that drive attractiveness to sales. In my experience the products that get sold by a shared sales force are not necessarily “the fittest”, but instead, the products that meet more “human” needs – like reps looking to meet their quota, hit their “accelerators”, or even just to keep their jobs for next quarter – and are often dictated by the comp plan. The way they vote with their time may or may not coincide with what the executives feel are the longer term interests of the company. Of course, a company falters if they miss short term performance needs, but I would argue that just as many tech companies falter when they sell the “products they know, or can sell fastest, until the differentiation for those products withers and they and the company are left in a weak strategic position…

In my experience, there are 3 main tools that most tech organizations use to gain sales rep focus.

3 Tools to Manage “Product Sales” in a Shared Sales Force

  • Tool #1: Provide Transactional Incentives for Product Sales
  • Tool #2: Provide Sales Overlays to Create Additional Sales Focus and Expertise
  • Tool #3: Adjust the Compensation Plan to Provide Incentive to Sell Products

Tool #1: Provide Transactional Incentives for Product Sales

Creating Focus

Transactional incentives are the most common approach to influence sales rep behavior and focus. We’ve all seen this approach till we are numb and a bit confused by the overlapping incentives that are running from different groups each quarter.

Pros

  • $s influence a coin-operated sales team
  • Can be effective for transactional sales

Cons

Is “lack of an incentive” really the reason you don’t have focus on all your products?

Tool #2: Provide Sales Overlays to Create Additional Sales Focus and Expertise

Creating Focus

Since Overlays only sell particular products, they can’t get distracted by easier sales, and they wake up every morning trying to sell your product. Often these overlays are SEs, so they can provide both technical expertise and some sales coaching specific to the product.

Pros

  • Have a team focused on successful selling of a product
  • Provide a feedback loop for product marketing or business units seeking customer feedback on their market

Cons

  1. Typically provide double compensation for the same sale, to encourage collaboration
    • And as any sales executive knows, you don’t want to pay 120% of sales payout for 80% achievement…
  2. Sales overlays have different goals and it is common for organizations to have INTERNAL sales engagement across products. As companies get larger (think HP, Cisco, even mid-sized companies like VMware) different Reps have different agendas at the same customer
    • The Account Reps/Teams who own the overall account and get credit for all sales into the account
    • A great vendor sales rep is often quite “controlling” of the decision makers and timing for discussions within their accounts, and this instinct tends to undermine efforts by those who have different roles, including:
      • Your Sales Overlay Teams that must sell their product
      • Your Strategic Alliances that are trying to sell joint solutions into the same account
      • Your Channel partners who might be selling your product as part of a larger solution that won’t close till next quarter

Tool #3: Adjust the Compensation Plan to Provide Incentive to Sell Products

The most common approach to setting a compensation plan is “a dollar is a dollar”, where the comp plan does not differentiate whether the sale is for Product A, Product B, Training or Professional Services ($ all goes to the same place anyway, right…???)

Creating Focus

  • Quota for individual product groups. For example, a Reps $500K quarterly target might include a minimum $100K from a particular “Strategic” product group
  • Accelerators for certain “emerging/strategic” products (e.g. earn 150% quota credit for selling emerging Product X)
  • Carve-outs – making some easier, “low-hanging fruit products” or categories of sales not part of the compensation plan. For example, many/most technology vendors do not pay their field account reps for Renewals, because that might unnaturally incent Reps to “farm” the renewals business, rather than “hunt” for new business

Pros

  • $s influence a coin-operated sales team
  • Impact to compensation can be significant enough to influence behavior (more than incentives)

Cons

  • Must be utilized sparingly, or comp plan is too complex and Reps get mixed signals on organization priorities
  • Complex comp plan with accelerated payout can result in sales reps making their number, but the organization missing bookings, revenue and profit forecasts.

But here is the dirty little secret of shared sales forces…

Even if you can assign a Product-Specific quota and have an Overlay Sales Force it is quite possible that your organization will lose sales focus (and revenue) on some products

What can organizations do to have a cost effective sales force and sell all their products? In next weeks post I will talk about some “Out of the Box” approaches organizations can use to gain the cost advantages of Shared Sales Forces AND Sell a wide range of products.

I welcome any comments below — And make sure you “Follow” our blog (look for the “Follow” link on the left sidebar) and have your say. I’m also available as a public speaker, to support local and global events in Silicon Valley, or the rest of the flattening world…

For more details, and to stay in touch with this community, contact me or Subscribe to our “Climbing Out of the Box” Newsletter via the form below.

Channel Not Ready to Sell? 2 Simple Steps to Enable Channel Revenue (Part 2 of Series)

In last weeks’ post I talked about the “5 Natural Laws of Channel Enablement”, and how following these approaches can help technology vendors “Climb out of the Box™” and drive more revenue through their channels. We also talked in detail about Natural Law #1 – the importance of enabling your partners to do something specific – not just know more about your product.

The 5 Natural Laws of Channel Enablement

  1. Enable Your Channel to Do something (not Know something)
  2. Enablement ≠ Training – Training and Tools must go “hand-in-hand”
  3. Channel Sales Training ≠ Vendor Rep Sales Training – Enable Channel partners based on how they sell
  4. Enablement must be “Packaged” within a Channel Program, to drive adoption and channel revenue
  5. Sales Engagement: How channel enablement becomes revenue $

This week I will talk about talk about Natural Law #2 and difference between enabling your channel and training your channel…

(more…)

Want to Sell Solutions, But at the Velocity of Transactions: Are You Using a “Hook” to Create “Pull”? (Part 1 of a Series)

“Sales Process “is a dirty word to many technology vendors, because they interpret it to mean a slow sales approach that delays the sale of your product, and causes Reps and Sales leaders to miss their number…

As I discussed in my post, “What 3 Questions Indicate Whether You Need to Sell Solutions”, and “Are you Jumping to the Product Sale too Early (and missing revenue…), product selling works best in a few situations early in the sales cycle, and is required late in the sales cycle in nearly all tech business– but in most situations, tech vendors market and sell based on product too early in the sales cycle – causing vendors to miss revenue opportunities.

So what are proven approaches to market and sell in situations where Solutions Selling is required? That is the topic of my post today. (more…)

Predictions for the Future Path of the Data Center…

VMworld US is a few weeks behind us, VMworld Europe is in our sights and HP Discover will provide plenty of news to finish off the year.  The stream of tech industry news keeps coming with lots of buzzwords, but also lots of real change.  I’ve been thinking a lot about the future of the data center and the tech industry –  “Where is this path taking us?”

Regular readers of my blog will know that my focus is on the go-to-market (GTM) approach used by leading technology companies to connect their products to customers.  GTM encompasses corporate strategy, product marketing, specialties within marketing, sales, sales engineering, consulting, channels of all types – and all sorts of “operations” from sales ops to channel ops to professional services packaging and delivery.  All of these pieces are required to “Build a Bridge” between your offerings and your customers.

As we’ve discussed, the current “best practices” in many of these areas leave a lot to be desired. These practices reflect what worked when the leading vendors sold hardware and the channel sold and implemented hardware.  Of course, that has not been true for a long time, but that does not seem to keep tech companies from trotting out the same approach to GTM…

As the industry changes and the approach to the data center changes, the levers that drive GTM success also change – which is why I keep ruminating on the current path of the industry, and its impact on GTM. I covered some of the background on my perspective on the evolution of data center technologies – particularly the dramatic changes brought on on by VMware and virtualization.  Those posts were part of a 3-part series, and are a good starting point in connecting the dots backward, so we can extend them forward to the future…

(more…)

VMworld 2014 Recap: One-Stop Summary and Links

In my post earlier this week, What’s Up at VMworld 2014? Top 10 List from Day 1 Keynote, I listed 10 themes from VMworld David Letterman-style.  In today’s post I will sort through the announcements from VMworld, summarize the important themes and provide links to press releases, articles etc… that provide more detail and context – it’s a great way to catch up on 5 days of information!

The General Sessions are recorded and are available for reply– highly recommended!

(more…)

What’s Up at VMworld? The Top 10 List from Day 1 Keynote

Monday, August 26th was Day One of VMworld and in this post, I will reflect on what happened, and what did not happen. In my observation, VMworld is unique in the tech world in that there are actually things announced that can represent a fork in the road for the tech industry. It’s not Apple announcing the first iPhone but hey, it about as “sexy” as data center infrastructure gets…

So what was announced at VMworld so far? It definitely depends on your perspective what makes news, but below are the things VMware appeared to be focusing on. I will do the list like David Letterman’s Top 10 List (just imagine we are living in the days when he was still popular…)

#10     The Power of AND (rather than OR) (more…)

The Battle for the Next Generation of Networks: Where Will We End Up?

There has been a lot of press in the last couple of years on the next generation of the networking. The industry seems to have amassed a desire for change – but what form will that change take?

I talked about the evolution of the data center in a series of posts earlier this year called “Where is all this Going” and the second installment focused on the impact of VMware and virtualization and the pent up demand for change in the network.  I was talking to a friend and colleague a few weeks ago who worked at VMware starting in 2000 – long before VMware even had ESX…  He’s now involved in developing products for the next generation of networks and I asked him a simple question,“

“How does the level of customer pain from the network today compare to the pain to customers experienced from server sprawl and the inflexibility from physical servers back in 2003?”

(more…)

The Recipe for “Productization”: 3 Steps to Follow to help your Channel Sell More of Your Product (Part 1 of a Series)

Part of a Series: The Recipe for “Productization”

  • 3 “Productization” Steps to Help your Channel Sell More of Your Product
  • Step 1 – Define the “Solution Menu” Partners Can Sell to Drive Product Sales
  • Step 2 – Create a Solution Enablement Toolkit (SET) as the “Recipe” for Marketing, Sales and Delivery
  • Step 3 – Use a “Solution Cookbook” Portal to Communicate the “Solutions Menu” and the “Recipe” to Partners

Last week I talked about how getting “Productized” in your partners solutions was a good way to grow your channel revenue and defined the process that partners use to absorb your products into their solutions as Plan, Productize, Promote, Sell and Deliver (PP-PSD). That model is shown in Figure 1 below.  If you have not read that post, you might find it helpful to read as background on “why” and “what” on “Productization.”

Figure 1: How Partners Consume (Plan and Execute) a Solutions GTM Program (PP-PSD)

Productization model - phase1and2

In this week’s post, I’ll talk about specific steps you can take to assist your channel in “Productization.” (more…)