5V0-21.21 plan - VMware HCI Master Specialist Updated: 2024

“We are creating a partner-led, profit-driven, cloud-smart ecosystem. What that means is it’s really about working with our partners across what we’re finding needs to be a very interconnected ecosystem. This notion of customer control or account control really doesn’t exist as much anymore,” says VMware Channel Chief Sandy Hogan in an interview with CRN.

VMware’s global channel chief, Sandy Hogan, said the “magnitude of disruption” happening in today’s IT world is causing VMware to change the way it works with channel partners, paving the way for better partnerships in the new multi-cloud world.

“For 2022, I almost call our internal theme ‘change the game’ because that’s how significant it’s going to be this year for us,” said Hogan, VMware’s senior vice president of the worldwide partner and commercial organization, in an interview with CRN. “We are creating a partner-led, profit-driven, cloud-smart ecosystem. What that means is it’s really about working with our partners across what we’re finding needs to be a very interconnected ecosystem. This notion of customer control or account control really doesn’t exist as much anymore.”

There are three fundamental focus areas for VMware’s channel organization in its new fiscal year 2023 as the company seeks to become the multi-cloud software leader: redefining partner profitability, delivering customer outcomes and creating an unrivaled partner experience.

“Providing an unrivaled partner experience is at the forefront of everything for us. That’s the core piece to partner profitability: efficiency, automation and effectiveness. VMware has been really middle of the road there in the past, and we’ve had challenges and we’re bringing it up a notch and really taking it to an unrivaled experience,” she said.

[Related: 5 Ways VMware Is ‘Evolving’ Partner Profitability In 2022]

To free up partners to drive profitability, VMware is implementing and investing more in automation as well as some new visibility tools such as estimators and profitability models that help partners evaluate at the deal level.

Bob Keblusek, chief innovation and technology officer at fast-growing Sentinel Technologies, a Downers Grove, Ill.-based VMware partner, said he likes the path Hogan is creating for the channel to drive more profitability.

“Profitability with VMware has been an issue in the past, but we hope that we can find new paths to profit with some of the new programs and a continued focus on MSP and MSSP offerings. Sandy specifically called out a focus on profitability with the program direction, and recognizing there is a need to Improve it will hopefully drive change through the program with more partner focus,” said Keblusek. “We are more excited now than we have been in years about the direction and how it aligns with our own direction.”

Delivering Customer Success

Another major channel focus for VMware’s Hogan in fiscal year 2023 is delivering customer outcomes.

“That’s everything from how we co-create solutions, it’s the launching of the Customer Success Competency that is now built within the portfolio, and the partner-to-partner ecosystem that we’re really driving,” she said.

This falls in line with how many top VMware partners are creating Customer Success practices of their own.

Sentinel Technologies continues to invest in its Customer Success Management teams, driven by customer outcomes and experience. “We’re continuing to drive measurable customer success like with our Fortis by Sentinel Security Score where we run workshops, measure customers’ security maturity across the NIST Cyber Security model, and then remeasure repeatedly as we execute on a joint success plan,” said Keblusek.

‘Redefining’ Partner Profitability

The third piece to VMware’s channel strategy this year is “redefining” partners’ profitability journey.

“Because they’re creating more of these complex services, we’re actually seeing our best partners are two times to three times more profitable when they have invested in these types of new services offerings and, in particular, around customer success,” said Hogan. “We’re looking at creating new ways for our partners to develop MSP offerings and being able to publish those offerings in marketplaces so we now create that multiplier effect.”

Keblusek said he likes Hogan’s emphasis on partner-led in VMware’s channel strategy this year. “In reality, we enjoy working with our best partners and winning together but also working to ensure the customer is realizing the outcomes they expect from our vendors’ product and our services. Teaming is important for us, but when the vendor is leading the opportunity, it can be very hard to lead—especially if they aren’t sensitive to the partner profitability, it usually makes teaming very difficult,” he said. “So I like the direction VMware is taking.”

The channel changes in VMware’s new fiscal year 2023, which began this week, is based around how solution providers are creating new business models in a multi-cloud world. Hogan said over half of VMware’s channel partners are now executing on two or more types of business models.

“So the fundamental shift in direction for us will be around aligning to partner business models, meaning the more business models a partner has, they will have ease and flexibility in being able to build new practices, very quickly be able to see and apply that to their tiering status, and be able to get more enablement across all of those,” said Hogan. “So we’re moving from bucket-sizing partners in a certain type to really evolving them and enabling them to create more competencies. It’s all around accelerating their ability to build unique IP and services and differentiation that will drive more profitability for them.”

This will be VMware’s first full fiscal year as a stand-alone company following its spin-off from Dell Technologies in November.

“The future is bright,” said Hogan. “We are incredibly excited.”

"The speculation about EMC and VMware’s commitment to Cloud Foundry and Greenplum businesses [is] unfounded," VMware said Tuesday in a memo to global spokespeople, which was obtained by CRN "VMware and EMC are very committed to these efforts and are continuing to aggressively invest in their success and long-term contribution to the portfolio."

What could EMC and VMware gain from such a spin-off? With a whittled-down purview of big data and cloud infrastructure -- along with Project Rubicon, EMC and VMware's infrastructure-as-a-service joint venture -- a spun-off company would be more nimble than VMware when it comes to competing with established cloud giants, according to industry watchers.

"The theory is that a standalone cloud, plus big-data-focused business, would be better equipped to battle Amazon, Microsoft and Google," Jason Maynard, senior analyst with Wells Fargo Securities, said Monday in a note to clients. "This new business wouldn't be under the same operating margin constraints if it was private and separate from the VMware P&L."

[Related: VMware Calls Cloud Foundry, Greenplum Spin-Off Rumor 'Unfounded' ]

One VMware partner, who requested anonymity, suspects VMware and EMC are putting the spin-off plan on hold until the dust settles from this week's unexpected management changes. Effective Sept. 1, Pat Gelsinger will be taking over for Paul Maritz as VMware CEO, with Maritz moving to EMC to take the newly created role of chief strategist.

In any event, the source told CRN he isn't sure what to make of the Cloud Foundry and Greenplum spin-off plans, which were first reported by GigaOm on Monday.

"I don’t know if it’s a good or bad thing. I thought spinning them off would be good in order to create some autonomy, but depending on how they structure moving forward they could be better off keeping it internal," said the source. "I would bet [the spin-off] resurfaces in three to six months."

There is also speculation that EMC, which acquired VMware in 2003 and owns around 80 percent of its shares, may acquire the rest of VMware and then spin out its cloud and big data assets into a separate company. VMware currently sports a market capitalization of $39.6 billion, compared to EMC's 53.5 billion.

The thinking here, according to Maynard of Wells Fargo Securities, is that a privately held spin-off would have more sales and development flexibility by not being beholden to Wall Street.

"Just as VMware needed autonomy from EMC to operate in its early days, we believe the same argument is that the VMware cloud business needs to be free from the limitations of a hypervisor," Maynard said in the note to clients.

VMware may provide more details on the spin-off in its second quarter earnings call next Monday, or at its VMworld conference, which is being held in San Francisco from Aug. 27-31, according to the GigaOm report.

Broadcom, under the leadership of CEO Hock E. Tan, recently closed its $69B acquisition of VMware. Post-acquisition, Broadcom is moving quickly in undertaking several critical initiatives with VMware that, while likely beneficial to Broadcom shareholders over the long term, are causing uncertainty among many VMware customers.

Transition to Subscription Model

One of Broadcom’s primary strategies to drive revenue growth is shifting VMware's business model from a perpetual license to a subscription-based one. This change aims to provide more predictable and stable revenue streams and aligns with the broader industry trend towards subscription services.

The move, as described by Tom Krause, president of the Broadcom Software Group, during the company’s most latest earnings call, is central to Broadcom’s plan to boost VMware’s contribution to its pro forma EBITDA to approximately $8.5 billion within three years, a considerable increase from VMware’s current production of about $4.7 billion. The emphasis on subscriptions is a key component of this ambitious growth target.

Broadcom's move to subscription models could lead to slower short-term growth for VMware and necessitate restructuring contracts from perpetual to subscription. VMware's strategy includes a trajectory of accelerated growth. The move to higher-value software stacks and subscription sales is expected to drive revenue growth over the next three years.

This transition could also affect VMware's customer relationships, as customers may push back against the shift to subscriptions, which are generally perceived as more expensive than perpetual licenses. VMware's expansion beyond infrastructure management with products like Tanzu could face hurdles if customers pause or reconsider their investments amid these changes.

Selling off Desktop & Carbon Black

During its earnings call, the company revealed plans to divest VMware's end-user computing portfolio and its Carbon Black security software unit. This strategic move aligns with Broadcom's stated intent to concentrate VMware's resources and efforts on creating global private and hybrid cloud environments tailored for large enterprises.

The end-user computing portfolio, encompassing desktop virtualization, application publishing, and mobile device management, alongside Carbon Black, a security software unit, are identified as non-core assets and are set to be separated from VMware's main business.

Broadcom expressed a commitment to finding suitable buyers for these units, ensuring they find "good homes," considering that many of their customers overlap with those of VMware's core products. This decision reflects Broadcom's broader strategy to refine VMware's product offerings and focus on areas that align with its vision of developing high-value cloud infrastructure solutions for global enterprises.

The company said that the moves are essential to redirect VMware's efforts towards its primary business of creating private and hybrid cloud environments, which is crucial for large enterprise customers worldwide.

Layoffs

Just days after it closed its acquisition, news emerged that Broadcom is set to lay off at least 2,837 VMware employees. This includes a substantial number at its Palo Alto campus in California, accounting for 1,267 employees, and 577 at its Austin facility.

It's important to note that the real number of layoffs could exceed these figures since not all layoffs must be reported through WARN notices. The total workforce of VMware globally is around 38,300 employees.

The layoffs are officially attributed to "economic" reasons, although Broadcom has not provided further specifics or justifications. Despite these layoffs, VMware remains a central piece in Broadcom's strategy for its enterprise software segment.

Analyst’s Take

You can look at a company from the perspective of the customer or the stockholder. I’m not a financial analyst, so I’m going to interpret Broadcom’s actions with a view of how those actions might impact an IT organization; after all, the IT practitioner is most directly impacted.

Broadcom's acquisition of VMware represents a strategic pivot that underscores the semiconductor giant's intensified focus on enterprise software. Transitioning VMware towards subscription models is a savvy move that aligns with broader market trends. But this shift may test customer loyalty, as subscription models often imply higher costs over time than perpetual licenses.

The decision to divest VMware's end-user computing and Carbon Black units clearly indicates that Broadcom seeks to sharpen VMware's focus on its core competencies in cloud environments. Such divestitures could streamline operations while also raising questions about future innovation and support for VMware's broader product suite.

Layoffs following the acquisition, while delivering operational cost savings, may have a broader impact on VMware’s innovation trajectory and customer service capabilities. This reduction in force, ostensibly for economic reasons, could introduce risks related to execution and market perception.

Predicting how Broadcom's moves will impact VMware products and services over the long term is impossible. The swiftness with which Broadcom instituted layoffs and product divestitures raises questions about how it will guide VMware forward.

As in any period of uncertainty involving technologies fundamental to critical IT infrastructure, IT organizations are well-advised to comprehensively analyze the risks involved before committing to any significant VMware deployment or renewing long-term license agreements. IT buyers should look to mitigate risks with a dual-vendor approach where feasible.

Many VMware customers are already adopting alternative solutions. Nutanix, VMware’s closest competitor, revealed record growth in its most latest earnings. While much of Nutanix’s growth was driven by its own strategic initiatives, CEO Rajiv Ramaswami acknowledged that the company did “close some additional deals” explicitly because of uncertainty about how the acquisition will unfold.

With the industry watching, Broadcom's stewardship of VMware in the coming fiscal year will be a critical test of its strategic vision for enterprise software dominance. While Broadcom is clearly focused on getting the financial aspects of the acquisition quickly under control, how the company will deliver long-term value to its VMware customers will become clearer.

Until there's clarity, however, IT organizations should continue to act with caution. Mitigating risk, after all, is the number one job for enterprise IT.

Disclosure: Steve McDowell is an industry analyst, and NAND Research an industry analyst firm, that engages in, or has engaged in, research, analysis, and advisory services with many technology companies, which may include those mentioned in this article. Mr. McDowell does not hold any equity positions with any company mentioned in this article.

Broadcom has moved forward with plans to transition VMware, a virtualization and cloud computing company, into a subscription-based business. As of December 11, it no longer sells perpetual licenses with VMware products. VMware, whose $61 billion acquisition by Broadcom closed in November, also announced on Monday that it will no longer sell support and subscription (SnS) for VMware products with perpetual licenses. Moving forward, VMware will only offer term licenses or subscriptions, according to its VMware blog post.

VMware customers with perpetual licenses and active support contracts can continue using them. VMware "will continue to provide support as defined in contractual commitments," Krish Prasad, senior vice president and general manager for VMware's Cloud Foundation Division, wrote. But when customers' SnS terms end, they won't have any support.

Broadcom hopes this will force customers into subscriptions, and it's offering "upgrade pricing incentives" that weren't detailed in the blog for customers who switch from perpetual licensing to a subscription.

These are the products affected, per Prasad's blog:

• VMware Aria Automation
• VMware Aria Suite
• VMware Aria Operations
• VMware Aria Operations for Logs
• VMware Aria Operations for Networks
• VMware Aria Universal
• VMware Cloud Foundation
• VMware HCX
• VMware NSX
• VMware Site Recovery Manager
• VMware vCloud Suite
• VMware vSAN
• VMware vSphere

Subscription-based future

Broadcom is looking to grow VMware's EBITDA (earnings before interest, taxes, depreciation, and amortization) from about $4.7 billion to about $8.5 billion in three years, largely through shifting the company's business model to subscriptions, Tom Krause, president of the Broadcom Software Group, said during a December 7 earnings call, per Forbes.

"This shift is the natural next step in our multi-year strategy to make it easier for customers to consume both our existing offerings and new innovations. VMware believes that a subscription model supports our customers with the innovation and flexibility they need as they undertake their digital transformations," VMware's blog said.

With changes effective immediately upon announcement, the news might sound abrupt. However, in May, soon after announcing its plans to acquire VMware, Broadcom CEO Hock Tan signaled a “rapid transition” to subscriptions.

At the time, Tan pointed to the importance of maintaining current VMware customers' happiness, as well as leveraging the VMware sales team already in place. However, after less than a month of the deal's close, reports point to concern among VMWare customers and partners.

Customer and partner concerns

VMware's blog said "the industry has already embraced subscription as the standard for cloud consumption." For years, software and even hardware vendors and investors have been pushing IT solution provider partners and customers toward recurring revenue models. However, VMware built much of its business on the perpetual license model. As noted by The Stack, VMware in February noted that perpetual licensing was the company's "most renowned model."

VMware's blog this week listed "continuous innovation" and "faster time to value" as customer benefits for subscription models but didn't detail how it came to those conclusions.

"Predictable investments" is also listed, but it's hard to imagine a more predictable expense than paying for something once and having supported access to it indefinitely (assuming you continue paying any support costs). Now, VMware and its partners will be left convincing customers that their finances can afford a new monthly expense for something they thought was paid for. For Broadcom, though, it's easier to see the benefits of turning VMware into more of a reliable and recurring revenue stream.

Additionally, Broadcom's layoffs of at least 2,837 VMware employees have brought uncertainty to the VMware brand. A CRN report in late November pointed to VMware partners hearing customer concern about potential price raises and a lack of support. C.R. Howdyshell, CEO of Advizex, which reportedly made $30 million in VMware-tied revenue in 2022, told the publication that partners and customers were experiencing "significant concern and chaos” around VMware sales. Another channel partner noted to CRN the layoff of a close VMware sales contact.

But Broadcom has made it clear that it wants to "complete the transition of all VMware by Broadcom solutions to subscription licenses," per Prasad's blog.

The company hopes to convince skeptical channel partners that they'll see the way, too. VMware, like many tech companies urging subscription models, pointed to "many partners" having success with subscription models already and "opportunity for partners to engage more strategically with customers and deliver higher-value services that drive customer success."

However, because there's no immediate customer benefit to the end of perpetual licenses, those impacted by VMware's change in business strategy have to assess how much they're willing to pay to access VMware products moving forward.

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Ravi Goyal is the President and CEO of Sureline Systems.

Organizations of all sizes, from small and medium-sized businesses (SMBs) to enterprise-level corporations, are continuing to move their workloads and data to the public cloud. This trend has been accelerating at an impressive pace over the last few years.

According to the Flexera 2020 State of the Cloud Report, "nearly half of enterprise workloads and data are in a public cloud." SMBs are taking to the public cloud at an even more significant pace, with the report stating that "70% of SMB workloads and data will reside in a public cloud within the next 12 months." It is not entirely surprising to see these numbers with latest world events hastening the implementation of new and unexpected work-from-home policies for companies all over the globe.

Public clouds are providing free tools to migrate existing servers with associated applications to their cloud, thus making cloud adoption during these unprecedented times easy and economical. Several organizations are also building new applications or reimplementing existing applications using more agile cloud-native technologies, which use automation to manage complexity and unlock velocity. Finally, many companies are switching to SaaS applications that are multitenant rather than moving existing applications entirely into the cloud. The benefit of multitenant SaaS applications is that the shared infrastructure can lead to lower costs as multiple companies share the financial load, including data center framework, OS and application management costs.

Regardless of which cloud adoption strategy a business decides to use, all organizations making their move to the cloud need to accept responsibility for protecting their data.

Disaster Recovery History And Assumptions

Traditionally, organizations had a combination of regular backups for recovery from lost data and disaster recovery (DR) for the loss of a system or a site. This method of data protection used local disk for short-term recovery and tape or, more recently, clouds for the long-term recovery of lost data paired with replication to a secondary location or cloud for DR.

After moving to a public cloud, many businesses have assumed that the cloud provider or SaaS solution provider is taking responsibility for backup and DR. This assumption is dangerous and wrong. Here's why:

• There are many stories of organizations not having access to their applications and data due to a cloud outage. One of the most notable outages was the Amazon Web Service outage of 2011. According to Amazon, the issues affected its Elastic Compute Cloud customers and "involved a subset of the Amazon Elastic Block Store volumes in a single Availability Zone within the U.S. East Region that became unable to service read and write operations. This caused instances trying to use these affected volumes to also get 'stuck' when they attempted to read or write them." Essentially, Amazon's Northern Virginia data center experienced a malfunction and went haywire. The glitch took down over 70 popular sites such as Reddit, Foursquare and The New York Times, and it cost hundreds of millions of dollars in lost revenue — as well as an unquantifiable loss of trust. Had those businesses implemented a robust backup and DR plan, they likely would have faced a minor inconvenience instead of a massive disruption. 

• Deleted data could be gone forever. If data is mistakenly deleted, most public cloud providers don't automatically back up data as part of their solution. Hence, you've lost it for good unless your organization is running snapshots or a backup program. The same is true when relying on a SaaS application.

• Inconsistent data replication is risky. Even when the cloud provider is replicating data to a separate region, there is often no consistency in that data and no protocol for bringing the systems online after an outage. Clarification on data replication and post-outage protocols is arguably the most critical aspect of a complete DR plan.

Talk To A Data Backup And Disaster Recovery Pro

It isn't necessary to become an expert on the public cloud to keep your business safe in the event of a data center disaster. It is important to be aware of what your provider and third parties offer for data backup and DR. Without a firm plan in place, your business could be facing significant financial impacts and a massive loss of brand trust in the event of an outage.

When researching potential cloud specialists to assist in drafting a plan for backups and recovery, consider the following: 

1. Ensure that the specialist has experience with an organization of similar size and complexity to your IT environment.

2. Look for a specialist who understands the different priorities of your applications (some critical, some important, others less) and puts a plan together that takes this into account.

3. Avoid a specialist who tells you backup/recovery is easy and you just need the right product.

4. A backup specialist needs a good understanding of clouds, LANs, WANs, applications and servers. They all come together in the backup plan.

If you don't have a data backup and DR plan in place for your business, now is the time to talk to your trusted cloud expert to have one drafted.

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