VMware Outsources Its Renewals Process, Promise To Clean Up Issues
VMware used its VMware Partner Exchange, held this week in Las Vegas, to publically discuss the issue and outline steps it is taking to improve the process.
VMware brought up the issue in spectacular fashion on Tuesday when Scott Bajtos, senior vice president of global support services for the company, walked on stage during the morning keynotes wearing a flack jacket.
As Bajtos walked on, the keynote presenter, Carl Eschenbach, executive vice president of worldwide field operations at VMware, said, "I'm going to do something you have all wanted to do."
Eschenbach then reached behind a podium, pulled out a toy gun, and started firing plastic projectiles at Bajtos, who fell to the ground in mock agony.
"Scott, are you going to fix the renewals?" Eschenbach asked.
"Yes," Bajtos replied.
Bajtos then introduced a new partner portal that VMware currently has in beta testing called "Renewal Central 2.0" focused specifically on improving the renewals process.
The portal, which was demonstrated on Tuesday and Wednesday, offers a single sign-on with the company's partner portal, as well as a custom-built CRM system that collects renewals data and makes it more easily accessible to partners.
The problem is related to the processes that VMware has employed in the past, as well as in its ability to capture the necessary information, Bajtos said.
"This should be a science, not an art," he said.
To fix the renewals process, VMware outsourced the development and running of the portal to ServiceSource, a San Francisco-based provider of technology to handle services renewals. The company currently manages about $4 billion in services revenue for clients.
"ServiceSource brings in a data forensics team," Bajtos said. "Our prior team didn't have the experience. Our company outgrew their previous capabilities."
ServiceSource employee Laurie Priddy, who now serves as the general manager for renewals at VMware, said the renewals portal uses a CRM process custom-built by ServiceSource that provides accurate renewals data and which engages VMware's partners as part of the data cleansing process to ferret out inconsistencies.
Once the portal has been thoroughly tested and is ready for production use, Priddy said there are things solution providers can do to make the renewals process run more smoothly than in the past.
First, Priddy said, solution providers should use the portal to get a 60-day to 90-day jump on the renewals process. Historically, every week in advance of the renewals due date that partners work with customers results in an extra 2 percent of margin for the partner. "Let's work together to get the renewals to the customer in time," she said.
Partners will be able to use the portal to access a number of tools to improve the renewals process, including tools that provide renewals quotes, product information, upsell opportunities, and new service level opportunities.
The portal will also provide solution providers with information on selling renewals, on how to handle customer objections, and on how to close the deal, Priddy said.
This is the first time that VMware has done more than show one slide related to the problems of maintenance renewals, said Keith Norbie, vice president of sales at Nexus Information Systems, a Minnetonka, Minn.-based solution provider and VMware partner.
"They really shared their advancements on what they're doing with the problem," Norbie said.
VMware has until now been its own worst enemy when it comes to things like handling maintenance renewals, Norbie said. "They've grown so fast, they had no template on how to handle such things," he said.
While VMware is making strides in improving the renewals process, there are still questions that need to be addressed, said Marty Chilton, director of services at High Performance Technologies, a Charlotte, N.C.-based solution provider and VMware partner.
Chilton is interested in seeing how VMware will handle renewals in the government sector where customers often require three bids for nearly everything. "A lot of the time, success comes down to customer relationships," he said.
Another issue that needs to be addressed is the case where customers may get virtual desktop, virtual server, and virtual implementations of tier-one applications like SAP from different suppliers, all of whom have their own renewals schedules.
"If they have three different vendors, customers may want to consolidate their renewals," Chilton said. "The question is, who gets that one contract."
However, Chilton said, VMware seems to be on the way to addressing the issue. "With VMware, there's some passion behind it," he said. "They're working on it."
Another solution provider, who preferred to remain anonymous, said his company manages to avoid many of this issues related to renewals be taking it upon itself to buffer the process from the customer.
"Our sales teams work with VMware sales teams on making it smooth for the customer," the solution provider said.