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VMware tempts channel with margin message

Resellers told that licence sales can lead to generating nine times as much revenue from associated services and additional product sales

Resellers doubtful of the opportunities that exist in the virtualisation space have been told that licence sales can lead to them generating nine times as much revenue from associated services and additional product sales.

Reza Malekzadeh, senior director for products and marketing EMEA at VMware, one of the sector’s most influential vendors, insists virtualisation is not just about selling a software licence, but an architecture choice around computing power, storage, security, networking equipment and management software.

“What we have found is that for every US$1 of VMware licence sold there is typically about US$9 of other things that are sold,” he explained. “So we have a fairly significant drag on other types of technologies and equipment, which for the channel means margin.”

VMware recently unveiled the fourth generation of its xSphere platform, which represents the core of its cloud computing strategy.

The vendor boasts more than 100 partners in the Middle East and North Africa, and regional manager Ghassan Darri says now is the time for them to take advantage of burgeoning end-user interest.

“Until 18 months ago, the Middle East looked at virtualisation as a luxury tool, but ever since the second half of last year the adoption at partner level and customer level has almost quadrupled,” he claimed.

“It is mostly driven by partners that have been sitting on the line and waiting for virtualisation to become more visible to the end-customers. We have customers of all sizes. Large enterprises probably started the wave, but SMBs joined soon after and we now have more than 300 customers across the Middle East,” added Darri.

Vendors of storage and security equipment are adamant that customers are still spending on their technologies even during a downturn, but what about an emerging sector such as virtualisation?

“It has been impacted like everything else,” admitted Malekzadeh. “However, I think it is a little bit less impacted because we have an ROI that is less than a year. So now, as people look more carefully at where they want to spend their dollars, virtualisation becomes an interesting area to invest because it brings returns in less than one budget cycle.”

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