Channel Chief Rauch Credits Channel Partners For Spurring VMware's Q2 Growth

VMware Americas Channel Chief Frank Rauch credited the company's partners for the strong second-quarter growth VMware pre-announced Monday.

"We could not do it without you," Rauch said during The Channel Company's XChange 2017 conference in Orlando, Fla., Tuesday morning. "VMware is still massively dedicated to the channel. The majority of our business since our inception and today flows through the channel."

VMware is scheduled to officially release second-quarter results later this month before its annual VMworld conference in Las Vegas, but announced some preliminary results Monday because "we had really good news," Rauch said, including year-over-year revenue growth of about 12 percent to about $1.9 billion and license revenue that grew about 13 percent to $737 million.

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Rauch said VMware's virtualized storage customers total 8,000 today and bookings are up 150 percent year over year. Network virtualization bookings are up 50 percent year over year and the company has seen 20 percent year-over-year growth in mobile desktop and "mid-single-digit growth in cloud management bookings. Hybrid cloud Software as-a-Service is up 30 percent year over year, he said.

The Palo Alto, Calif., company also said its operating margin was about 31 percent for the quarter.

"That is tremendous, tremendous performance, but we don't take anything for granted," Rauch said. "The time to fix the roof is when the sun is shining," he said, quoting President John F. Kennedy. "The time to invest is when you're doing well in the market. That's the time to spend money in the channel, to increase programs, margins. We're investing in the channel."

Rauch said his team is hiring practice architects, reimbursing for proof-of-concept work and bringing every bit of enablement possible to partners. "We're combining our business intelligence with your business intelligence," he said. "We're starting to see rebuy rates at tremendous percentages within our customer base.

"Please take advantage of the momentum we have in the market," Rauch said. "Choose your investment areas and let us help you build a plan. Develop expertise through enablement. Execute with the help of VMware and the power of partnerships."

Allen Falcon, CEO of Cumulus Global, a cloud solution provider based in Westborough, Mass., said Rauch's comments are an indication that vendors are realizing the importance of channel partners to their relationships with customers.

"Vendors realize they can't be close enough to the customer to be effective," Falcon said. "At times in the last decade, vendors have questioned the value of the channel, but I really believe the value of the channel is on the rise and more vendors are realizing that, including VMware. They had a little bit of work to do to get to this point, and I think they've been doing it well. They've put resources behind the channel, and that's evident in the way they're working with the channel and how they've built that relationship."