Category Archives for "Managed Services News"

Aug 31

AWS Makes Its First Channel Program Changes Since 2018

By | Managed Services News

The public cloud provider is adding two new incentives — and one is a type it has not offered before.

Amazon Web Services is unveiling its first channel program changes since 2018.

On Oct. 1, AWS Partner Network members may take advantage of two new incentives — one a rebate, one a discount.

AWS' Teresa Uthurralt

AWS’ Teresa Uthurralt

The Partner Growth Rebate – the first rebate AWS has ever offered – rewards partners for getting existing customers to adopt more AWS services and infrastructure. Partners may earn rebates each quarter; rebates come in the form of AWS promotional credits. AWS will award them when an existing account meets or exceeds year-over-year growth targets. The goal, Teresa Uthurralt, director of AWS partner programs, told Channel Futures, is “to help existing customers accelerate their cloud journeys.”

AWS does not make percentage or pricing details public. But, Uthurralt said, the vendor formulated the new approach because “partners had shared that rebates were an important mechanism to invest in their businesses.”

AWS' Doug Yeum

AWS’ Doug Yeum

The second new initiative is called the Partner Originated Discount. This targets new customers. What’s significant is that Amazon Web Services is including early-stage customers (the definition of which it does not reveal outside of APN) in that scope. These end users are just starting to use AWS and partners “can help these customers move faster,” Doug Yeum, head of worldwide channels and alliances at AWS, told Channel Futures. And when they do, they will reap more discounts. Partners submit, validate and launch Partner Originated Discounts through the APN Customer Engagements program.

Overall, Yeum said, customers have told AWS they want to adopt more cloud computing through partners. At the same time, partners have expressed their desires for more incentives. These channel program changes meet both needs.

“If we have our partners who are engaged, we think our customers can basically get more value,” Yeum said.

‘It Was a Good Time’

Amazon Web Services partners know the company doesn’t initiate channel program changes often. In fact, the last time came in 2018, when the cloud provider switched from the AWS Channel Reseller Program to the current AWS Solution Provider Program. Prior to that, the most noteworthy adjustments occurred six years earlier. AWS aims to deliver stability and predictability to its partners, Yeum said. Therefore, leaders are “very careful” about rolling out frequent alterations.

“It’s been over three years since we announced the last round of changes and we felt it was a good time for us to think about what additional things we can do to help our partners,” Yeum said.

The channel program changes have been in the works for a while. They “bubbled over the last 12-18 months,” Yeum said.

The rebate and discount are applicable to APN members including VARs, system integrators, managed service providers, distributors and public sector experts.

“We’re making changes to ensure that our partners are getting additional value and additional support,” Yeum said. “We want to help them continue to transform their capabilities and help their customers accelerate their journey on the cloud.”

Stephen Boyle, senior vice president of strategic partnerships at SHI International, agreed. The $11 billion IT services provider is continuing to move away from …

Aug 31

Hitachi Vantara: Partners Can Unlock Business Insights from Customer Data

By | Managed Services News

Hitachi Vantara eyes “massive growth” with the launch of the Lumada DataOps Suite.

Channel partners can help customers transform data into valuable business insights, according to Hitachi Vantara’s EMEA channel exec.

“Transforming all data into business insights is becoming a business imperative.” So believes Dennis Frank, VP, EMEA strategic partners and alliances at Hitachi Vantara.

451 Research indicates that nearly all organizations are planning (28%) or actively pursuing (72%) initiatives to deliver agile and automated data management.

But Frank says as enterprises look for business insights from their data, they face numerous challenges. These include data sprawl, diverse data formats and the explosion of data volumes. Data can span across multiple data centers and clouds and processed by disparate tools.

IDC says that as data volumes explode, the amount of data that must be understood or remain in the dark expands. Only 2.5% of all data is analysed, with the remainder 97.5% lost.

Hitachi Vantara's Dennis Frank

Hitachi Vantara’s Dennis Frank

“This has meant that the control over data creation and management for organisations has loosened, creating a huge challenge. How can we manage and access all this data flooding in? Especially data that cannot be seen, used or managed, or a combination of the three,” Frank said. “Today’s challenge of data management is like building dozens of warehouses and data lakes, each of which must comply with regulations but also allow diverse teams to create, maintain and evolve them.”

Lumada DataOps Suite

Frank’s comments come as Hitachi launches its Lumada DataOps Suite. He says it can turn customers’ dark data into business insights by operationalising data management with automation and collaboration. It reportedly removes bottlenecks and minimises the end-to-end cycle time of data analytics. It also democratizes access, lowers the cost of data operations, and accelerates customers’ data-driven business innovation.

“All these capabilities lead to better business outcomes,” said Frank.

He says this creates an opportunity for growth within Hitachi Vantara’s partner ecosystem.

“Partners can enhance new public cloud migration opportunities, as well as expand on current Pentaho businesses. Furthermore, partners can create additional opportunities for service dollars beyond product installations.”

This he says, is due to “the given expertise in ETL development, data lake migration and data governance.”

“This opportunity can help partners gain traction rapidly within the growing market – $3.4 billion with projected 10.5% CAGR,” added Frank.

‘Massive’ Growth Plans

In EMEA, Hitachi Vantara has more than 400 active partners and 50 focused partners. Approximately 72% of its product sales goes through partners.

The vendor said it wants “to massively grow our market share over the next three years.” To achieve this, it said it is committed to increasing its “market coverage, partner preference and win rate.”

Frank said Hitachi Vantara continues to invest in its partner program, Partner Connect portal and partner tech enablement initiatives. The firm is also driving pricing promotions, especially around its midrange and HCI solutions, and infrastructure-as-a-service offering.


Aug 30

Ingram Micro Highlights MSP Pain Points, Stresses Deeper Customer Conversations

By | Managed Services News

MSPs have gone through countless pivot points in the last year. Here’s what’s working, and what isn’t.

Security, hiring and marketing, oh my. These are a few of the pain points keeping MSPs up at night as of late. It’s a lot to handle at once, but much comes down to having the right conversations with your customers, according to Ingram Micro.

We sat down with Eric Kohl, vice president, cybersecurity and data center, Ingram Micro, and Craig Weir, director of global cybersecurity, Ingram Micro Cloud, to get a sense of what they’re seeing in the industry. Who is doing it right, and how?

The Security Landscape

Ingram Micro Cloud's Craig Weir

Ingram Micro Cloud’s Craig Weir

Craig Weir: If we put our MSP hat on with what the market data is telling us, we certainly see a progression here. Last year was all about “you had better scale up on cybersecurity” because the pandemic was unexpected and we all had to think differently. The shift this year highlights behavioral and consumer changes — how MSPs and customers want to buy, what they want to buy. They are realizing that they don’t want to spend much time on it [cybersecurity], but want to make sure they’re protected.

In terms of that, I think a lot of MSPs did a good job on shifting, but some of them did not. You’re seeing a shift where some MSPs are winning hand over fist, but the growth year to date for some of them is really poor. It goes back to the pain points partners have had, and why are those different this year? Are the partners who are winning doing something differently to continue to shift and pivot as needed?

Pain Points — Work-Life Balance

Ingram Micro's Eric Kohl

Ingram Micro’s Eric Kohl

Eric Kohl: Craig and I are actively working to strengthen our external messaging around the MSP and a value proposition. What are all the things that we can do to help that channel fuel growth? We’re heads-down, and we’ve got programs and content and things all over the place. But for us, at the highest-level growth strategy perspective, we’re talking about how we want the MSPs to lean into Ingram Micro more than ever. We see our role as helping the MSP channel to do all these things to fuel growth, and at the same time, to help take away some of their pain points.

One of the consistent threads in terms of MSP pain points is work-life balance. That’s likely because they’re accessing so many tools and systems from a multitude of vendors and portals. Ingram Micro works with our vendors to sit at the intersection between us and the MSP. We are also spending a ton of time internally to kind of smooth out operations to drive automation. We’re in the midst of our own digital transformation so that we can serve this channel better. 

Another pain point is sales and marketing. One thing I’ve noticed is that a lot of our partners are jumping in with our Emerging Business Group (EBG), as well as some of the new solutions from [Ingram Micro] Cloud Marketplace. There’s much more of an appetite to look at some of the innovative solutions from some of these new and emerging vendors that maybe don’t …

Aug 30

Check Point Channel Chief: Avanan Acquisition Gives Partners New Opportunities

By | Managed Services News

Check Point’s channel chief said the acquisition gives partners new revenue and managed service opportunities.

Check Point Software Technologies is bolstering its cloud email security capabilities with the acquisition of Avanan.

The companies have signed a definitive agreement that will ultimately integrate Avanan’s features into Check Point’s Infinity consolidated security architecture.

The deal expands an existing relationship between the companies. Check Point had already been using Avanan’s products as an OEM for the last three years. Now it made sense for Check Point to officially bring Avanan into the fold, given the proliferation of email-based cyberthreats. According to APWG, phishing attacks doubled in 2020.

Dor, Dorit_Check Point

Check Point’s Dorit Dor

“More and more businesses are moving to cloud-email platforms, and with email becoming a major channel to launch devastating cyberattacks, this acquisition represents a huge potential as organizations are looking for a new approach to email and collaboration suite security,” said Dr. Dorit Dor, Check Point’s chief product officer. “By integrating Avanan into Check Point Infinity, organizations will be able to modernize legacy solutions with email security as a service and protect cloud email and collaboration suites from the most sophisticated attacks.”

Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.

Six-year-old Avanan developed an API that uses artificial intelligence to keep malicious emails from reaching the inbox. Now it can harness Check Point’s scale to reach “all sizes and geographies,” CEO and co-founder Gil Friedrich said.

Friedrich, Gil_Avanan

Avanan’s Gil Friedrich

“Avanan’s journey to reinvent email security is starting a whole new chapter. By merging with Check Point Software, we are combining Avanan’s … AI that catches the sophisticated email-borne attacks everyone else misses, with Check Point Software’s unparalleled security capabilities and threat intelligence,” Friedrich said.

They did not disclose the financial terms of the transaction.

Check Point maintains its headquarters in Tel Aviv, Israel, while Avanan operates an R&D center in Tel Aviv.

Channel Impact

The deal also brings together two companies that have increased their investments into the indirect sales channel in recent months.

Check Point bills itself as a 100% channel-driven company. Last year it announced a cloud distribution marketplace partnership with Ingram Micro and Arrow, and it recently has been working to enhance its deal registration system. Avanan in June announced its first channel program, which caters to VARs, MSPs and MSSPs.

Frank Rauch, Check Point’s head of worldwide channel sales, said partners have responded positively to the acquisition news.

“Partners continue to embrace our Harmony solutions and messaging,” Rauch told Channel Futures. “The Avanan acquisition expands the revenue, profitability and managed services opportunities for the Check Point partner community.”


Aug 30

The Rise of Edge Data Centers

By | Managed Services News

Here’s a look at how edge data centers work and why we need them now.

As the amount of data produced continues to grow, data centers need faster and smarter ways to process all that information. Data centers are embracing the idea of edge computing as a solution because it’s more efficient to process data closer to the source than sending it to and from the cloud. Edge computing works by placing network and compute resources physically nearer to the areas they serve to cut down on latency. These regional data centers have become known as edge data centers. Let’s take a closer look at how edge data centers work and why we need them.

What are edge data centers?
Let’s get a little more specific about what an edge data center is. First, they’re smaller facilities than the sprawling, mega data centers that are becoming so common. They’re built geographically close to the communities they serve (to reduce latency), and edge data centers usually interface with a larger data center or many different data centers. By creating this sort of regional data center model, critical data can be transferred and processed much faster, which improves the end user experience.

Why are edge data centers necessary?
One of the words you’ll always hear when edge computing is mentioned is latency. Latency is simply the time it takes data to travel from one point to another. And while latency isn’t a new issue confronting data centers, it’s more of a concern thanks to more data being pushed over network infrastructures than ever before. The proliferation of IoT devices, big data, cloud services and non-stop video streaming means that latency is simply unacceptable for end users. Edge data centers have proven to be an effective, efficient way for service providers to reliably deliver services and meet customer demands.

The cost to move data to and from the cloud can add up quick, as can the cost to store that data in the cloud. The local nature of edge data centers can dramatically reduce these costs, potentially saving companies huge amounts off their bottom line. Compliance is another reason edge data centers are gaining in popularity. By storing and processing data locally with edge computing, that data is potentially more secure and thus compliant with initiatives like GDPR, or even self-compliance for companies with higher data transit standards.

Edge computing use cases
While it’s easy to talk generally about how micro data centers and edge computing are being used, here are a few specific real-world use cases:

  • Telehealth: Instant access to patient data is now possible thanks to edge computing and personal health devices/fitness bands.
  • Augmented reality: Retailers are beginning to offer augmented reality shopping experiences, powered by real-time data processing.
  • Driverless cars: Faster data collection, processing and sharing is on the cutting edge of creating a safer, autonomous driving experience.
  • Gaming: Online multiplayer games are simply not possible without a way to mitigate latency and offer higher bandwidth.
  • Data delivery: Storing critical content at the network edge means it gets to end users faster than ever before.

For more information, view our podcast here.

 This guest blog is part of a Channel Futures sponsorship.


Aug 30

OTG, Pax8, Synnex, TBI Add New Suppliers

By | Managed Services News

TBI teamed up with an emerging tech consulting firm, and OTG teamed up with a UCaaS/CCaaS provider.

Multiple companies have signed distribution partnerships with emerging technology vendors in the last week.

Service distributors (which we formerly referred to as master agents) and traditional distis continue to deepen their vendor portfolios. As you might expect, many of these vendors brand themselves as cloud-focused technology providers who can better enable hybrid workforces.

For example, TBI on Monday announced a partnership with Stracos, which helps customers build solutions around IoT, AI, machine learning and virtual reality. Stracos carries a strong reputation in the space but also covers industries like manufacturing and data science.

“With access to their unique product development platform, partners will be able to provide their customers with the means to collaboratively accelerate new physical and digital (cloud and IoT) concepts to market, while also building the foundation to sustain these changes over time,” said Mike Onystok, TBI’s senior vice president of operations.

In addition, TBI this month announced distribution partnerships with Sungard Availability Solutions and MetroNet.

TBI's Michelle Tamras

TBI’s Michelle Tamras

TBI also recently hired Michelle Tamras, a long-time channel manager at AT&T. She now works as TBI’s director of partner success, functioning as a liaison between TBI and partners and helping to drive implementations.

Crexendo and OTG

In other news, UCaaS and CCaaS provider Crexendo announced a partnership with OTG Consulting. OTG and its agents can sell Crexendo’s VIP business communications platform.

Jon Brinton, Crexendo’s chief revenue officer, said the partner community is increasingly adopting the vendor’s offering. He said OTG has established itself as an expert in deep client engagement.

“We are honored to add them to our growing roster of partners and to be delivering our VIP platform to businesses through their network of technology consultants,” Brinton said.

OTG Consulting CEO Jeffrey Pearl said the partnership helps OTG respond to what’s occurring in the market.

“The demand for unified communications as a service has grown at an incredible pace as companies have shifted to flexible and hybrid work environments, and offering Crexendo’s VIP Platform will enable us to address both the increased demand and customer satisfaction requirements presented by this new normal.”

Last week 8×8 announced a distribution partnership with Synnex. In addition, Pax8 teamed with Apple device management solutions provider Addigy.

Aug 30

Top 6 Findings From the Second Quarter Channel Futures MSP Study

By | Managed Services News

Recurring revenue, biggest challenges and future forecasting all yielded interesting results among our respondents.

We recently reported on our second quarterly survey, this one focused on Q2 2021. Taking a look back at the first quarter, there were several interesting shifts we wanted to dig into a little more.

The biggest themes were:

  • Quarterly realized business activity
  • How Q2 2021 recurring revenue compared with Q2 2020
  • Biggest challenges in the quarter

Recurring Revenue

In terms of recurring revenue, we noticed that the “Increased over 20%” and “Increased 11% to 20%” categories jumped a bit in the second quarter when compared to the year-ago quarter. According to Jay McBain, principal analyst of channels, partnerships and ecosystems at Forrester Research, this is pandemic-related.

“The first quarter had less impact last year than the second quarter on revenues,” said McBain. “The growth numbers are indicative of smaller baselines (versus market growth).”

Realized Business Activity

For this category, our data showed that recurring revenue increased pretty sharply for many MSPs. Security sales rose moderately, while cloud sales saw a slight decline.

Regarding questions that were more long-term in scope (annual forecasting 2021 compared to 2020) and overall economic outlook (confidence in the U.S. economy and confidence in the industry), we didn’t see much change from the Q1 survey to Q2. This makes sense when it comes to revenue forecasting since we are discussing a full year. But we wanted to get a better sense of economic outlook confidence and industry confidence. According to McBain, this speaks to the benefits that changing work partners are having on MSP businesses.

“Companies are now looking at a permanent shift in how they work — reassessing workflows, processes, business logic, and even real-estate investments,” McBain wrote in his “What I See Coming For the Channel: 2021″ predictions back in January. “The output of this will be a remote (or residential) topology that will require new levels of service, support, infrastructure, security, compliance and continuity. I expect the percentage of firms that outsource some or all of their IT will start to increase again by double digits — for the first time in five years.”

Biggest Challenges

The “biggest challenges” category yielded some head-scratching data from our respondents. According to McBain, the delta variant of the coronavirus might have impacted some partners in the second quarter.

“Companies that may have [seen] the end of the pandemic tunnel in Q1 may be recircling the wagons on a digital or digital-first marketing strategy to acquire more customers (which is No. 1 in both periods),” said McBain. “Also interesting is that hiring-tied customer acquisition in Q2 showing the impact on the labor force that has been well publicized in retail, restaurants, etc.”

In the slideshow above, we further break down our important benchmark survey findings. What will we discover as we head into Q3 and beyond?

Aug 30

The Top 24 Channel Partners in the Inc. 5000

By | Managed Services News

MSPs, CSPs, VARs, agents, and everything in between.

The latest Inc. 5000 abounds with channel partners.

America’s biggest leaderboard of fast-growing private companies contains too many IT and telecom companies to count. And so many of those companies are providing third-party technological consulting, brokering, design and management for business customers. It’s a testament to how digitization and COVID-19 have made partners more relevant than ever.

We went through the Inc. 5000 and picked out companies in the top 1,000 that fit the general mold of a technology channel partner. That is to say, they interface with both end customers and vendors, serving as a go-between. And that definition reaped a wide variety of candidates. We chose only companies that registered in IT management, IT services or telecommunications to make the selection process slightly less impossible.

We found all types of partners on this list. MSPs and cloud service providers maintained a particularly high population list, but an ISP services broker actually ranked higher than any other partner.

A Varied List

Several notable companies either landed outside the top 1,000, registered themselves in a different categories or don’t explicitly identify themselves as a partner. For example, Google Cloud services partner SADA scored 534th but registered in the business products and services category. NorthEnd Teleservices in 754th has made a name for itself by providing customized contact center solutions. The definition of a channel partner is rapidly expanding to include more and more types of companies. Forrester’s Jay McBain was right about nontraditional partners taking over the channel.

If you scroll through the winners, you’ll notice that partners who served government customers are coming out of the pandemic in very good shape. It’s also interesting to see Google Cloud-focused shops grow at a fast rate after putting all of their eggs in one cloud basket.

Scroll through the slides above to see the top channel partners in the Inc. 5000. Did we miss someone you think should be there? Let us know in the comments.

Aug 30

Lessons Learned from a REvil Ransomware Attack

By | Managed Services News

How channel partners can better defend against ransomware.

In a June 2021 incident, the Sophos Rapid Response team responded to a security alert that flagged Cobalt Strike on the network of a midsize media company. Cobalt Strike is a remote access agent that is widely used by adversaries as a precursor to ransomware attack. The attackers proceeded to release ransomware a few hours later, at 4 a.m. local time, targeting proximately 600 computing devices–25 of them servers–and three Active Directory domains that were critical to the company’s ability to maintain its 24/7 operations.

The ransom note demanded a payment of $2.5 million, and it was signed by REvil. Also known as Sodinokibi, REvil is a ransomware-as-a-service (RaaS) offering, which means that criminal customers can lease the malware from the developers and then use their own tools and resources to target and perform the attack. Although REvil was also used in the recent Kaseya attack, the approach and impact of an attack involving REvil ransomware is highly variable, making it difficult for defenders to know what to expect and look out for.

Following the initial ransomware attack, the target’s IT team and Sophos’ Rapid Response team were locked in live combat with the human adversaries orchestrating the attack. The attackers tried repeatedly to breach protected devices and encrypt files, launching attacks from different unprotected devices they had been able to compromise. Every attempt needed to be blocked and investigated to ensure there was nothing else going on and that there was no further damage–even though by then the next attack attempt was already underway. This task was made harder than normal because the organization needed to keep most of its servers online to support the 24/7 broadcasting systems.

Eventually, the onslaught began to slow down. By day two, inbound attacks were still detected intermittently, but it was clear the main attack attempt was over and had failed. Unfortunately, even though the attack ultimately failed, the attackers had already encrypted the data on unprotected devices, deleted online backups, and decimated one online and undefended domain.

Lessons Learned from This REvil Attack

Sophos experts believe there are two important lessons that partners and defenders should take away from this incident.

The first is about risk management. When organizations make changes to their environment–for example, changing a network from air-gapped to online as in the case of this business–the level of risk changes. New areas of vulnerability open up, and partners and IT security teams need to understand and address that.

The second is about preserving data. The first compromised account in this attack belonged to a member of the IT team. All data was wiped, which meant that valuable information–such as details of the original breach, which could have been used for forensic analysis and investigation–was lost. The more information is kept intact, the easier it is to see what happened and to enable partners and the victim organization to make sure it doesn’t happen again.

Responding to a REvil Attack

Sophos recommends the following best practices for partners to help defend against REvil and other families of ransomware and related cyberattacks:

  • Understand the tactics, techniques and procedures (TTPs) that attackers can use and how to spot the early warning signs of an imminent attack.
  • Have an incident response plan that is continuously reviewed and updated to reflect changes in customers’ IT environments and business operations and how they impact your security posture and level of risk.
  • Turn to external support if you don’t have the resources or expertise in house to monitor activity on customer networks or to respond to an incident. Ransomware is often unleashed at the end of an attack, so you need both dedicated anti-ransomware technology and human-led threat hunting, such as Sophos Managed Threat Response (MTR), to detect the tell-tale tactics, techniques and procedures that indicate an attacker is in or attempting to get into the environment.
  • If you or a customer does get hit, incident response experts like the Sophos Rapid Response team are available 24/7 to call on to contain and neutralize the attack.

Dealing with a cyberattack like REvil is a stressful experience. It can be tempting for partners to clear the immediate threat and close the book on the incident, but the truth is that in doing so you are unlikely to have eliminated all traces of the attack. It is important that you take time to identify how the attackers got in, learn from any mistakes and make improvements to security systems. If you don’t, you run the risk that the same adversary or another one might attack again in the future.

This guest blog is part of a Channel Futures sponsorship.

Aug 30

Fewer VMware SaaS Subscriptions Linked to Perpetual Horizon VDI Licenses

By | Managed Services News

Newly promoted CEO Raghu Raghuram remains bullish on the overall shift to SaaS and subscriptions.

VMware SaaS subscription growth has taken a slight hit, as some of its customers continue to stick with perpetual licenses. To be sure, VMware subscription and SaaS revenues are growing at a healthy rate. But the growth rate was marginally less than the company had anticipated during its most recent fiscal quarter.

A key culprit was VMware Horizon, the company’s VDI offering. During its second quarter (FY22) earnings report late last week, VMware said subscription and SaaS revenues of $762 million rose 23% year-over-year. Also, during the quarter that ended July 30, annual recurring revenue (ARR) of $3.2 billion rose 26%. Nevertheless, perpetual license sales of $738 million were 3% higher over the same period last year, higher than expected.

VMware's Zane Rowe

VMware’s Zane Rowe

“We were expecting a few more customers to lean into to the sub and SaaS part of that portfolio, versus the term license,” VMware CFO Zane Rowe said during the company’s earnings webcast. “For a variety of reasons, they chose term, which on the margin actually did impact our split between sub and SaaS and on-prem,” he said.

Overall, VMware revenues of $3.14 billion, which were 9% higher than the same period last year, beat expectations. But concerns about the subscription growth initially sent VMware’s share down 5%. While fewer VMware Horizon deals were subscription-based than expected, Rowe indicated the pandemic was not a weighing factor.

Rowe said VMware was pleased with Horizon’s performance, along with its entire end-user computing (EUC) portfolio, including Workspace One.

“It’s just that the mix, if you will, within those products shifted a little bit more to term than we had expected originally,” he added.

VMware is aggressively adding new cloud management capability to VMware Horizon and Workspace One. Earlier this month, the company announced that all of its VMware Horizon Control Plane services, primarily offered on VMware Cloud for AWS, are also now available with connectivity to Microsoft Azure. VMware Horizon Control Plane services are an extension of the Horizon Control Plane. They enable desktop as a service (DaaS) connected to multiple on-premises and cloud backends.

Bullish on Shift to Subscriptions

VMware expects the rate of growth of its SaaS subscriptions during its second quarter to continue this quarter. In certain geographies and vertical industries, some customers still prefer perpetual licenses over subscriptions, according to VMware CEO Raghu Raghuram. VMware still anticipates a growing share of its customers will continue to prefer subscriptions and SaaS, Raghuram said. VMware has stated its intent to accelerate its shift from perpetual license to subscriptions. At the same time, Raghuram emphasized that VMware will provide its software as customers want it.

VMware's Raghu Raghuram

VMware’s Raghu Raghuram

“If you look out over the next year or so, we are very bullish about our overall subscription and SaaS portfolio,” Raghuram said. “This is a big focus of mine. And if you look at most of our recent products and innovations, they’ve all come to market with a subscription and SaaS business model, and that will continue. In addition, we are checking all of our existing perpetual license software products and making them also available in a subscription and SaaS business model.”

Raghuram, who became VMware’s CEO on June 1 after predecessor Pat Gelsinger taking the helm at Intel, said that work is underway with products including vSphere, its hyperconverged infrastructure (HCI) product line and NSX. “As we do that, we will be strengthening our subscription and SaaS go-to-market mechanisms. Over the next year, I actually expect our subscription and SaaS business growth to accelerate.”

Divestiture from Dell Technologies on Pace

The planned divestiture of VMware from Dell Technologies is on pace to close in early November, both companies confirmed. Dell announced plans to spin-off its 81% stake in VMware back in April. The move will help shave nearly $10 billion of debt from Dell’s balance sheet. Dell said the spinoff will help accelerate its focus on hybrid cloud, edge, 5G, telecommunications and data management. As a standalone company, Raghuram said he believes VMware has an opportunity to grow faster.

“We will have increased strategic operational and financial flexibility to drive VMware growth strategy, while also strengthening our longstanding strategic relationship with Dell,” Raghuram said. “The partnership, we expect. will continue to benefit our customers and partners as well as both Dell and VMware.”