How AWS Partners Are Creating New Revenue Streams with VMware Cloud on AWS

By Jackie Vendetti, Content Developer – AWS
By Sam Walker, Solutions Architect – AWS

AWS Partners can grow their business by accelerating customer migrations to Amazon Web Services (AWS) and create new revenue streams by modernizing on VMware Cloud on AWS.

VMware Cloud on AWS helps customers including enterprises, government entities, and startups migrate to the cloud 46% faster on average and at a 43% lower cost as compared to other solutions, according to a 2020 IDC report on the business value of VMware Cloud on AWS. Meanwhile, applications run an average of 37% faster and customers have easier access to modernize their applications with AWS services.

This post provides insights into the partner growth opportunity, including stories from Xtravirt and Terasky, two leading AWS Partners with VMware Cloud on AWS practices.

AWS Partners that start a VMware Cloud on AWS practice can see anywhere from a 10-15% revenue lift in their overall services revenue. Partners can grow their VMware Cloud on AWS practice through professional and managed services, modernization, AWS funding, and by expanding their customer base.

Professional and Managed Services

One way AWS Partners are monetizing their VMware Cloud on AWS practice is by providing a broad set of services to accelerate customers time to value. These vary according to the partner’s competencies, and can include planning, readiness, migration, testing, disaster recovery, compliance, security, and managed services.

The Total Addressable Market (TAM) for Cloud Managed Services for 2022 was $267 billion, according to Grand View Research‘s “Managed Services Market…2023-2030” report. The services market is predicted to grow to over $600 billion in the next seven years on top of the market size of USD 3.11 billion market opportunity that already exists for VMware Cloud on AWS partners.

For every dollar of VMware technology sold through partners in 2022, IDC estimated partners would realize an average “multiplier effect” of an additional $6.70 in services revenue and cross- solution sales. Services delivery accounts for the bulk of the multiplier effect.

Modernization Opportunities

VMware Cloud on AWS offers long-term modernization opportunities for both infrastructure and applications. By moving to VMware Cloud on AWS, a customer’s data is now hosted on AWS with access to over 200 AWS services including machine learning, serverless, and data analytics services.

AWS Partner Funding Programs

Partners find that deals with AWS funding are twice as likely to close as those that have no AWS funding behind them. There are certain requirements partners must meet to qualify for AWS funding, so work with your primary partner point of contact to see if you meet the requirements.

Expanded Customer Base

AWS Marketplace represents an opportunity to get your services in front of over 2 million subscribers, as AWS Marketplace makes it easy to bundle professional and managed services with the purchase of VMware Cloud on AWS.

A 2022 Forrester study showed that overall win rates increase by 27% when deals are transacted through AWS Marketplace. Read more about the additional benefits in this AWS blog post about the Total Economic Impact partner opportunity analysis for AWS Marketplace Sellers.

AWS Partners Report Increased Revenue with VMware Cloud on AWS

Two AWS Partners, Xtravirt and Terasky, shared that VMware Cloud on AWS is having a positive impact on their revenue growth. Revenue from VMware Cloud on AWS was up 82% for all of our partners in 2022, and VMware Cloud on AWS represented 10-15% of some of our partners’ service revenue.

Figure 1 – AWS Partners are increasing their revenue with VMware Cloud on AWS.

Xtravirt’s Customers Save 20-40% in Operating Costs with VMware Cloud on AWS

Xtravirt, an AWS Select Tier Services Partner based in the UK, specializes in cloud consulting and managed services. It continues to see growth with its practice and doubled the number of VMware Cloud on AWS customers in the last quarter alone.

“VMware Cloud on AWS is a fantastic opportunity for our VMware customers to extend into the cloud,” says Robin Gardner, Director of Strategic Services at Xtravirt. “They are able to leverage existing skills, and gain the benefit of a cloud environment without first having to modernize applications or follow a strictly cloud native journey.”

Xtravirt has helped a number of its customers unlock stalled cloud migrations by using VMware Cloud on AWS. While some organizations may have the intention of creating a fully-native cloud architecture, the reality for most is they underestimate how complex and time-consuming it can be to move wholesale.

By using a combination of cloud-native and VMware Cloud on AWS, organizations have more flexibility to choose which applications to modernize, which to simply migrate to the cloud, and which to retire. Refer to the chart below to see how times differ for cloud migrations using VMware Cloud on AWS vs. cloud-native migrations.

Figure 2 – Shorter migration timelines with VMware Cloud on AWS

Xtravirt reports that customers save 20-40% in operating costs by moving workloads into VMware Cloud on AWS. From there, they can either continue the journey through modernization of the frontend, or focus on leveraging the benefits of integration to broader AWS services. Either way, being on VMware Cloud on AWS reduces costs and lowers operational incidents for their customers.

Xtravirt recently used VMware Cloud on AWS to get a customer back up and running after a ransomware attack. Using VMware Cloud on AWS as a trusted recovery environment, initial services were quickly available and business restoration could commence faster than if the data center had to be completely cleaned first. The customer is now looking to refactor their entire disaster recovery strategy using VMware Cloud Disaster Recovery (VCDR).

Xtravirt also finds VMware Cloud on AWS provides an ideal solution for higher education institutions with an annual cycle of student onboarding and staff research projects. For university IT departments, tens of thousands of students arrive at the start of each term, needing infrastructure services and the technology to support their research. This need for rapid scaling for 10 months out of the year places a significant operational strain on teams and budgets.

“VMware Cloud on AWS provides the scalability, control, and governance that higher educational institutions need,” says Gardner.

Terasky Sees Increased Opportunities with VMware Cloud on AWS

Terasky, an AWS Premier Tier Services Partner with the Migration Consulting Competency, says that adding VMware Cloud on AWS into its practice opened up a number of opportunities. The solution is a way to upsell other services, helps build trust with new customers, and one of their largest deployments involved hundreds of nodes.

“If someone is already with VMware on-premises, VMware Cloud on AWS is an ideal solution to move to the cloud,” says Lir Shif, VP, Solution Architecture at Terasky. Customers save time and money because it’s the same as operating on-premises and there is less of a learning curve for cloud adoption.

According to Shif, “VMware Cloud on AWS seems to be the best solution for the first step of re-hosting workloads.” This is also referred to as a “lift and shift” strategy and is often the first path customers take to migrate to the cloud. Once the workloads are in the cloud, customers can close their data center and start the next phases of cloud migration, re-platform/re-factor, to truly enjoy the benefits of the cloud.

Terasky uses VMware Cloud on AWS to help customers with a variety of use cases. One is data center extension, when a customer needs to eliminate additional overhead on-premises. As businesses increasingly rely on technology to grow their business, they’re looking for elasticity in their data centers to support business requirements.

Terasky customers are looking at VMware Cloud on AWS as a beneficial way to extend their data centers into the cloud to support new business demand as it arises. Customers leverage existing knowledge in their organization while also leveraging the abilities of additional public cloud services.

Disaster Recovery as a Service (DRaaS) is another major use case Terasky supports, and it’s a key part of creating a business continuity plan without the challenges of physical infrastructure. Configuring their first disaster recovery use case with VMware Cloud on AWS was relatively easy because Terasky was so familiar with the underlying infrastructure and it worked the same.

Terasky also uses VMware Cloud on AWS for data center migrations and infrastructure modernization efforts. As Shif explains, “You have to be an expert in AWS, not just VMware Cloud on AWS. You need to know networking, how the solution interacts with other services, and how you can build other applications leveraging AWS services in order to be successful.”

Conclusion

AWS Partners are benefiting from using VMware Cloud on AWS to help their customers move quickly and safely to the cloud and modernize on AWS.

Learn more about working with AWS to build your VMware Cloud on AWS practice. We offer funding, training, and enablement to ensure partner readiness with VMware Cloud on AWS, marketing support, sales plays, ready to use campaigns, and additional funding for content creation.