VMware Subscription Services

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1 VMware Subscription Services Updated Q VMware Main Title Main Title Main Title Subtitle V.3.0 / Updated March 2013 PROGRAM GUIDELINE

2 CATEGORY Partner Network Program Guideline Table of Contents Purpose of this Guide Subscription Services Program Benefits Distributor, Corporate Reseller and Solution Provider Customer Subscription Services Transactions Examples Self-Service Controls... 4 Price Lists for Self-Service Add-On Orders for Reselling Partners... 5 Distributor Price List Renewals Subscription Services Examples of Pricing Packages vcloud Hybrid Service Billing Plans...7 vcloud Hybrid Service Tiered Volume Pricing....7 Program Rules....7 Distributor Responsibilities Corporate Reseller / Solution Provider Responsibilities Policies Billing and Financial Obligation Price Changes... 8 Grace Period Tier Pricing & Price Change Impact... 9 Resources Key Definitions Contact Us for Partner Support PARTNER NETWORK PROGRAM GUIDELINE / 2

3 Purpose of this Guide This document describes how to access and use the portal features, tools and benefits related to the VMware Subscription Services program and portal. Subscription Services Program Benefits Distributor, Corporate Reseller and Solution Provider Subscription Customer Oversight and Tools: Take advantage of subscription high growth, high frequency, and self-service add-on transaction orders with pricing unique to your customer relationship. Guide subscription growth throughout transaction lifecycle and subscription renewals. Choice of Subscription Term Engagements: VMware Subscription Services are offered based on packaged SKUs, including monthly and pre-pay options; variable and usage monthly costs. Vendor Relationship: (Distributor, Reselling Partner and Customer) established and committed at initial subscription purchase. Time-to-Value Services: Take advantage of packaged tools for your delivery of professional services, designed to help expedite customers time to value and streamline migrations. Customer Subscription Management: In My VMware portal, easily access support as well as manage license and subscription transactions. Established Provider Relationships: Use a preferred VMware Solution provider to purchase and bill both license and subscription transactions. Maintain this relationship automatically with add-on and renewal purchases. Speed & Simplification in Subscription Fulfillment and Renewal: Self-service orders through My VMware and automated provisioning saves time. Subscription Services Transactions As shown in the diagram above, initial orders are passed from the customer to the Reselling Partner, and then to VMware via the Distributor. Initial orders are transmitted to VMware via EDI/TE4E or manually from the Distributor. Add-on orders can be placed via the Subscription Services portal on My VMware (self-service) or via a Purchase Order. Transaction flow points unique from VMware Licensing sales include: Provisioning requests are initially sent from the Distributor to VMware. These requests are orders, creating a financial obligation for the term of the subscriptions. Purchase Orders (PO), then Invoice exchanges for Subscription Services between VMware and Distributor (except ELA transactions), will be compiled and sent as a group during the first week of each month. This PO/Invoice cycle begins with VMware providing Distributors a pro forma invoice. Pro forma invoices provide exact rates/prorates, provisioning dates, term/co-term, monthly fees, and usage relevant to new add-on and renewal orders. Add-on requests to Subscription Services can be initiated through the customer s self-service views in My VMware or through Reseller PO. Self-service add-on requests maintain the upstream partner pricing (see Price Lists) and billing relationships established with the initial purchase. Renewal options available to customers through the Subscription Services portal include: Auto-renewal: No changes, continue as is Modify: Changes in configuration or partner relationship Cancel: End subscription at end of term Payment and term options for Subscription Services include monthly and prepaid. Term length varies from 3, 12, 24, or 36 months depending on product offering. Add-on orders should use a complementary SKU. For example, when a Service Instance begins with a 24 month term SKU, all subsequent add-on orders should also be placed with 24 month term SKUs. This allows continuation of the 24 month pricing benefit to the customer for the full term length. Usage (or Overage) applies to configuration items which are charged based on consumption, whether Subscription Services are monthly or prepaid. Usage charges may be incurred based on consumption of Third Party Licensing or use that exceeds the configuration s SUBSCRIPTION SERVICES OPERATIONAL GUIDE / 3

4 subscribed capacity (e.g., bandwidth). Usage is invoiced in arrears based on actual consumption. Invoicing is prorated (i.e., upon provisioning the event for partial months) and co-termed. Add-on orders will not extend the subscription term, but will inherit the end date aligned to the initial Service Instance purchase. Examples: Initial Order Monthly Billing: For a new Service Instance provisioned on the 15th day of the month with monthly payment terms, the initial invoice will contain 15 days fee in arrears, the full month subscription fee for the upcoming month, and any usage fees in arrears. Add-On Order Billing: For add-on orders the SKU will be the same term as the initial term. An order placed and provisioned in month 5 on day 15 of that month, with a 24 month prepaid subscription, will require a 24 month prepaid add-on SKU. Once invoiced, the fee charged for this SKU will be prorated to 18.5 months. Any usage based monthly invoices will continue where appropriate. VMware will invoice based upon the provisioning date rather than the date of order receipt. Self-Service Controls Subscription customers may place self service add-on orders via My VMware once they have a provisioned service. These selfservice add-on orders maintain the integrity of the initial Reselling Partner relationship for the related Service Instance. This selfservice functionality expedites the time from established need to fulfillment and delivery of additional capacity. The Subscription Services portal provides Reselling Partners and Distributors with oversight and approval of credit limits through the Auto-Approve Maximum or monthly credit limit for self-service transactions. These can be defined per customer or as a default. A low limit requires order-specific approvals for the self-service requests. A high limit or no limit allows self-service requests to pass directly through to provisioning for fulfillment. Partners will be notified via if there are any self service requests pending their approval. Rejected orders require a new or replacement add-on order be placed by the customer. Only self-service orders apply cumulatively to the monthly credit limit for a specific customer. The recurring subscription monthly fee, whether billed monthly or prepaid, is applied against the auto-approve maximum amount. Usage fees, taxes, and partial month (prorated) fees are not applied against the monthly credit limit. Consumption of the monthly credit limit based on: Reselling Partner: The assigned Price List to the individual customer Distributor: MSRP, as suggested by VMware PROVIDER Reselling Partner Distributor Partner CUSTOMER End Customer Reselling Partner IMPACT OF REACHING MONTHLY CREDIT LIMIT Self-service add-on orders are forwarded to the Reselling Partner for approval once the total monthly customer value exceeds the autoapprove maximum. Self-service add-on orders are forwarded to the Distributor for approval once the total monthly customer value for a reselling partner exceeds the auto-approve maximum. Auto-approve maximums are not set by default. If the autoapprove maximum is set, any existing self-service orders will be automatically applied to the monthly credit limit. Pending approvals are clearly listed for case by case authorization in the Subscription Services portal. Reselling Partners and Distributors are not required to update the limit to approve an order, as explained in the following table. Impact Credit Limit settings on Self-service Add-On Orders RESELLING PARTNER CREDIT LIMIT FOR CUSTOMER No Limit Applied DISTRIBUTOR CREDIT LIMIT FOR RESELLING PARTNER No Limit Applied EXPECTED RESULT Customer self-service add-on orders will progress and flow into VMware systems for booking and provisioning Under Limit Under Limit Customer self-service add-on orders will progress and flow into VMware systems for booking and provisioning Over Limite Under Limit Customer self-service add-on orders will pause at Reselling Partner for approval. No additional approval is required by Distributor Under Limit Over Limit Customer self-service add-on orders will pause at Distributor for approval. No additional approval is required by Reselling Partner Over Limit Over Limit Customer self-service add-on orders will progress and flow into VMware systems for booking and provisioning SUBSCRIPTION SERVICES OPERATIONAL GUIDE / 4

5 Price Lists for Self-Service Add-On Orders for Reselling Partners Defined: Price list functionality allows for Authorized Reselling Partners to present customer specific pricing when customers place self-service add-on orders. Price List templates will contain all relevant Subscription Services SKUs, descriptions, current MSRP, and the Reselling Partner s self-service price for their customer(s). The Price List is uploaded to the Subscription Services portal upon Reselling Partner update. Applied: This pricing information will be used for Credit Limit consumption of a Customer for their Reselling Partner. The self-service add-on order capability will be inactive until a Price List is uploaded and associated to each customer by the Reselling Partner. Updates: The Reselling Partner may update prices offered to customers at any time. New or updated price lists apply to orders placed after the price update. Any pending orders will not be affected by price list updates. VMware will notify Reselling Partners of upcoming MSRP price changes. Reselling Partners then obtain current pricing from their Distributors and update their customer facing self-service Price Lists in the Subscription Services portal. Quantity: A Reselling Partner can have multiple price lists and assign them to their customers as appropriate. A single customer Subscription Service instance will have only one price list from their Reselling Partner. Distributor Price List The Distributor view of the Subscription Services portal reflects MSRP, not the Reselling Partners pricing offered to their customers. The Subscription Services portal does not provide the ability to view pricing between the Distributor and Reselling Partners. Reselling Partners obtain current Subscription Services pricing from VMware Authorized Distributor Renewals Auto-Renewal The customer s subscription will auto-renew, using the current configuration and original term length unless the end user proactively chooses a manual adjustment of the subscription or cancellation of service. Newest SKUs and pricing (as per assigned price lists) will be applied to the auto-renewal. The deadline for a customer to opt-out of auto-renewal is 30 days prior to the last day of the current term. Modification of renewal notifications can be made by the customer in the Subscription Services portal. Manual Renewal If a new Purchase Order for a manual renewal adjustment is not processed by end of the subscription term, the service will renew automatically at the current configuration and original term length. A manual renewal adjustment is the only time a customer may elect a change in the Reseller Partner relationship for a specific Service Instance. Cancel Subscription at End of Term The Cancellation of Subscription Services must be selected by the Customer in the Subscription Services Portal at least 30 days prior to the end of the term if the customer chooses. The financial responsibility and impact of a cancellation can vary: If the customer has selected Monthly billing, they remain financially committed for the unpaid monthly fees until the end of term for this Service Instance. Special arrangements can be made to provide a lump sum invoice for the remaining term to terminate the monthly Service Instance liability and billing. If the customer has selected billing, they remain financially committed for any subsequent add on orders, usage or meter consumption until the end of term. If no usage or add-on orders occur, then no financial obligation would follow after the cancellation. Renewals and Pricing VMware Global Support Service representative will confirm and finalize the Service Instance turn down to assure migration of data and applications, with the customer. If the expectation is to carry forward special pricing with a renewal, request for approvals must be resubmitted to VMware. SUBSCRIPTION SERVICES OPERATIONAL GUIDE / 5

6 Subscription Services Examples of Pricing Packages VMware vcloud Hybrid Service Packaging The following table describes subscription packaging and components. Current vcloud Hybrid Service information will be provided through Product Description and VMware Price Book processes. SUBSCRIPTION (FIXED MONTHLY) USAGE-BASED (VARIABLE MONTHLY) ONE-TIME (FIXED) Billing Options Upfront or monthly billing 3, 12, 24, or 36 month terms available Monthly billing Upfront billing Required Components Support Compute (CPU, RAM) Bandwidth Primary Storage N/A N/A Optional Components BC/DR Monitoring IP Space Backup Storage Third Party Licensing Bandwidth Overage Backup Overage Elastic Compute Expansion PSO Migration PSO Recovery Services Data Load SUBSCRIPTION SERVICES OPERATIONAL GUIDE / 6

7 vcloud Hybrid Service Billing Plans The following table describes subscription offerings and applicable billing plans and discounts. OFFERING SKUS TERM BILLING DISCOUNTS Option ELA Volume SPF ELA Dedicated Cloud Core 12/24/36 months or Monthly Built into SKUs per Service Instance only only Add-on Co-term to Service Instance term or Monthly 12/24/36 mo. Co-term to Service Instance (not ELA) Built into SKUs per Service Instance only only Virtual Private Cloud Core 3/12/24/36 months or Monthly 12/24/36 mo. Built into SKUs per Service Instance only 12, 24, or 36 mo Add-on Co-term to Service Instance term or Monthly Co-term to Service Instance (not ELA) Built into SKUs per Service Instance only only vcloud Hybrid Service Tiered Volume Pricing Only applies to storage and compute components Higher unit purchases will receive lower monthly rates Relevant volume tier eligible components, unit quantity must be on a single service Instance Applies to prepaid and monthly billing option SKUs Applies to various term lengths Does not apply to all components, including usage or overage SKUs See price changes and impact on tiered volume pricing, later in this guide. Program Rules Subscription Services participants are expected to: Meet required VMware Partnership program levels. Participate actively in Subscriptions Services Partner onboarding steps and training. Support, reinforce and honor the required VMware product specific terms of use for any Subscription Services. Understand and engage with the published VMware subscription offering pricing, packaging and invoicing policies. Distinguishing factors of subscription offerings compared to perpetual license offerings include metered usage and monthly billing, various term options and more. Proactively setup and maintain customers price list for Subscription Services self-service add-on orders (Reselling Partners.) Approve Subscription Services self-service add-on orders in a timely manner to speed time to fulfillment and value for our shared customers. Honor the continuity of the buying relationships between the customers, Reselling Partners and Distributors for subscription term. SUBSCRIPTION SERVICES OPERATIONAL GUIDE / 7

8 Distributor Responsibilities Distributors are expected to: Align with Subscription Services ordering processing with TG4E, EDI and Provisioning Request. Support new Subscription Services pro-forma and invoicing models. Participate in self-service order approval cycles in a timely manner. Honor financial obligation for the committed term of the Subscription Services. Corporate Reseller / Solution Provider Responsibilities Reselling Partners are expected to: Fulfill Subscriptions Services onboarding steps. Support new Subscription Services billing/ordering/ invoicing models. Maintain the price lists and monthly credit limits and understand their impact on timely and accurate order processing. Support Customer/Reseller and Reseller/Distributor policy and interaction paths. Honor financial obligation for the committed term of the Subscription Services Policies Billing and Financial Obligation VMware will invoice Distributor Partners for Subscription Services and usage, honoring the financial obligation for the committed term. VMware Distributor Partners will invoice Reselling Partners for Subscription Services and usage, honoring the financial obligation for the committed term of the Subscription Services. VMware Reselling Partner will invoice Customers for subscription services and usage, honoring the financial obligation for the committed term. Price Changes VMware has set the following price change policy for subscription commitment and usage: Only recurring subscription components in an existing Service Instance will be re-priced at the Universal Billing Date (UBD) for the forward period. This will occur only if there are add-on subscriptions to the Service Instance after the price change. Price changes for usage will take effect with standard advanced notice. Note: Usage SKUs cannot be proactively quoted or purchased on a prepaid or recurring subscription basis by the customer. When price changes are applied to a customer s existing service or SKU, entitlements for subscription will be moved to a new SKU at the new price point. SUBSCRIPTION SERVICES OPERATIONAL GUIDE / 8

9 SERVICE COMPONENT BILLING TYPE AFFECTED BY PRICE CHANGE BILLING TYPE AFFECTED BY PRICE CHANGE EFFECT ON SKUS Subscription Commitment Recurring Monthly Effective only when customer purchases add-on to existing Subscription Instance. No credits for previously purchased units. Will be reflected in next invoice. New SKUs representing new price points. Usage Charges Recurring Usage for current month will be charged at new price, after 30 days notice period. Will be reflected in next invoice. Same SKU updated for new price point. Grace Period After the price effective date, there is a one month grace period to process quotes (with old SKUs) that cannot be changed. For example: Jan 1 Price book generated and sent to Distributor Feb 1 Price effective date; grace period begins Mar 1 Grace period ends During the grace period, old SKUs and prices will be honored for initial and add-on orders. After the grace period, any orders with old SKUs will be put on hold and resolved individually Tier Pricing & Price Change Impact Changes for tier pricing will have the following impact for recurring and prepaid billing types: Recurring Monthly TIER Upon a new price decrease, existing monthly billing items will not automatically receive the benefit of lower pricing on upcoming invoices. When an add-on order is placed, pricing for the pre-existing plus new ordered SKU will total to determine the tier. The new tier monthly rate will be applied at the next UBD. At time of add-on order, original pricing will apply for partial month only. Upon a new price decrease, no price protection (or credit) is applied based on prior purchases of prepaid SKUs. Add on purchases with prepaid SKUs, made after a price change effective date, will add the preexisting units and new order units to determine the new tier pricing for only the new order items for this Service Instance. NO TIER FLAT PER UNIT PRICE Price changes for recurring services are charged based on a (fixed) flat rate. The price in effect at the time of purchase is applied. Price changes for prepaid services are charged based on flat per unit rate. The price in effect at the time of purchase is applied. SUBSCRIPTION SERVICES OPERATIONAL GUIDE / 9

10 Resources My VMware Partner Central PartnerLink Subscription Services Portal for Customers via MyVMware for Partners via Partner Central Training via Partner University Key Definitions Reselling Partners are expected to: Add-On - Can be either tied to Add-On Components or functionality to a Service Instance (initial, subsequent or renewal transaction) or an Add-On Order tied to orders placed after the initial Service Instance order. Auto Approve Maximum Comparable to Credit Limit. In VMware Subscription Services, it is tied only to selfservice add-on requests and does not include non-selfservice or any other VMware License purchases Configurator Available in the Subscription Services portal, the configurator provides SKUs for a valid new or add-on configuration. Core Minimum initial orderable SKU containing compute, storage, bandwidth, IP addresses, and support. Co-Term (co-terminus) - Applies to placing an add-on order and aligning the end date of the add-on order to the original Service Instance end of term date. Electronic Data Interchange (EDI) and TG4E Order and invoice interaction paths between VMware and our authorized Distributors. TG4E will commonly be used for Subscription Services Provisioning Requests to initiate provisioning, but prior to Purchase Order and invoice interactions based on actual dates. Enterprise License Agreement (ELA) - Preferred pricing program extended to Partners and customers for specific qualifying opportunities. Visit Partner Central for guidelines on this program. Monthly Payment (or recurring) Provides for subscription transactions to be invoiced and paid monthly. This optimizes cash flow for customers. This option also supports a more immediate decrease in pricing that may occur during the term of a subscription. Overage Billable/Payable fees not explicitly ordered, but reflective of consumption of Subscription Services beyond the functionality subscribed to in monthly subscription. Analogous to metered services. - Provides for subscription transactions to be invoiced and paid at the time of purchase. This option tends to offer more cost advantages versus monthly. However this prepaid option does not exclude the possibility of follow-on monthly invoices. Where a customer chooses prepay, they may receive subsequent monthly invoices for Overage or Usage consumption. Price Lists (Rate cards) Subscription Services functionality allows Reselling Partners to present customer specific pricing for self-service add-on orders Price Book VMware s published pricing including SKUs, descriptions and MSRP. Pro Forma Invoice An advanced or preview invoice provided to VMware Distributor Partners, such that they can create exact match Purchase Orders to send to VMware based on proration and co-term as appropriate for initial and monthly subscription transactions. Prorate Partial month or term amount payable with quantity of days reflecting the exact duration of services delivered. Provisioning Fulfillment of order requests of VMware hosted services. Provisioning Request Financially committed order for VMware subscription products, used as a precursor to follow-on Purchase Order. This preliminary request speeds time to delivery of the services to the customer and enables exact matching (including service date, proration and co-term details) for the Purchase Order that follows as a part of the monthly subscription billing cycle. Reselling Partner - Represents qualifying partners to Subscription Services, initially including Corporate Resellers, Solution Provider Premier and Solution Provider Enterprise. Service Instance Single access point to a single configuration of VMware Subscription Services. This is often referred to as a tenant or site in the SaaS marketplace. Service Instance ID is the unique alpha numeric identifier for this site. Service Instance Name is the name provided as default for Service Instance; however this can be updated to reflect the customer s use of this Service Instance (e.g., Dev-Intranet, Prod-DotCom). Subscription Services Products hosted, offered and supported by VMware. Initially including vcloud Hybrid Service. SUBSCRIPTION SERVICES OPERATIONAL GUIDE / 10

11 Usage Billable items not explicitly ordered, but reflective of consumption of on-demand services. Universal Billing Date (UBD) VMware Subscription Services are compiled for one time per month in the early days of each month for consistency and efficiencies in invoice preparation. Contact Us for Partner Support Pre-Sales questions on VMware products should be directed to your Partner Business Manager and/or VMware extended sales teams. Post-Sales product questions on VMware products should be directed to the VMware Global Support and Services teams. VMware Partner Programs and Subscription Services portal questions should be directed to the Partner Network team or your Partner Business Manager. Your Cloud Advantage Accelerate IT. Accelerate Your Business VMware, Inc Hillview Avenue Palo Alto CA USA Tel Fax Copyright 2013 VMware, Inc. All rights reserved. This product is protected by U.S. and international copyright and intellectual property laws. VMware products are covered by one or more patents listed at VMware is a registered trademark or trademark of VMware, Inc. in the United States and/or other jurisdictions. All other marks and names mentioned herein may be trademarks of their respective companies. Item No: VMW_SubscriptionServies_v1 10/13

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