VMware 2007 Annual Report Download - page 12

Table of Contents
We have a direct sales force that complements our channel partners’ efforts. Our sales force works with our channel partners to introduce
them to end-user customer accounts and new sales opportunities. Our channel partners also introduce our sales force to their end-user customers.
In addition, our channel partner network includes certain system integrators and resellers trained and certified to deliver consulting services
and solutions leveraging VMware products.
Our strategy is to position our products within a variety of organizations where end-user customers might consider buying virtualization
solutions. We provide product training and marketing assistance to our channel partner network.
We generally do not have long-term contracts or minimum purchase commitments with our distributors, resellers, x86 system vendors and
systems integrators, and our contracts with these channel partners do not prohibit them from offering products or services that compete with
ours.
As of December 31, 2007, we had agreements with nearly 10,000 channel partners.
We primarily sell our software under perpetual licenses, and our sales contracts generally require end-user customers to purchase
maintenance for the first year. Software maintenance is sold both directly to end-
user customers and via our network of channel partners, and the
majority of professional services are sold directly, with some professional services sold via our channel partners. Our sales cycle with end-user
customers ranges from less than 90 days to over a year depending on several factors, including the size and complexity of the customer’s
infrastructure.
The competitive landscape in which we operate includes not only other software virtualization vendors, but also traditional hardware
solutions. In establishing prices for our products, we take into account, among other factors, the value our products and solutions deliver, and the
cost of both alternative virtualization and hardware solutions. We believe the significant number of customers who also purchase our software
services reflects a clear customer perception as to the value of our software services.
Our marketing efforts focus on communicating the benefits of our solutions and educating our customers, distributors, resellers, x86
system vendors, systems integrators, the media and analysts about the advantages of our innovative virtualization technology.
We raise the awareness of our company, market our products and generate sales leads through industry events, public relations efforts,
marketing materials, free downloads and our website. On average, our website receives approximately 700,000 unique visitors each week, as
measured by a third-party tracking system. We also have created an online community called VMware Technology Network (“VMTN“) that
enables customers and partners to share and discuss sales and development resources, implementation best practices, and industry trends among
other topics. Attendance at VMworld, the largest annual industry conference on virtualization and hosted by VMware, has grown from
approximately 1,400 attendees in 2004 to more than 9,000 attendees in 2007. We also offer management presentations, seminars and webinars
on our products and topics of virtualization. We believe a combination of these efforts strengthens our brand and enhances our leading market
position in our industry.
Customers
Our customers include 100% of the Fortune 100 and approximately 90% of the Fortune 1,000. Our customer deployments range in size
from a single virtualized server for small businesses to up to thousands of virtual machines for our largest enterprise customers. In periodic third-
party surveys commissioned by us, our customers indicate very high satisfaction rates with our products and many have indicated a strong
preference for repeat purchases.
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