Ross Brown is listening. Frank Rauch is listening. Pat Gelsinger is listening. Based on all that feedback, VMware is preparing to enhance its partner program for software’s next wave. Heck, even Michael Dell is listening — and vowing not to harm VMware and parent EMC amid Dell’s pending buyout of the storage giant and its virtualization sibling.

Much of the listening occurred at VMware Partner Leadership Summit 2016, a March conference featuring the virtualization company’s top partners. Far more than a VAR or IT consultant gathering, executives from some of the world’s most strategic hardware, software and distribution companies were on hand.

Sources say key leaders — Dell CEO Michael Dell, VMware CEO Pat Gelsinger and VMware Senior VP of Worldwide Partners and Alliances Ross Brown, among others — delivered the right blend of vision, leadership and listening during public and private conversations at the conference. Smaller and more intimate than VMware’s former Partner Exchange (PEX) events, the leadership summit apparently achieved its key goal: Generate open, honest communications between VMware and its partner ecosystem, including technology alliance partners.

“The balance was just right,” says the CEO of an IT consulting firm who attended. “You really could mingle with VMware’s executive team. I have a clearer view of where they’re going. And they have a clearer view of my business challenges. Even Michael [Dell] was listening.”

VMware’s Next Partner Moves: Early Clues

So where exactly is VMware going? Most eyes are focused on Dell’s pending $67 billion buyout of EMC, which is expected to be official between May and October 2016. Amid EMC’s big ownership stake in VMware, the virtualization company essentially is part of the deal.

But take a closer look and you’ll find VMware’s Brown and channel lieutenants like Frank Rauch aren’t waiting around for command-and-control orders from EMC or Dell. Certainly, partners can expect to see more and more synergies between the three companies. However, VMware continues to march to its own beat. And a new drumroll is just about to start.

During a post-conference phone call with ChannelE2E, Brown recently shared some of the details with us. You already know some of the basics: VMware wants to empower channel partners for the Software Defined Data Center (SDDC). The journey will be multi-cloud in nature. And NSX will emerge as VMware’s fabric for the multi-cloud strategy.

But changes to the partner program are coming. In some ways, VMware used the event to telegraph new incentive programs that will emerge later this year. It’s sort of like a March movie trailer — designed to entice audience feedback — before the final cut of the movie premieres later this year…

“We wanted to communicate what the company is doing to address key industry trends,” says Brown. “Every move you make either enables or disables your business amid those macro-environment trends.”

Not surprisingly, VMware wants to empower partners for SDDC, VSANs, NSX and more. But that doesn’t mean the company wants each partner to sell VMware’s entire portfolio. “It’s rare to have a partner sell everything in our portfolio,” Brown says. “Rather than forcing partners to conform to our business, we want to inject our offerings into their existing businesses.”

As part of that journey, VMware also teased out some “operational impacts” for partner program updates that are on the way later this year. Give-and-take with distributors was particularly important, and VMware will fine-tune its plans based on feedback from the conference.

NSX: Bigger Than the First Virtualization Wave?

The foundation for VMware’s original partner program stretches back to 2004 or so. Back then, virtualization was a land grab — and VMware was the best game in town. Fast forward to the present, and Brown is preparing to update the partner program in a range of ways — with big opportunities in network virtualization/SDN looming.

Brown hints that you’ll see a shift from “back end, rebate heavy” engagements to one that’s “very deal focused. We’ll reward partners for creating pipelines.”

Among the most promising pipeline involves NSX — which ended 2015 at a $600 million revenue run rate. “It’s the fastest-growing infrastructure product in history,” Brown crows. “I want that to be, economically, the most attractive product in the market. It creates a completely new category of goods with huge margin and huge growth built in. If anyone looks at me and says the opportunity isn’t obvious, please let me know where I screwed up.”

NSX: Early Use Cases

Still, the NSX network virtualization push faces some challenges — including a need for customer case studies. But they are emerging. A prime example involves security: Network virtualization transforms each node into its own “segment of one.” In essence, every node can be its own firewall and/or filter. The upside? Partners can work with VMware and its alliance members — names like Palo Alto Networks, Trend Micro and Intel Security (i.e., McAfee), among others — to deliver vastly improved security.

Another key case study involves application portability. Here, NSX will make it easier to move applications on and off of public clouds, or in and out of data centers.

So far, the NSX business has been mostly a direct sales opportunity. Only about 60 partners have deeply engaged on the platform. “When we scale it to 600 partners, it’s a massive business opportunity in terms of deal sizes,” Brown asserts.

But is the NSX party reserved for big partners? “This isn’t a big vs. small partner conversation,” he says. “Some of our most successful partners have fewer than 100 employees, and they are laser focused on the opportunities I’m mentioning.”

While opportunities like Horizon (hosted desktops) and Airwatch (enterprise mobility management) typically don’t require much time for partners to master, the NSX business involves a “much higher learning curve,” Brown concedes. After all, it’s a networking product running on top of vSphere, and many partners will need to study the OSI 7 layer networking model while also tackling switching, routing, firewalls, compute and more.

NSX, he says, “Is a massive opportunity but does require significant investment in technical people. It’s not a casual product. But it is an incredible product. Don’t kick the tires. Look at it and either go deep or work in market adjacencies.”

Opportunities and Challenges

So there you have it. A healthy dose of intense listening. A promising platform in NSX. And the need to adjust VMware’s partner program to build the NSX pipeline, while accelerating other product pipelines.

Program changes are coming later this year, though Brown didn’t reveal exactly when. Standing still and resting on VMware’s laurels isn’t an option. Targeted layoffs and slowing growth triggered key concerns on Wall Street in January 2016. Plus, some pundits are worried about VMware’s overall cloud strategy — especially as Amazon Web Services and Microsoft Azure continue to gain momentum.

The chatter prompted CEO Pat Gelsinger to clarify VMware’s cloud strategy during an earnings call back in January. At the time, Gelsinger mentioned forthcoming NSX enhancements that will allow partners to manage workloads across numerous public and private clouds. Once those enhancements arrive, the VMware channel team must inspire partners to drive those NSX deployments.

For Brown, that means it’s nearly time for some key partner program changes… Stay tuned.