A local government licensing deal between Gen-i and virtualisation software vendor VMware has raised the hackles of rival integrators.
Gen-i offered local government customers significantly reduced pricing on VMware software, sparking speculation that a number of other integrators approached the Commerce Commission about the deal. However, this claim remains unsubstantiated.
In addition to VMware licences, the offer included training from Gen-i subsidiary Auldhouse and could be accompanied by other value-added services.
While acknowledging Axon had raised concerns about the offer with VMware, chief executive Scott Green says his company doesn't see the relevance of approaching the Commerce Commission.
Anti-competitive behaviour is not the issue at all, says Green. “The councils are not doing anything wrong by taking advantage of an offer that a vendor has extended. I don’t think Gen-i has done anything wrong in terms of negotiating with the vendor to put together a special offer that is only available through them.”
For Green, the issue is that VMware did not consider what impact agreeing to the programme would have on the rest of the channel. “It was a manufacturer that made a silly decision and we have manufacturers that make silly decisions all the time. If we took them to the Commerce Commission every time they make a silly decision, we’d be very busy with the Commerce Commission.”
Green says the offer ran the risk of discouraging other partners from advocating VMware offerings to local councils, who would be likely to order through Gen-i to take advantage of the special pricing. “That was our issue with VMware and I think that having a bit of time to reflect on that position, VMware probably recognises the error of their ways.”
Axon also made its views on the programme known to other companies in the channel and encouraged them to raise the issue directly with VMware if they had the same concerns, says Green.
Eagle Technology chief executive Gary Langford says the agreement between VMware and Gen-i "was pretty disappointing, especially if it was done as a fait accompli to one partner without any consultation to the other partners”.
“Any local government or client should be free to procure the VMware solution from a provider of their choice," says Langford.
Eagle had no comment regarding any possible Commerce Commission action by any organisation.
Paul Wilson, Gen-i’s head of Wellington sales, confirms the company has not received any approaches from the Commerce Commission regarding the VMware offer.
He says the offer is an example of the company’s strategic approach to client relationships. “It led to a compelling proposition that we could offer our government clients for a limited time.”
Gen-i regularly approaches key vendors, such as VMware, to look for the best offerings it can share with clients, says Wilson. “The VMware offering was well received by our government clients and is the direct result of our strategic partnerships and relationships, as well as our ability to direct resources and investment into projects that meet government sector needs.”
VMware would not comment on the offer, saying the “matter is commercially in confidence”.