Info-Tech analyst, VMware partner denounce Broadcom’s new channel strategy

Broadcom gave the market, and specifically the channel, an unwelcome New Year’s surprise when it announced plans to end the VMware partner program effective Feb. 5, precisely the sort of action that was predicted by analysts and feared by customers and (now) former resellers, says John Annand, executive councilor practice lead at Info-Tech Research Group.

Annand,  who in a former career once sold, installed, and configured VMware, said the VMWare partner program has been around since the company’s inception in 1998 and has long been a darling of the reseller, VAR, and channel communities.

“Almost a rite of passage certification for so many IT professionals, especially early in their career, it was so popular that a scant 12 years later, the unofficial meetups, chatrooms and email lists of practitioners banded together to form VMware User Group (VMUG),” he said.

“An organization independent of VMware that quickly turned into a global organization with a mission to help members connect, collaborate and network with fellow VMware users, VMUG has chapters in most major cities, put on its own conferences, and developed its own training materials, webcasts, and even awards.”

Among those partners impacted by Broadcom’s move is Whipcord Edge Data Centers, an infrastructure service provider with data centre facilities in Toronto and Lethbridge that has offered private cloud services for more than 10 years and leverages VMWare’s Cloud Service Provider program.

In addition to receiving the VMware Partner Programs Termination Notice on Dec. 22, said Dan Hamilton, Whipcord Edge’s chief operating officer (COO), the company also received a CSP-specific termination notice.

“The second paragraph starts with ‘effective April 30, 2024, the ability to transact as a VMware Cloud Services Provider, under the VMware Partner Connect Program, will come to an end.’

“That was a bit of a surprise. We knew about the changes to the bundles and pricing on the reseller side, but nothing at all about changes to the CSP program.”

Hamilton added that “under the CSP program, we rely on the aggregators to provide our link with VMware in terms of information and concerns regarding the program. Our aggregator (Ingram Micro) has not been able to provide details yet. When reaching out to VMware directly, they point back to the aggregator.

“We’re waiting now for more information at this point with a looming end date and no details. It’s quite concerning since we are not sure if there will be structural changes to the CSP model.”

Annand said that VMware was a company that embraced partners both on the sales enablement (resellers, MSPs and consultants) as well as on the technology side (Veeam, Microsoft, etc). It was a company that had collaboration as part of its DNA.

“The result was a product that was comparatively easy for the enterprise to buy and was a sufficiently complete as a solution. And where perhaps there were deficiencies, other OEMs and independent software vendors were encouraged and incentivized to help fill in those gaps. The result was stability and innovation which let whole generations of Infrastructure professional rest easy at night.”

Broadcom, at its heart, he said, “appears to me to be more like a private equity company. Concerned about operational efficiencies over technological upheaval and revolution. They have announced an end to perpetual licensing (which, to be fair, VMware was moving towards already) and promised a simplification of the license model.

“This means bundling fewer subscription-only SKUs at average higher price points. No longer will you just be able to buy the bare necessities of what you need. Fewer partners will mean less competition on price and greater onus for the enterprise to solution design for themselves.”

The acquisition, said Annand, has been a “great move for Broadcom and its shareholders. Broadcom’s ongoing public communications continue to prove that there is little to no – to perhaps negative – upside for former VMware customers.”

Channel Daily News did reach out to VMware Canada for comment, but at press time, had yet to receive a reply.

When contacted about Hamilton’s concerns, a spokesperson for Ingram Micro Canada said, “I have forwarded this to the team, to work with the customer. And at this time, we are unable to provide any comments.”

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Paul Barker
Paul Barker
Paul Barker is the founder of PBC Communications, an independent writing firm that specializes in freelance journalism. He has extensive experience as a reporter, feature writer and editor and has been covering technology-related issues for more than 30 years.

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