Broadcom Invites 18,000 ‘Active’ VMware Resellers Into Partner Program
The official news comes as the chipmaker upends VMware channel partners’ businesses, sending many scrambling for alternatives.
![VMware resellers learn more about their Broadcom fate VMware resellers learn more about their Broadcom fate](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/blte45ed74c173482d0/654bcf8587ac78040aaff0ac/Partner_program.jpg?width=700&auto=webp&quality=80&disable=upscale)
FRENKYALON/SHUTTERSTOCK
Now, a couple days after Broadcom had promised to shed more light on its plans for VMware resellers, Loyd has laid out details around the “simplified and stronger Advantage Program for VMware by Broadcom.” One of the critical areas to note is that Broadcom has mapped VMware resellers’ previous program tiers to the same tier in Broadcom Advantage. This was done “to minimize disruption,” she explained.
Loyd also said that with her new focus on resell and distribution, she sought feedback from “hundreds of partners globally,” on the Broadcom and VMware sides. That input, she wrote, “was consistent.”
“Solving channel conflict, reevaluate profitability on renewals, incentivize long-term adoption of our products, and simplifying were key themes,” Loyd noted.
In response, Broadcom has “evolved” its Advantage Partner Program “to achieve much of what our partners asked for.”
With that in mind, Loyd detailed the changes taking place inside Broadcom Advantage.
The initial shift ties to the rebate program. Broadcom’s old version was complex and required too much administration, partners told Loyd. And, it did not show “how much money you actually made.”
Broadcom is addressing that confusion by implementing a net-margin model. This way, Loyd said, “all discounts will systematically be disclosed up front. You will now know exactly what you’re making on every deal, consistently across both new and renewal business.”
Next, Broadcom has adjusted its approach to pricing. Before, “so many solutions existed on the price list that you weren’t really sure what to sell and how to sell it,” Loyd said.
So, pricing now reflects four SKU bundles: VMware Cloud Foundation, vSphere Foundation, vSphere Standard and vSphere Essentials Plus.
After that, Broadcom is tackling what Loyd dubbed “predictable partner profitability and deal protection.”
“We heard that renewals matter,” she wrote. “We agree.”
As such, Broadcom is launching “incumbency protection” and deeper up-front discounts.
“Our goal is to protect partners who originally found an opportunity so they can confidently invest in customer adoption and successful deployment of their VMware investments,” Loyd said. “We are creating these incentives for you to drive focus on delivering customer outcomes for 95% of the business through the incumbency protection policy.”
Up next, partners told Loyd they need streamlined systems and tools.
“We saw that VMware experienced rapid growth, and with that came multiple tools with multiple logins,” Loyd said.
To make processes easier, Broadcom now has one portal for all partner-related resources, she added. Expect role-based single sign-on access for all sales tools, systems and dashboards.
Finally, Loyd tackled the thorny issue of channel conflict, although she did not touch on Broadcom’s decision to take the top 2,000 VMware customers away from VMware resellers. Instead, Loyd said that Broadcom is improving its “resourcing and support.”
“Partners consistently shared that cross-route and channel conflict was a challenge,” she wrote. “To reduce channel conflict and improve partner and customer success, we have taken steps to create better alignment with business units, sales and partner teams, and provide better support and resources.”
To achieve that, Broadcom has defined partner-owned and partner-led segments within its customer base, and opened up professional services for partners. That way, Loyd said, “they can drive adoption and customer success at very attractive margins.”
Broadcom also has “redesigned our internal structure so that business units, sales, and partner teams can work together and provide better support and resources to our partners.”
The changes to Broadcom’s partner program align with the company’s $61 billion purchase of VMware, which closed last November. In the months leading up to that event, Broadcom CEO Hock Tan published blogs and appeared at VMware Explore to say that he supports the channel. Many partners expressed wariness. They were concerned that Broadcom was about to treat VMware like it did CA Technologies and Symantec.
Indeed, as soon as the VMware deal closed, muck started hitting the fan. Broadcom laid off thousands of VMware employees. It’s selling much of the VMware campus in California. It terminated VMware partners, only saying it would invite some into Advantage, as it has now done.
In terms of ripple effects, those actions have spurred well-known VMware channel executives to leave Broadcom. So far, the big names include Tracy-Ann Palmer, a key architect of the now-defunct VMware Partner Connect, and Zia Yusuf, head of strategic ecosystem and industry solutions for VMware. Channel Futures hears more VMware executive exits are looming. We’ll keep you apprised as those become public.
Meanwhile, Broadcom has stripped and rebundled VMware’s portfolio in ways many end users and their channel partners view as unfavorable. They say Broadcom is forcing consumption of software VMware customers might not need or want. Plus, the company is offloading VMware’s end-user computing unit, which includes Horizon, and Carbon Black.
All in all, Broadcom’s moves around VMware and VMware resellers have many partners and their clients searching for VMware alternatives. In fact, according to a January poll conducted by Canalys, a Channel Futures sister company, 70% of VMware partners “urgently want to dump Broadcom.”
That’s per Jay McBain, chief analyst at Canalys. The figure, he added, is “unprecedented.”
And, to be sure, providers galore are coming out of the woodwork and talking up their abilities to replace VMware.
From here, the 18,000 VMware resellers invited into Broadcom Advantage have a decision to make. If they accepted the email notice sent to them around Jan. 19, they now have login information for the now-live new partner portal, Loyd said.
As for the future, it’s not clear what Broadcom might do next in terms of reshaping its partner program. Loyd was clear that the company has “a very focused go-to-market strategy” and does not “try to be everything to everyone. Instead, we open big opportunities for our partners to step in, do what we don’t, and profit from it.”
In that vein, Broadcom will continue to find “the best solutions” for partners, Loyd said.
“That takes time,” she noted. “We are not only transforming the business but simplifying solutions and moving partners into the Broadcom Advantage program. Change is disruptive and that’s a lot of change all at once. We did look at areas that were successful and retained those elements, taking opportunities to minimize disruption where it made sense.”
The ultimate goal, she said, is to help global customers simplify and secure their IT environments.
“You, our partners, are key to reaching this goal,” Loyd said. “We are committed to creating value within our ecosystem, which has only been made stronger with the addition of VMware’s partners. Our partners will be able to grow their businesses as we accelerate execution and drive expansion into private and hybrid cloud for enterprises.”
Loyd added that Broadcom will continue to “invest heavily” in the Advantage Partner Program.
From here, the 18,000 VMware resellers invited into Broadcom Advantage have a decision to make. If they accepted the email notice sent to them around Jan. 19, they now have login information for the now-live new partner portal, Loyd said.
As for the future, it’s not clear what Broadcom might do next in terms of reshaping its partner program. Loyd was clear that the company has “a very focused go-to-market strategy” and does not “try to be everything to everyone. Instead, we open big opportunities for our partners to step in, do what we don’t, and profit from it.”
In that vein, Broadcom will continue to find “the best solutions” for partners, Loyd said.
“That takes time,” she noted. “We are not only transforming the business but simplifying solutions and moving partners into the Broadcom Advantage program. Change is disruptive and that’s a lot of change all at once. We did look at areas that were successful and retained those elements, taking opportunities to minimize disruption where it made sense.”
The ultimate goal, she said, is to help global customers simplify and secure their IT environments.
“You, our partners, are key to reaching this goal,” Loyd said. “We are committed to creating value within our ecosystem, which has only been made stronger with the addition of VMware’s partners. Our partners will be able to grow their businesses as we accelerate execution and drive expansion into private and hybrid cloud for enterprises.”
Loyd added that Broadcom will continue to “invest heavily” in the Advantage Partner Program.
Broadcom is inviting more than 18,000 active VMware resellers to join its Advantage Partner Program.
That word comes courtesy of a new blog from channel head Cindy Loyd, vice president of global partner and commercial sales.
The news arrives after weeks of controversy, and in the same week Broadcom said it would officially end the VMware reseller program and its associated incentives.
![Broadcom's Cindy Loyd Broadcom's Cindy Loyd](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/bltb330d738f0e6d617/65c51b27202994040a541227/Loyd_Cindy_Broadcom_2024.jpg?width=700&auto=webp&quality=80&disable=upscale)
Broadcom's Cindy Loyd
Recall that, less than the week before Christmas, Broadcom terminated the VMware partner program. Word soon spread that VMware resellers who did not report at least $500,000 in annual revenue or $50,000 per month would not be invited into Broadcom Advantage. That amount would naturally exclude a number of channel partners who focus on the SMB market. Broadcom has a reputation for only targeting enterprises.
However, Broadcom appears to be including VMware resellers of all sizes in the Advantage program -- perhaps as a result of industry backlash over the intervening weeks? In a document posted last week, but not made public until a source sent it today to Channel Futures, Broadcom states, "There is no universal threshold for partners to join the program."
That seems to mark an about-face for Broadcom, although the point about "active" is the crux. Sources have previously told Channel Futures that thousands of VMware resellers did not, in fact, interact with the company; rather, they paid the $895 partner program fee so they could place the vendor’s badge on their websites and other marketing materials as a mask of assurance to customers. Broadcom does not charge for participation in Advantage, so it’s interesting that the company has shed the paid model and foregone a revenue source that required little to no support.
Regardless, a source tells Channel Futures that Broadcom has invited 95% of VMware resellers into the Advantage program.
See our slideshow above for more of the fresh announcements about the future of VMware resellers and other partners in the Broadcom partner program.
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