VMware Partners, Rival Vendors React to Broadcom Axing Channel Program

Many VMware partners got shocking news in late December and returned to the office on Jan. 2 with a new directive: Figure out what to do as Broadcom terminates the VMware partner program.

Just before Christmas, around Dec. 21 or 22, Broadcom, the new owner of VMware, informed VMware partners of significant changes taking effect in early February.

“[W]e will be transitioning all of VMware’s partner programs to the by-invitation-only, award-winning Broadcom Advantage Partner Program,” Broadcom wrote, according to an email obtained by Channel Futures. (Incidentally, here’s the reaction that line garnered from a couple VMware partners on Reddit: “Lmao what awards has the Broadcom partner program won???” wrote user cylemmulo. “Award for most customers lost in one financial quarter,” responded user RiceeeChrispies.)

Multiple reports — some media, some from VMware partners themselves — indicate that, to receive an invitation, partners must show at least $50,000 per month or minimum $500,000 per year in VMware revenue. That will exclude a number of channel partners who focus on the SMB market. Of interest is that one supposed VMware partner on Reddit reported making $40,000 per month and receiving an invitation to join the Broadcom Advantage Partner Program.

Meantime, VMware partner programs will cease to exist as of Feb. 4. Incentives will end on that day, or earlier, as well.

The changes do not affect VMware’s end-user computing channel program, because Broadcom intends to sell that division. That’s the group behind products including Workspace One and Horizon.

Also, VMware service-provider partners appear to have until April before Broadcom ends their contracts.

One purported VMware partner program staffer wrote on Reddit that VMware by Broadcom employees “didn’t see this coming.”

“Everyone is surprised by this action,” wrote user TheFromoj. “In fact, I don’t even have an internal email in the matter and [am] hearing about it here.”

“Broadcom remains committed to creating value within our combined ecosystem, which has been made stronger with the addition of VMware partners," a Broadcom spokesperson told Channel Futures in an email. "Effective Feb. 5, 2024, Broadcom will be transitioning VMware’s partner programs to the invitation-only Broadcom Advantage Partner Program. Based on recent discussions with hundreds of partners globally, this transition will help our partners achieve even greater opportunities for profitability through simplified bundled offerings and more opportunities for service revenues.”

What’s Next for VMware Partners?

In terms of what’s next, a number of VMware partners say they’re still in the dark. Broadcom said in its email that “partner invitations into the Broadcom Advantage program will begin in January and the timeline will vary by partner type and route to market.” (This calls into question the above-partner’s assertion about already being invited into the Broadcom fold.)

Broadcom’s rationale for doing away with the VMware partner program reflects its previous moves with Symantec and CA Technologies. (In fact, as one Reddit user, moldyjellybean, put it: “If you we were paying attention when they bought Symantec, we’d know this was coming.”)

Indeed, Broadcom has cemented its reputation for buying businesses and stripping them to the bone to increase margins. And, because of that, few industry observers actually are expressing surprise around the dissolution of the VMware partner program — even as the changes to seem to go against Broadcom CEO Hock Tan’s earlier assertions that his company would work with customers “of all sizes.” One tech consultant, Gustav Eriksson, predicted on LinkedIn that, as a result of its new channel program requirements, Broadcom likely will see an exodus of SMB and mid-market VMware partners and end users.

“Broadcom's strategic shift to an invite-only model raises questions about the future landscape of VMware partnerships, especially regarding accessibility and inclusivity for smaller resellers and managed services providers,” Eriksson wrote.

Broadcom, for its part, said in a statement sent to The Register that it has spoken with “hundreds of partners” around the world and sees the upcoming “transition” as one that will help them “achieve even greater opportunities for profitability through simplified bundled offerings and more opportunities for service revenues.

How Can VMware Partners Protect Themselves, Customers?

As for ways VMware partners can protect themselves and their customers? That’s also a question with slowly unfolding answers. Channel Futures will continue exploring this issue over the coming days. Solutions could include renting licenses from larger partners or switching customers to alternative platforms, though that process doesn't appear to be as seamless as some of VMware’s rival vendors are trying to portray. In addition, it’s not clear how multiyear VMware contracts held by partners that don’t meet Broadcom’s revenue threshold will fare.

Broadcom’s upending of the VMware partner program also comes as the behemoth chipmaker has enacted thousands of layoffs and nixed VMware’s perpetual licensing model. From now on, customers must buy via subscription, and the bundles well could include software they don’t want or need (more on this in the slideshow above).

Above, we bring you a range of VMware partner reaction to the coming shift (perhaps the most succinct summary of the bunch: “Sad to see VMware die like this,” via user HerrTarkanian on Reddit). That Broadcom made its announcement just before the end of the year, and amid the Christmas season, garnered particularly scathing remarks. We also have included some VMware competitors’ comments as they seek to capitalize on the probable wave of migrations.