VMware Partners, Rival Vendors React to Broadcom Axing Channel Program
From anger and vitriol to mockery and opportunism, we sum it all up.
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On Reddit, reaction to Broadcom’s termination of VMware’s partner program varied in intensity.
“Broadcom is … going to cause VMware to lose its position as the industry leader in virtualization,” wrote user Fourply99 on Reddit. “Competition sees this mess and will pounce. What a shame.”
Another, Ok_Criticism_2573, reported not yet getting an invitation (and, in fairness, Broadcom’s stated timeline pointed to January as the start of those messages), “which sucks since I have a large vSan deal 6 months out. Going to sign up with Nutanix to hedge. Thanks, Hock.”
And, in response to Broadcom’s intent to target enterprises via its partner program, another Reddit user expressed frustration.
“[W]ell, it's time to start looking for new alternatives and probably advise our customers to do the same since most of them are SMB and medium-size companies,” said deadeyes83.
For some VMware partners, the extent of Broadcom’s uprooting of its 26-year-old acquisition has them shaking their heads.
“Broadcom making me wonder how they find new ways to butcher VMware every day is getting impressive,” wrote user Fourply99.
Djaesthetic joined in the mockery.
“Broadcom taking one look at the acquisition of Twitter and thinking, “Hey, WE could do that!!!”
I_love_quiche quipped, “What would they rename VMware to? ‘L, formerly known as VMware’”?
“I work for [a] VCPP partner,” wrote user ZibiM_78. “We have multi-year contracts for providing managed IaaS to our customers. Lot of investments into the colocation, hardware, VMware portfolio and in 4 months we need to transition or we will kiss these money goodbye. Kinda hard pill to swallow after 10 years of relationship.”
“We’re in the same boat,” replied user grrrfld. “I‘d happily transition to whatever program Broadcom has to offer if only they would tell us what exactly that program entails and what the requirements are… before canceling the old program. You‘d expect with how long it took them to get approval for the takeover at all they‘d be more prepared by now.”
“Same boat,” said user Alsmk2, adding a "NSFW" vulgarity.
User bschmidt25 took the sarcastic route: “Merry Christmas! Love, Hock”
To which another user, dlucre, responded, “This ship is sinking. Time to jump.”
A number of partners are looking into VMware options, including Verge, Nutanix, SoftIron and a variety of open-source platforms. (Fair warning, if you’re sensitive to cursing, this slide contains vitriolic thoughts on Broadcom’s moves; we’ve tamed them somewhat.)
For its part, Nutanix is being particularly proactive about trying to entice VMware partners. Upon visiting its website, a chat box immediately opens asking visitors if they want to learn how the company supports VMware environments with unified management.
But the vendor may have to do more to get VMware partners on board.
“Nutanix AHV is OK,” wrote one user on Reddit. “I just don't like the fact I can’t bring a SAN into the ecosystem. If you want to expand your storage space you have to buy a storage node … or I have to buy a compute node and load it with drives then bring it into the cluster.”
Other VMware partners are eyeing Microsoft, though not perhaps happily.
“For little sh**s like us I think our only option is Hyper-V,” user itsverynicehere said on Reddit. “We already own all the M$ licensing for the VMs we host, which includes the hypervisors, might as well use it for the hosts. Probably have to add f*****g system center licensing? God, can't even remember how all that works…F**k VMware, they are on the path to being so niche they are useless. F**k them for forcing us into MORE Microsoft and doing pointless work. With Horizon all up in the air it's a total f**k you by VMWare. Feeling is mutual at this point. … Run everyone, run fast.”
User Alsmk2 agreed.
“It's honestly unbelievable how quickly they're burning VMware to the ground. What's the point in buying it to instantly f**k s**t up to this degree? It's a solid product that's leaps and bounds ahead of any competition, but it's not solid enough to stop Microsoft, Nutanix and Co. from making a killing. This is like Oracle and Sun all over again, only on a far bigger scale with a far better product. Bye bye, vSphere … You've paid my mortgage for 20 years. Time to move on.”
Another self-disclosed VMware partner, SquizzOC, expressed a strange sense of relief.
“There’s barely any money in it for us,” the user wrote about their VMware business. “With Broadcom buying them, I will be so happy if they just go direct so I never have to deal with these a***oles again.”
As for what VMware partners will do for existing customers, that remains a huge unknown. Reddit user nobackup42 said his/her company doesn't generate the rumored $50,000 in VMware revenue.
“So basically we have to hand over all our current customers to some other ‘Premium Partner’.”
nikade87 agreed.
“We're not even close to your numbers, so I guess we're out too. Any idea if there will be like a big aggregator you can buy your licenses from and re-sell? Like a VCPP partner in each country that all the small ones are able to buy from.” (Answer: There is no clear answer yet.)
Here’s the speculation from Reddit user rrizzi7210: “VMware will basically either take your customer to a larger partner, or have them subscribe directly, and require them to license software they don't use or don't need. This is Hock's plan to increase revenue for a few years because he knows how difficult it is to transition to any other platform.”
Another user, elvacatrueno, said that VMware put itself in its current position.
“VMware is in this boat because they did not focus on making money or on things that made them money. There was a reason why they required huge sums of money up front (even in subscription), they were really wasteful with what they did with it (and also chased after ideas that weren't their core consumer use case.)”
Reddit user sotos2004 summed up the matter this way: “VMware under Broadcom is becoming a company that sells you bundles that you don't need and only raise your cost. It’s like they think there are no competitors!!!!”
To be sure, VMware’s rivals have pounced on the opportunity Broadcom is delivering to them on a platter.
“The bell tolls: Broadcom doesn’t care about your baby vSphere deployments anymore,” wrote Eric Mannon, platform architect for BlueVoyant, a cyber defense platform, on LinkedIn. “They are focused on extracting the last bit of profitability from the enterprise contracts they still have. Limited new features and no technical future. vSphere is on life support and will have the plug pulled as soon as it makes the most financial sense to do so.”
As for replacement options, Mannon recommended the following:
Hyper-V, for small deployments only.
Azure Stack, for on-premises data centers.
Nutanix — “Ideal if your long-term goal is 50%+ on-prem,” Mannon wrote.
Roll your own/KVM — “The software is open-source. Finding competent sysadmins is harder,” Mannon said.
“Too fast, too furious. Broadcom has proven it is not messing around when it comes to tearing up its most recent acquisition of VMware,” wrote Jason Van der Schyff, chief operating officer at SoftIron, on LinkedIn.
Of course, Van der Schyff added, “the largest channel partners [will] survive this restructure as will the large global service integrators who own or resell massive swaths of licenses. All of this change seems to be too much, too soon and it begs the question. If I’m a VMware partner or customer, what the hell happens next?”
For SoftIron, the answer is (no surprise), switch to SoftIron.
“[Y]ou’ll be primed to make much more margin and keep your … customers much happier,” Van der Schyff wrote. “You’ll solve their virtualization problem and revamp their on-premises infrastructure.”
Other vendors are hoping to lure VMware partners, too.
Companies are coming out of the woodwork to entice VMware partners to their channel programs.
“Happy to invite VMware VSan partners to our Datacore SanVantage Partner Program,” Ekrem Koç, sales director, BeNeLux and Turkey, at DataCore Software, wrote on LinkedIn. “Enroll in an immediate Silver status partner level and get benefit from a solid strong partnership.
Datacore welcomes you. YOUR DATA our PRIORITY.”
Similarly, Glen Lovit, regional sales manager at Microsoft partner Accuutech, issued a call to action to VMware partners.
“Companies will be searching for a reliable solution and organization to partner with,” Lovit wrote on LinkedIn. “Microsoft’s Azure Stack HCI is a great platform to transition to. And Acuutech, as Microsoft’s top deployment service provider, is ready to make that transition simple, easy and affordable for you.”
And while many people have touted Nutanix as perhaps the best alternative to VMware, the CEO of open-source software developer Apiculus (naturally) disagrees.
“While Nutanix is actively positioning itself as a viable option, huge concerns remain about the potential risks of moving from one vendor to another,” Sunando Bhattacharya wrote on LinkedIn. “There have been rumors of potential acquisition of Nutanix by HPE in the past, and the recent ‘strategic’ partnership with Cisco could also be a precursor to an acquisition. While Nutanix revenues have grown steadily, its high sales and marketing costs have ensured that they have never been profitable. Hence an acquisition by any large IT vendor is imminent and that would also lead to a different path for Nutanix (read higher prices and focus on large enterprise business). Hence, moving from VMware to Nutanix is akin to moving from the frying pan to the fire.”
However, Bhattacharya continued, “there is a compelling alternative that ensures both independence from vendor lock-in and the ability to compete effectively with hyperscalers: adopting an open-source-led strategy for their cloud business. By embracing open-source technologies, cloud service providers can not only eliminate vendor lock-ins but also significantly reduce operating costs, providing them with a competitive edge.”
The name of another open-source vendor — Proxmox — keeps cropping up as another possible way around VMware.
For now, VMware partners are sitting in a holding pattern. How long they, and their customers, can afford to wait on Broadcom is a big issue, wrote Daniel Yee, director of channel sales for Nutanix, on LinkedIn.
Yee added, “Of course VMWare is a great solution but as Dr. Maya Angelou once said … 'When people show you who they are, believe them the first time.’”
As for what’s ahead, Darren Laurie, director cross cloud service provider partnerships at VMware, pointed partners to the company’s Partner Connect Portal for updates.
“Very important our partners review, digest and understand these changes,” Laurie said on LinkedIn.
What will emerge remains anyone’s guess. But some VMware partners may not stick around to find out. Take it from Reddit user moldyjellybean:
“I’d rather go xcp proxmox kvm hyperv than deal with Broadcom. They’ve mapped out their playbooks and how almost every future takeover will look like. If you don’t vote no with your dollars every other company will know they can do this. I know you think the fighting the nickel/dime, subscription model is a losing battle but at some point you need to vote with $ even if it means going to a worse product.”
For now, VMware partners are sitting in a holding pattern. How long they, and their customers, can afford to wait on Broadcom is a big issue, wrote Daniel Yee, director of channel sales for Nutanix, on LinkedIn.
Yee added, “Of course VMWare is a great solution but as Dr. Maya Angelou once said … 'When people show you who they are, believe them the first time.’”
As for what’s ahead, Darren Laurie, director cross cloud service provider partnerships at VMware, pointed partners to the company’s Partner Connect Portal for updates.
“Very important our partners review, digest and understand these changes,” Laurie said on LinkedIn.
What will emerge remains anyone’s guess. But some VMware partners may not stick around to find out. Take it from Reddit user moldyjellybean:
“I’d rather go xcp proxmox kvm hyperv than deal with Broadcom. They’ve mapped out their playbooks and how almost every future takeover will look like. If you don’t vote no with your dollars every other company will know they can do this. I know you think the fighting the nickel/dime, subscription model is a losing battle but at some point you need to vote with $ even if it means going to a worse product.”
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.
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