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VMware is shaking up its reseller structure following the Broadcom acquisition
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VMware's partners are "upset" at the changes, an analyst told us
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Some VMware customers are examining other cloud options
Analyst Zeus Kerravala has been talking to Silverlinings about the latest twists in the VMware saga, following its $61 billion acquisition by chip designer Broadcom at the end of 2023.
Particularly the report that Broadcom is canceling VMware partner agreements and asking resellers to re-apply for partner status by February 2024.
Resellers making less than $500,000 in annual revenues for VMware are not expected to qualify for VMware by Broadcom partner status.
Zeus Kerravala, principal analyst at ZK Research told us that he has spoken to a number of VMware resellers and that they are “more than upset” at the latest demands on VMware partners.
“Having to re-qualify brings new rules, procedure and throws away much of the goodness the resellers had with VMware in the past,” Kerravala wrote in an email.
“VMware will want to keep those 20% that drive most of the business and let the others go,” The analyst said. “The VMware partner ecosystem is huge and this can be quite disruptive.”
Customer confusion and options
Obviously, some of VMware’s software customers are concerned about this shift in VMware’s practices as much of their embedded VMware gear could require years of work to move away from. “The fact is, VMware is a legacy company,” Kerravala noted, adding that lock-in is a challenge that many customers could face.
“Other than its SASE and 5G portfolio, the company hasn't really done anything innovative for years. Customers use VMware for server virtualization because they do feel locked in,” the analyst said.
Kerravala told us that some VMware customers are examining other cloud software options like Proxmox and Microsoft’s Azure Hyper-V platform to replace VMware software. “Those are the obvious ones, Nutanix is an underrated option as well,” the analyst wrote.
“[Another] viable option customers should look at is removing the hypervisor layer all together and running on baremetal or containerizing their software,” Kerravala concluded.