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Dell has just terminated its deal with VMware
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Smaller cloud vendors are going after VMware's customers with aggressive tactics
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Larger resellers are being invited back to a Broadcom partner program
Broadcom’s remaking of cloud software firm VMware after its $61 billion acquisition of the company has been one of the most drastic we’ve yet seen in an era where mass lay-offs are commonplace.
Broadcom has already laid off more than 2,800 VMware employees worldwide, with more cuts expected. VMware by Broadcom also ended the firm’s perpetual licensing agreements and won’t offer many products as standalone options any more.
The Broadcom changes are starting to bring big modifications in VMware's distributor deals as well. Dell has just terminated its distribution deal with VMware, citing the acquisition by Broadcom.
So, Silverlinings reached out again to our ex-VMware source, who we can now name as Michael Leonard, who was a senior product marketing manager for SD-WAN/SASE at VMware for five years, for more on the ongoing situation at his former company to see if he had any further insight.
Certainly we can’t get any comment from Broadcom on the VMware situation!
Sharks in the water
Leonard said that cloud competitors are trying to make good on the worries about VMware’s changed offerings. “I’m just seeing a lot of activity from various competitors...and they’re offering takeout packages...they’ll say something like: ‘Show me your VMware license and I’ll give you a discount on buying our product,’” he claimed.
Leonard said that Nutanix, Scale Computing and Verge.io are doing this on the virtualization and converged infrastructure side of VMware’s business. Cato and Netskope are stepping up with aggressive marketing campaigns on the SASE side, he noted.
Indeed, the staff at Silverlinings has seen some of what Leonard is talking about in the form of story pitches from aspiring VMware competitors like Leostream, which plays in the remote desktop space. Last week, Leostream unveiled an update to its platform specifically targeting vSphere-based hybrid cloud environments.
However, Leonard said that major vendors like Cisco, Fortinet and Palo Alto haven’t noticeably entered the fray yet. “They don’t have to do much because they’re already well known,” he said.
So, it's mainly pygmy sharks going after scraps from the big catch right now.
Remember, though, that any transitions away from VMware could take time, money and pain from the poor cloud customer. Analysts have previously told us it could take 24 to 48 months to fully migrate from VMware.
Reseller rumble
After all the trouble about VMware partners that Broadcom’s position after the acquisition caused — basically, if you weren’t reselling at least $500,000 worth of product a year Broadcom wasn’t interested — the company is now opening up to big resellers again.
“The big distributors like Ingram Micro, they’ll be in there,” Leonard said.
“I’ve heard from a couple of partners that they were invited to apply for the new [Broadcom] program. So, I imagine we’ll be seeing some news of partners going into Broadcom’s book,” he concluded.
Although, as the Dell news indicates, some big partners are backing out of deals with VMware by Broadcom.