VMware channel partners, including those in South Africa, are uncertain about future dealings with the company after its new parent company, Broadcom, confirmed its decision to transition the VMware partner programme to its ‘by-invitation-only Broadcom Advantage Partner Programme’.
Following the completion of Broadcom’s $61-billion deal to acquire VMware in November 2023, VMware partners were notified of looming changes due to come into effect from February 2024.
A recent story by Channelfutures.com quoted an email by Broadcom which stated: “We will be transitioning all of VMware’s partner programmes to the by-invitation-only, award-winning Broadcom Advantage Partner Programme.”
The story further added that to secure an invitation, partners must reflect $50 000 per month or a minimum of $500 000 per year in VMware revenue.
This condition is part of several changes envisaged for VMware partners, which Broadcom outlined in a presentation of its new commercial model in December 2023.
The company confirmed the model is subscription only, with no perpetual licencing or software subscription, and an end to the cloud provider commercial model.
The company said it will introduce a new suite of products, new simplified bundles and will focus more on VMware Cloud Foundation, an advanced hybrid cloud platform.
African ramifications
Based on feedback from local service providers, the African market is mostly unaware of the ramifications and have largely disregarded information in the public domain as hearsay.
“This is because no official decisions have been made and no-one actually knows what is going to happen,” says Andrew Cruise, CEO, Routed, which is a VMware Cloud operator and VMware principal partner.
Cruise adds that it is important to realise the termination of partner programmes not only affects resellers or cloud service providers (CSPs), but also distributors and aggregators.
“The distributors are local companies through which resellers purchase their VMware licenses, while the aggregators are the people that cloud service providers report usage to – and they then aggregate that usage up to VMware. In addition, OEMs have been terminated.”
Cruise suggests the implications will be far-reaching and Sub-Saharan channel players are seemingly oblivious to the development. While many businesses have dismissed these developments as merely speculative, he asserts that Broadcom is taking a global approach and will not differentiate emerging and developing markets.
“It is approaching this from an overall spend perspective, based on profitability, and so it’s about size. It’s possible that South Africa ends up without any distributors or aggregators. It seems to be that Broadcom are trying to impose a very simplistic commercial model and a very simplistic operational model on parts of the business that it just doesn’t suit.”
Cruise adds that CSPs will be impacted by a change to their metering from a usage based, post-paid monthly with a minimum spend commitment, to a potentially annual pre-paid, physically core-based metric with a three-year fixed commitment.
“It just doesn’t suit the cloud market,” he says.
Relationship realignment
Mark Walker, Associate VP, South, East and West Africa at IDC Middle East, Africa, and Turkey, says the situation is not a surprise because Broadcom is busy with an overall business rationalisation process, including the incorporation of the VMware product portfolio and optimisation.
“Naturally this will include restructuring its global channel relationships,” Walker says. “I think Broadcom will evaluate the Sub-Saharan client list and based on their installed and future VMware/ Broadcom infrastructure profile, use this opportunity to realign their CSP relationships accordingly.”
Walker adds that it’s possible Broadcom will evaluate the existing CSPs based on their performance over the last 12 months, the client base they service and the technical competence and ability that they have at a minimum. They will also be adjudicated based on financial status.
Walker says the market should expect Broadcom’s invitation or selection process to be completed by mid-April since the current agreements have been terminated by end February.
“Keep in mind that customer contracts signed regionally with VMware will still need to be delivered,” he says.
ITWeb reached out to local VMware representatives for comment but was redirected to Broadcom. At the time of publishing, Broadcom has not responded to the request.
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