Broadcom clarifies VMware’s channel offering

Following Broadcom CEO Hock Tan’s announcement of simplifying VMware’s go-to-market approach and modernising its product offerings, Broadcom plans to enable customers and partners to be laser-focused on deploying its private cloud solution.

In a blog post, Broadcom VP of global partner and commercial sales Cindy Lloyd said it was important to engage, collaborate and clarify what Broadcom was offering with VMware customers and partners regularly and highlight the progress the semiconductor and infrastructure company has made to strengthen its network of distributors and resellers.

“Since Broadcom completed its acquisition of VMware, we have continued VMware’s plan to complete the transition to a subscription-based business, aligning with market trends towards cloud operating models,” she said. “We also have modernised and simplified our product offerings, going from roughly 8,000 disparate and confusing SKUs into four core offerings.”

According to Lloyd, Broadcom planned to offer customers flexibility and choice with respect to subscription length, with contract durations structured in ways that align with customers’ needs, whether they purchase directly from Broadcom or through channel partners.

“We’re taking that approach to flexibility with subscription payments,” she said. “We’ve ended VMware’s requirement for up-front payments, offering an annual pay-as-you-go model instead.”

Broadcom also plans to structure payments as its products are deployed, much like the way it structures its contracts.

“Our subscription model also offers us the most effective way to charge our customers based on the value we create for them through the use of their product offerings,” she said.

These and other changes we have previously highlighted will enable enterprises and organisations to optimise their IT investments according to their unique business transformation journeys.”

Lloyd said that resellers can sell Broadcom’s four VMWare solution offerings to end-customers.

Additionally, this strategy created a better model for distributors and resellers because, according to the blog post from Lloyd:

• “Distributors for VMware solutions would not generally qualify as resellers and so will eliminate conflicts of interest and result in distributors focusing on enabling their reseller community to serve end-customers.
• “Distributors and resellers operate in a net margin model where all discounts are delivered up front, at the point of sale, providing more transparency to partners with what they make on every deal across both new and renewal business.
• “Broadcom has introduced route-to-market parity across all partner types and discounts, so no one route or partner is able to benefit from unfair advantages vis-à-vis other partners.
• “Broadcom has introduced a distribution partner-delivered technical support model for our VMware customers in certain markets and segments globally. Effective since [3 June], distribution partners now provide technical support for those customers in their preferred language and time zone and we’ve further enhanced the customer experience through accessibility, specialised knowledge, tailor-made solutions, personalised assistance and training programs. Partners can differentiate themselves and create closer relationships with customers through their extensive knowledge of Broadcom solutions, in-region expertise and ability to deliver value-added services.”

Lloyd also said that Broadcom’s IT and sales operations teams completed the migration and transformation from VMware’s complex and cumbersome resource planning systems to Broadcom’s more automated system.

“Our teams have gone through the process of cleansing and migrating critical data from multiple legacy systems to a single unified Broadcom system,” she said. “Doing this work hasn’t been easy and has delayed quotations over the past few weeks.”

She said that Broadcom was confident that VMWare would be “back to normal” by the end of June.

“Broadcom’s goals through this transition period are to simplify VMware’s tools and systems, streamline processes and introduce automation and self-service capabilities to make it easier to do business with us,” Lloyd said.

Through the Advantage Program, Broadcom has significantly reduced channel conflict, streamlined systems and tools and increased resourcing and support to make it easy and profitable for partners to invest with the vendor, Lloyd claimed.

Broadcom officially closed its US$61 billion acquisition of VMware on 22 November. At the time, a few key announcements made their way through, including the resignation of VMware CEO Raghu Raghuram and taking up a “strategic advisory” role to Broadcom CEO Hock Tan.  

Marc Beder, general manager of Asia Pacific at 11:11 Systems told ARN there were elements of frustration, disappointment and, in some cases, anger regarding the deal, with mixed reactions ranging from being annoyed by it to accepting the increase and moving on.

“There were those that immediately looked for alternatives. To me, that was more of a knee-jerk reaction. To switch a platform that you’ve been running on for potentially a couple of decades based on a cost increase that you don’t like is a knee-jerk reaction,” said Beder. “Now, for some, it’s right, and that’s okay, but it isn’t right for everyone. When you’ve got an ecosystem of your engineers, your history, your skillset and perhaps other integrations, suddenly changing that ecosystem overnight is not realistic.”

At the time of publication, Broadcom did not respond to ARN about any local changes to VMware’s channel.