Broadcom Makes Concessions for Upset VMware Cloud Partners

Broadcom is pulling back on some of its more controversial new requirements and deadlines. Meanwhile, we’re looking into reports that Broadcom has booted AWS from the VMware Cloud Service Provider Program.

Kelly Teal, Contributing Editor

May 1, 2024

4 Min Read
VMware cloud partners get concessions

Broadcom seems to be making more concessions for VMware cloud service providers upset by all the changes enacted since the close of the $61 billion deal.

And some newly unveiled policies appear aimed at appeasing members of CISPE, the European trade group of cloud providers that has been very vocal about asking regulators to investigate Broadcom’s handling of VMware.

A Little History

In mid-April, Broadcom CEO Hock Tan set out to address partners’ and customers’ questions and concerns about the VMware cloud partner program upheaval, “head on.” As part of that, he outlined some pending shifts around requirements for VMware Cloud Service Provider partners.

CISPE, notably, pushed back on Tan’s assertions, saying that “Broadcom’s response to market outrage solves nothing.”

The association’s statement also happened to come as reports circulated that European antitrust authorities have pressed Broadcom for more information about its recent moves.

Now there’s more insight into Broadcom’s stance around VMware cloud service provider partners, and how they’ll navigate new tiers and ways of selling and provisioning.

Changes to the Registered Tier

On April 30, Ahmar Mohammad, vice president of partners, managed services and solutions sales, provided some details that expound on Tan’s previous missive.

Related:CISPE and Broadcom: VMware Tussle Continues as EU Sends Info Request

VMware's Ahmar Mohammad

First, Broadcom is expanding access to the VMware cloud service provider Premier tier. While all existing members of this level will keep that status, existing and qualified Registered partners are included now, too.

Broadcom told Channel Futures that all three tiers -- Pinnacle, Premier and Registered -- remain intact. Registered is the level for partners who can't meet Premier criteria; they sell through the white-label program.

Meanwhile, Broadcom says it will consider special exception requests from partners who aren’t yet signed up with the program “and that may have unique regulatory constraints or country-specific sovereign data requirements (example: European Economic Area and United Kingdom),” as Mohammad explained.

That’s one of the apparent concessions to CISPE. (Channel Futures reached out to CISPE for comment but the time-zone disparity interfered with the group’s ability to reply right away.)

Eliminating the Brouhaha Around White-Labeling VMware Cloud Services?

The next concession concerns white-label partners. Recall that in March, Broadcom created a new partner category (not a tier) called Cloud Commerce Manager. Cloud Commerce Managers, in Broadcom’s terms, are service providers to the company, handling all order processes, including submissions and monthly billing for VCSP Pinnacle and Premier partners. They also “facilitate the adoption and management of VCF for VCSP Premier partners” — meaning that they offer technical and sales support, as Mohammad noted at the time.

Related:CEO Hock Tan Addresses Broadcom-VMware Questions ‘Head On’

Cloud Commerce Managers would not, however, be able to offer white-label services, one of the rules that frustrated CISPE members.

Broadcom seems to have reversed course. On Monday, Mohammad said the following: “Broadcom is responding to partner feedback by allowing Cloud Commerce Managers to offer white-label services, providing more flexibility and choice to VCSP Registered Tier partners.”

Extended Deadlines for VMware Cloud Partners

On that note, acknowledging that there are Registered partners and former VMware Cloud Provider partners who still don’t know whether they want to work with Broadcom, Mohammad said the company is extending the deadline to decide. These partners have until May 31 to either apply for a special exception, sign with a white-label provider or tell Broadcom they are leaving.

May 31 only marks the date “for a partner to make an election as to which of these options it will be taking,” Mohammad said. “Each of the options provides additional time beyond May 31, 2024, to implement new program conditions.”

Finally, partners who do leave (and many are not doing so of their own volition) may continue serving their existing VMware cloud customers for another year — at least, as long as they’re signed up as a Registered partner. That gives them some relief from the previous looming deadline that would have forced these partners to immediately shut down their VMware cloud services or resell white-label versions.

“These partners will continue to be billed by Broadcom and will continue to leverage Broadcom global support,” Mohammad said.

On the whole, Mohammad alluded to the “constant” change that VMware cloud partners have endured since Broadcom took control of the multicloud provider.

“We are,” he said, “working closely with our partners and customers through this time of business transformation.”

Speaking of transformation, Channel Futures looked into reports that Broadcom has booted Amazon Web Services, the world’s largest hyperscaler, from the VMware Cloud Service Provider Program. A source close to the matter has confirmed that AWS was never a VSCP partner at all and said the VMware by AWS service remains. The company is otherwise not commenting on why reports of an AWS-VMware by Broadcom breakup are hitting the interwebs. An AWS spokesperson also said the company is not commenting on the speculation around its VMware cloud partner status.

Perhaps coincidentally or not, Broadcom last month made a big splash with the announcement that it’s optimizing VMware workloads for Google Cloud, the world’s third-largest hyperscaler. At the same time, Google Cloud is supporting VMware Cloud Foundation portability.

About the Author(s)

Kelly Teal

Contributing Editor, Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.

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