VMware by Broadcom Revamps VCSP, Adds Option for Small Cloud Providers
As one trade group calls for regulatory action, Broadcom has laid out tiers and programs for VMware cloud service providers.
![VMware by Broadcom VCSP revamp VMware by Broadcom VCSP revamp](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/bltc919683f88a6a5b5/6523fc937c71d365c01f2a7b/Revamp.jpg?width=700&auto=webp&quality=80&disable=upscale)
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Between the removal of certain VMware products, the forced bundling of the remainder, taking the top 2,000 VMware buyers direct, and the required move to subscription-only consumption — which, for many customers, comes with a higher price tag than before — VMware-reliant European cloud and services providers are in trouble, CISPE said on March 19.
As such, without government intervention, several CISPE members expect “they will quickly go bankrupt and out of business” if they lose the ability to license and use VMware products.
If that were to happen, end users including national companies, public sector organizations, small and medium enterprises and startups also would not “be able to deliver some or all of their online services if this licensing issue is not resolved,” CISPE said. “In some cases, these include vital medical services. Ultimately, citizens will be deprived of everyday, cost-effective cloud services and Europe’s digital ambitions will be severely damaged.”
CISPE’s concerns come after Broadcom terminated the VMware partner programs after closing the $61 billion acquisition.
Indeed, the company provided little notice to resellers, cloud providers and managed service providers, leaving many in turmoil over the 2023 holiday season. By Feb. 5, resellers had more insight, while cloud partners had to wait until for resolution or more details into their VMware by Broadcom fates.
In the intervening months, CISPE, for its part, has reported negative impacts on its members and their customers. In some cases, VMware by Broadcom licensing costs have increased 1,200%, the group said.
“Broadcom is holding the sector to ransom by leveraging VMware’s dominance of the virtualization sector to enforce unfair license terms and extract unfair rents from European cloud customers,” said Francisco Mingorance, secretary general of CISPE, adding, “As well as inflicting financial damage on the European digital economy, these actions will decimate Europe’s independent cloud infrastructure sector and further reduce the diversity of choice for customers. Dominant software providers, in any sector from productivity software to virtualization, must not be allowed to wield life or death power over Europe’s digital ecosystems.”
Since buying VMware, Broadcom has stated that it intends to make VMware Cloud Foundation the linchpin in its VMware by Broadcom portfolio. The private cloud platform will “accelerate innovation, enhance customer value, and optimize profitability and market opportunities for our partners,” as Mohammad reiterated in the March 21 blog.
With that, VMware by Broadcom publicly announced changes, previewed by other outlets earlier in the week, to VSCP.
The initiative essentially features two ways for cloud providers to participate: either directly or through a peer. The latter option, a white-label approach, applies to smaller partners.
“Recognizing that not all existing VMware Cloud Providers will be able to meet the criteria of the new program, we have evolved the white-label model whereby a VCSP Pinnacle or Premier partner can deliver VMware Cloud Foundation entitlements to another VMware Cloud Service Provider in a non-branded manner, enabling the secondary VCSP partner to brand and deliver the service to their customers on their pre-existing hardware,” Mohammad said in a lengthy explanation.
In other words, partners who don’t meet Broadcom’s new criteria for the VSCP program will have to consume VMware cloud products through a qualified peer.
“Former VMware Partner Connect partners interested in learning more about the white-label option can review the VCSP program flyer and white-label program FAQ inside the Partner Connect portal,” Mohammad added.
While the timing of the VMware by Broadcom white-label debut and VCSP relaunch comes amid the pressured exerted by CISPE and the specter of European regulatory action, a company spokesperson tells Channel Futures it’s really the result of fast-moving reexamination.
“Our work in redefining the VMware Cloud Service Provider program has been an ongoing effort since we started the business transformation of VMware starting in December 2023,” the spokesperson said. “It's the culmination of months of work and we're excited to share this next phase of the program with our VCSP partners. We're looking forward to working with them together to make VMware Cloud Foundation the best platform for app innovation and private cloud modernization, delivered as a fully managed service.”
Meanwhile, whether CISPE members will push back on the new VMware by Broadcom VCSP terms remains unclear.
“It is too early to say,” Ben Maynard, CISPE spokesperson, told Channel Futures on March 21.
“Our members have not seen any terms either to provide the white-label service or to consume it. Really, it's too close to the deadline to allow any proper consideration. What's needed is a long pause and significant new consultation to find a more acceptable way forward.”
VCSP now features three tiers and the so-called Cloud Commerce Manager.
Pinnacle partners will rank as the highest in the Broadcom Advantage Partner program.
“Pinnacle partners are our most invested and strategic partners, boasting extensive certifications, a track record of significant sales and service achievements, and broad international coverage,” Mohammad said. “Holding pinnacle status signifies a partner's deep technological knowledge and proficiency in addressing the most intricate customer issues.”
Because of that, for the first time, “Broadcom will be co-selling with our VCSP pinnacle partners to our corporate customer base,” Mohammad further explained. “We are aligning our sales team with partners’ sales teams to drive go-to-market execution and help build business for the pinnacle tier.”
Next comes the premier level. These partners have “highly developed” VMware practices and high customer satisfaction, Mohammad said. They tend to specialize in specific geographic regions.
The registered tier follows premier. These partners are cloud service providers “who have achieved the minimum requirements for the Broadcom Advantage Partner Program and work through either pinnacle or premier partners to access VCF cloud solutions for their existing and future customer base,” Mohammad said.
Finally, Broadcom introduced cloud commerce managers. These are service providers to Broadcom and they “play two critical roles for VCSPs,” per Mohammad. They handle 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.
Along the way, all VCSP partners will deliver managed services based on the same VMware Cloud Foundation software customers use on-premises, Mohammad said.
“No more different versions of VCF for different environments. This is crucial to helping customers achieve a true hybrid cloud experience," he said.
On top of that, all services from VCSP partners will be based on a per-core subscription license.
“As a result, customers can expect the same consistent hybrid cloud experience from a solution standpoint, and partners will compete and differentiate based on the value-added services they bring to customers,” Mohammad explained.
VCF also will have license portability so customers may move their VCF subscriptions between on-premises and VCSP environments, and vice versa, VMware by Broadcom said.
“This will enable partners to help customers interested in shifting from a self-managed to an outsourced managed services model,” as Mohammad noted.
The VMware by Broadcom changes means that, like the reseller version of Broadcom Advantage, VCSP will indeed have fewer partners than before.
“Reducing the overall size of the VCSP program will ensure we have the right partners who are capable of delivering consistent VMware Cloud Foundation-based services to customers worldwide,” Mohammad said. “This change will also give VCSP partners more chances to pursue opportunities for VMware Cloud Foundation in the regions they are authorized to serve.”
Overall, Mohammad concluded, the changes will benefit cloud service providers and their customers alike.
“The new Advantage Partner Program for VCSP partners is designed to build stronger relationships with our most valued partners, recognize them for their commitment to Broadcom, and provide them with the capabilities to grow their businesses through simplified pricing, improved margins and richer benefits,” he wrote. “Our VCSP partners will help customers achieve maximum value in less time while accelerating their transition to the cloud.”
Companies throughout the channel are touting their inclusion in the new VCSP initiative.
“We empathize with existing VMware partners who are unsure how to proceed post-acquisition, and as one of the few vendors selected by Broadcom to be a Premier VMware Cloud Service Provider, we would like to provide these partners with a softer landing,” said Christian Teeft, chief technology officer of Evolve IP, in a recent press release.
Iowa-based IT service provider Involta made a similar proclamation for end users.
“The transition in the VMware ecosystem presents a unique set of challenges for enterprises,” wrote Josh Holst, vice president of cloud services, in a March 14 blog. “Many organizations find themselves at a crossroads, needing to reassess their cloud strategies and partnerships while maintaining the continuity, security and efficiency of their cloud operations amidst these shifts. This is where Involta’s private cloud emerges as a beacon of stability and innovation.”
VMware by Broadcom further touted positive feedback from VCSP pinnacle partners as evidence that its changes bode well for the channel and customers.
Expedient, for example, said its Pinnacle designation now positions it “as a preeminent full-stack cloud service provider, harnessing the power of VMware Cloud Foundation and its add-ons to deliver a tailored infrastructure experience across our 15 data centers and cloud availability zones.”
That was the word from Jon Rosenson, president and chief operating officer of the Pittsburgh-headquartered data center company.
ThinkOn said via its chief strategy officer, Dan Timko, that as a new pinnacle member, it will “empower partners to thrive within Broadcom's vision and are excited to continue this path of success together.”
Each of the four companies sells through the channel and likely will serve as options for partners needing to go the VCSP white-label route.
Companies throughout the channel are touting their inclusion in the new VCSP initiative.
“We empathize with existing VMware partners who are unsure how to proceed post-acquisition, and as one of the few vendors selected by Broadcom to be a Premier VMware Cloud Service Provider, we would like to provide these partners with a softer landing,” said Christian Teeft, chief technology officer of Evolve IP, in a recent press release.
Iowa-based IT service provider Involta made a similar proclamation for end users.
“The transition in the VMware ecosystem presents a unique set of challenges for enterprises,” wrote Josh Holst, vice president of cloud services, in a March 14 blog. “Many organizations find themselves at a crossroads, needing to reassess their cloud strategies and partnerships while maintaining the continuity, security and efficiency of their cloud operations amidst these shifts. This is where Involta’s private cloud emerges as a beacon of stability and innovation.”
VMware by Broadcom further touted positive feedback from VCSP pinnacle partners as evidence that its changes bode well for the channel and customers.
Expedient, for example, said its Pinnacle designation now positions it “as a preeminent full-stack cloud service provider, harnessing the power of VMware Cloud Foundation and its add-ons to deliver a tailored infrastructure experience across our 15 data centers and cloud availability zones.”
That was the word from Jon Rosenson, president and chief operating officer of the Pittsburgh-headquartered data center company.
ThinkOn said via its chief strategy officer, Dan Timko, that as a new pinnacle member, it will “empower partners to thrive within Broadcom's vision and are excited to continue this path of success together.”
Each of the four companies sells through the channel and likely will serve as options for partners needing to go the VCSP white-label route.
VMware by Broadcom’s cloud computing ambitions might soon come under scrutiny from European regulators.
And, perhaps in no coincidental move, VMware by Broadcom just announced significant changes for cloud providers. Some of those could come as welcome news for the partners who initially looked poised for exclusion from the new version of the VMware Cloud Service Provider program, slated to end next month.
Recall that Broadcom has enacted an invitation-only approach to its Advantage channel initiative. Resellers already received their notices but many cloud providers have remained in limbo, even as rumors swirled that they would have to license at least 3,500 cores to keep their standing as VMware partners.
On March 21, VMware by Broadcom delivered some insight.
“[W]e’ve completely redefined and are relaunching our VMware Cloud Service Provider program with new tiers and new benefits,” the company wrote in a blog carrying the byline of Ahmar Mohammad, vice president, partners, managed services and solutions go to market.
![VMware's Ahmar Mohammad VMware's Ahmar Mohammad](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/blt52573f8f0f45a96e/65fc9e2cf5bd5d040a9d0e6b/Mohammad_Ahmar_VMware_2024.jpg?width=700&auto=webp&quality=80&disable=upscale)
VMware's Ahmar Mohammad
The missive comes two days after the trade group, Cloud Infrastructure Service Providers of Europe, asked authorities for help controlling the pricing and business model changes Broadcom has pushed onto VMware.
In the slideshow above, we explore the changes VMware cloud service provider partners need to know, as well as reactions from CISPE and channel players included in the new initiative.
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