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December 5, 2023
Canalys analysts asked how likely partners are to work with VMware following the close of the $61 billion Broadcom purchase.
Slightly less — 26% — say they don’t see any changes affecting them under Broadcom.
Still, a significant-enough percentage of partners report that they will pull back on their VMware sales, post-acquisition. To that point, 17% of Canalys respondents said that while they team with VMware, they plan to do less with the multicloud provider now that it’s in Broadcom’s hands.
That’s not a shock. From the onset of the May 2022 announcement of the deal, a number of channel partners have expressed doubt about the positives of working with a combined Broadcom-VMware. By then, Broadcom had started setting precedents for how it treated its acquirees. With the purchases of CA Technologies and Symantec, for example, Broadcom ended up selling off key assets. Broadcom also made it clear that it would strip down staffing to bare-bones numbers to improve margins.
Even so, another 8% of channel partners polled by Canalys say they actually plan to start selling VMware. There was no elaboration on those intentions.
The remaining 13% does not sell VMware and has no plans to do so.
Between Dec. 4-5, Canalys collected feedback from 383 channel partners from around the world about the impact of Broadcom-VMware on the channel. It titled the results, “What is the channel's view of the opportunity with VMware, now that Broadcom has completed its acquisition?” Partner types polled included SMB, corporate, specialist and online resellers; system integrators; service providers; and distributors.
The poll comes as Broadcom presses ahead with plans to shed VMware employees. So far, more than 2,800 people will lose their jobs starting in January. Those cuts are not limited to one region or division. They’re taking place throughout the United States and other parts of the world.
The layoffs are happening amid other big Broadcom-VMware shifts.
First, Broadcom is moving into VMware’s Palo Alto, California, 1.6-million-square-foot campus. As such, Broadcom will vacate its San Jose buildings.
Second, Broadcom CEO Hock Tan is telling all VMware employees within 60 miles of a Broadcom facility to return to the office.
“Remote work does not exist at Broadcom,” Tan told workers in a recent company meeting, according to the Silicon Valley Business Journal.
How are VMware staff feeling about that? If one poster on TheLayoff.com is any indicator, the answer is — not great.
“They gave us more time to complete the [restricted stock unit] training than they did to return to the office,” the poster wrote. “I have a required Broadcom training regarding my RSUs, and they gave me 13 days to complete it. They gave three days to return to the office.”
According to reports, Carbon Black now operates as an autonomous unit with Broadcom. VMware had placed the vendor inside of its networking and security group. Broadcom, however, has decided to make Carbon Black independent from VMware, per SDxCentral.
That move resolves, at least for now, some questions around Broadcom’s intent for Carbon Black. Observers have speculated that the chipmaker might spin off or sell the company altogether.
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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