Mergers are always a delicate and unpredictable matter in the fast-paced tech industry. As companies race to the top, many deals lead to rough conclusions. For many people, the VMware and Broadcom deal was exactly that. Dell Technologies is the latest company to sever its contract with VMware following this dramatic close. In this blog article, we go over some of the facts about the VMware and Broadcom acquisition, the concerns that most customers and industry leaders have, and how Dell Technologies has recently terminated its deal with VMware after the controversial merger.
The Broadcom VMware Acquisition
In May of 2022, global semiconductor and infrastructure giant Broadcom announced its plan to buy VMware. After lengthy delays and regulatory restrictions, Broadcom finally announced its purchase of the software company in November 2023. The US$ 69 billion deal is the largest of its kind and certainly raised more than a few eyebrows from concerned VMware customers and employees. The main worries circled job safety and price stability after the deal was done.
However, these concerns soon became much more tangible when Broadcom began moving to rapidly drive revenue growth. The Worker Adjustment and Retraining Notification (WARN) notices filed across multiple states in the US show that Broadcom already fired over 2000 VMware employees almost a week after the deal.
VMWare’s Perpetual License
One of the other main initiatives taken to increase revenue margins was the termination of perpetual licenses for subscription-based licenses for all VMware products. With the company’s reputation for high licensing costs - also known as the "vTax, Sangfor discussed in a previous article the ways in which the move “raised concerns among VMware customers that it could lead to higher prices, fewer customers, discontinued products, and less innovation.”
However, this was only the beginning of the software company’s troubles as its standing partnership with Dell Technologies ended soon after.
Dell Technologies Ends Agreement with Broadcom
On the 25th of January 2024, Dell Technologies filed an SEC notice to say that the company was officially ending its distribution agreement with VMware. In the filing, Dell announced that it had delivered to Broadcom the written notice of termination of the Commercial Framework Agreement that was initiated in November 2021. Dell noted that according to the contract signed, either party could end the agreement within 60 days of new ownership – or “Change of Control” – which is what happened in the VMware acquisition.
The canceled Dell VMware agreement set a framework for several commercial activities and collaborations between the two parties. The contract also called for continued partnership on several VMware products – including the VxRail Hyper-Converged Infrastructure (HCI) platform, VMware Cloud on Dell EMC, VeloCloud SD-WAN, and more.
Broadcom CEO, Hock Tan, noted that the new vision for VMware would have a much larger target market. Tan stated to investors that Broadcom would be “refocusing VMware on its core business of creating private and hybrid cloud environments among large enterprises globally and divesting non-core assets.” The divestments already made include VMware’s Carbon Black cybersecurity platform and the End-User Computing (EUC) system. However, Tan has promised to “find good homes'' for the assets with other interested parties.
VMware also announced the end of several other standalone products such as its Software-as-a-Service iteration of its Aria multi-cloud management platform and dozens of its vSphere, VCF, vCenter, and NSX products. However, the main gripe most partners have with the direction of VMware now is the lack of accessibility it seems to be heading towards. This can be seen in Broadcom’s announcement of its Advantage Partner Program.
The Broadcom Advantage Partner Program
Broadcom also announced its Advantage Partner Program set to launch on the 5th of February 2024. In a FAQ notice, Broadcom peddled the invite-only initiative as a way to help partners “achieve even greater opportunities for profitability through simplified offerings and more opportunities for service revenues.”
However, according to The Register, many Cloud Service Provider partners were told that their programs would be terminated by the end of April. In a letter seen by the publication, Broadcom stated:
"Effective April 30, 2024, the ability to transact as a VMware Cloud Services Provider, under the VMware Partner Connect Program, will come to an end. However, we want to emphasize that you may have the opportunity to join the Broadcom Expert Advantage Partner Program. This invite-only program has simpler requirements and offers expanded benefits, and we will begin inviting partners to join in early 2024."
This move has been a shock for many smaller VMware providers and distributors as concerns have risen that only the bigger and more lucrative partners would be invited back into the new partnership program. This has caused mass uncertainty in the industry with many stating that the exclusive program only shows that the company does not care about smaller users and distributors.
While the actions taken by the company can be seen as reasonable from a fiscal point of view, Broadcom also risks alienating a large portion of VMware users and providers by limiting the market. The move can also hinder collaboration and innovation across the industry and will have far-reaching consequences for smaller companies that rely on VMware technology.
With so much doubt, scrutiny, and uncertainty, Many VMware customers will find themselves in a lurch about their cloud-based services. However, this shift in the industry landscape might be an opportunity for a lot of users as well. Fortunately, cloud computing markets are rife with options that can help customers succeed. Sangfor Technologies has been a global name in cloud computing and cybersecurity for many years and prides itself on its ability to provide the best cloud-based platforms and tools for every type of business, user, or partner – regardless of their size or bottom line.
Forget Uncertainty. Choose Sangfor’s Hyper-Converged Infrastructure Today!
Sangfor’s Hyper-Converged Infrastructure (HCI) is a much more affordable, secure, and simplified solution when compared to VMware virtualization. The unified, 3rd-gen cloud computing architecture effectively reduces 70% of the TCO and seamlessly converges computing, storage, networking, and security on a single software stack. Sangfor’s Hyper-Converged Infrastructure is also more localized and easier to manage and maintain – especially for smaller businesses.
Sangfor can easily replace VMware infrastructure with like-for-like components
The Sangfor HCI platform also ensures superior performance with a 3-node all-flash cluster that can easily reach 1 million IOPs – which is much higher than VMware vSAN with the same hardware configuration. Sangfor also offers a smooth transition from VMware that helps you avoid disruptive and complex installation and fuss. However, Sangfor also goes the extra mile for its partners as well.
The Sangfor Partner Program:
The Sangfor Partner program is an inclusive, supportive, and reliable initiative that ensures that we provide the best IT solutions and services, with the best support, at the lowest cost, to our global customers. While Sangfor partners rely on our products and services, Sangfor also relies on our partners for their on-the-ground experience, industry expertise, and unique capabilities. We understand that our job is not complete without yours. The relationship fostered by Sangfor with its partners is meant to encourage innovative ideas, global collaboration, and constructive insight.
Some of the benefits of becoming a Sangfor Partner:
- Partner Level Conversion: VMware Partners will become Sangfor partners at an equivalent level and enjoy the relevant discounts and other privileges
- Dedicated Account Manager and Project Account Protection
- Dedicated Marketing Developing Fund
- Free Cloud Certifications
- Additional discounts on software licenses
- Free OJT technical support for projects in the beginning
- and many more.
For stability that doesn’t compromise on quality, look no further than Sangfor and elevate your business, lifestyle, and partnership options. Join a driven and welcoming family and be part of the cyber revolution that creates new opportunities and sparks growth. Become a Sangfor partner and make a real difference for your customers today.
While the technological landscape can be cut-throat at the best of times, it’s always important to see the needs of your customers before anything else. As many clients find themselves in a state of uncertainty after the Broadcom acquisition of VMware and all the subsequent changes that were made, Sangfor offers a simpler and more stable alternative that will ensure affordable, dependable, and high-performance platforms that work for your needs. Contact Sangfor today for any queries or visit www.sangfor.com for more information.
