Broadcom’s Acquisition Of VMware: A New Dawn For Managed Service Providers

In the rapidly evolving tech landscape, Broadcom’s acquisition of VMware stands out as a landmark event, signaling significant changes for Managed Service Providers (MSPs) across the globe. This strategic move not only reshapes the existing virtualization and cloud computing markets, but also sets a new course for smaller MSPs navigating these changes. The acquisition underscores a deliberate strategy by Broadcom to deepen its penetration into enterprise software solutions, leveraging VMware’s stronghold in virtualization and cloud services. As the industry adjusts to this new reality, understanding the ramifications and opportunities arising from this acquisition becomes paramount for MSPs.

Strategic Implications of the Acquisition

Broadcom’s decision to acquire VMware marks a calculated step towards enhancing its presence in the competitive enterprise software domain. VMware, with its robust portfolio in virtualization and cloud computing, represents a critical asset for Broadcom, promising to unlock synergies between Broadcom’s semiconductor prowess and VMware’s software capabilities. This union is poised to foster innovation and expansion, potentially altering the landscape of technology solutions and services.

Navigating Licensing and Pricing Transformations

A pivotal aspect of the acquisition is the shift in VMware’s licensing model under Broadcom’s stewardship. Moving away from the previously complex, points-based Partner Connect program, Broadcom introduced a streamlined licensing approach through its VMware White Label Program. This new model simplifies licensing to a single SKU – the VMware Cloud Foundation (VCF) – marking a significant departure from the cafeteria-style options previously available.

Furthermore, the pricing structure is shifting from a multifaceted calculation method to a more straightforward, SKU-based pricing model. This simplification aims to make the licensing process more accessible and manageable for MSPs, reducing complexity in how services are priced and consumed.

Navigating The New VMware Landscape Post-Broadcom Acquisition

The recent acquisition of VMware by Broadcom is transforming the cloud computing landscape, sparking widespread debate and concern. This strategic shift is sending tremors across the industry, marking a significant transition not just for VMware, but also for its extensive network of over 10,000 Managed Service Providers (MSPs) and resellers, now narrowed down to a select 500. This dramatic consolidation puts many longstanding VMware partners in a precarious position, as they face the daunting prospect of navigating uncharted territories without clear guidance. Despite the initial turbulence, a deeper analysis reveals a landscape rife with new possibilities and avenues for adaptation and growth.

Redefining Partnerships in the VMware Ecosystem

Broadcom’s overhaul of VMware’s partnership model marks a pivotal departure from traditional practices, fundamentally altering the landscape of collaboration and service provision within the cloud computing industry. This strategic shift is set to draw a clear line between entities that can adapt to the new dynamics and those at risk of marginalization. With a significantly pruned list of partners offering enhanced services, securing necessary support is becoming even more challenging for enterprises. As VMware pivots towards more direct interactions with its clients, former allies and competitors accustomed to the previous model may find it challenging to secure their place in the evolved ecosystem.

The amendments to the VMware Cloud Connect Partner Program, effective May 2024, promise to reshape the market through several critical changes:

  • Transitioning to a subscription-based licensing model from the traditional perpetual licenses.
  • Shifting from RAM-based to CPU core-based pricing, altering cost structures.
  • Introducing a constrained selection of new product bundles, potentially complicating service offerings.
  • Encouraging the search for alternative licensing and service providers as the pool of VMware partners narrows.

These adjustments are not merely operational; they signal a significant shift in strategy that could redefine market participation and competitive dynamics moving forward.

Navigating the New VMware Landscape: Challenges and Opportunities for Businesses

The acquisition of VMware by Broadcom poses significant challenges for VMware’s competitors and the 10,000+ partners not selected to advance in their premier partnership tier. This development triggers a multifaceted ripple effect across the cloud computing industry:

  • Market Reorganization: The new partnership tier structure potentially leaves many MSPs and resellers without their former benefits, compelling them to reassess their strategies.
  • Competitive Dynamics: With VMware under Broadcom, competitors face a more unified and potentially formidable competitor in cloud and virtualization arenas.
  • Innovation and Adaptation: Organizations slow to innovate or adjust may struggle to stay relevant within a swiftly changing market.

For businesses leveraging VMware, the pivotal changes arriving in May 2024 could disrupt their cloud strategies and operational dynamics, possibly leading to increased costs. The inability of many Managed Service Providers (MSPs) and Cloud Service Providers (CSPs) to continue reselling or supporting VMware post-May implies potential disruptions and migrations to alternative platforms, alongside the challenge of adapting to a new licensing model and cost structure.

However, this transition also presents opportunities to modernize cloud infrastructure and uncover cost-effective solutions. Choosing a trusted cloud and security advisor, particularly from among the premier VMware Cloud Service Provider Partners, is crucial for navigating these changes. Such a partner can offer:

  • Seamless Migration: Assistance in moving to an optimal cloud solution, whether that’s a secure private, public, or hybrid cloud.
  • Expert VMware Support: Continuous, professional support to ensure existing VMware environments remain efficient and applications optimized.
  • Cost-Saving Optimization: A cloud-agnostic approach to finding the most efficient solutions for an organization’s specific needs.

Despite the challenges of VMware’s strategic shift, avenues for successful navigation exist:

  • Form Strategic Alliances: New or strengthened alliances, especially with major Broadcom program participants, can open new opportunities for white labeling services from the premier VMware partners.
  • Diversify Offerings: Exploring alternative revenue streams, such as OpenStack or Nutanix, can reduce reliance on any single vendor or model. However, it’s important to note OpenStack’s complexity and Nutanix’s higher costs.
  • Focus on Core Competencies: Concentrating on what a firm does best can enhance market position and attract new clientele.

Seize the Moment: Forge Strategic Partnerships Now

The acquisition of VMware by Broadcom marks a pivotal turn in the cloud computing world, reshaping the industry’s framework and signaling a call to action for smaller MSPs, CSPs, and their customers. If you find your business on the fringes of this new VMware ecosystem, or if you are a customer of one of these smaller MSPs, the imperative is clear: seek adaptation immediately, embrace innovation, and act swiftly. Now is the crucial moment to identify and align with strong, credible partners who have secured their place within VMware’s updated partnership program.

This transformative period presents an unparalleled opportunity for smaller service providers to forge alliances with those in the premier tier of VMware’s partner network. Aligning with partners that share your values and commitment to innovation can unlock a wealth of benefits in this evolving landscape, enabling you to navigate market uncertainties with confidence and agility.

For smaller MSPs and CSPs, the message is even more urgent: explore strategic partnerships today to enhance your resilience, adaptability, and long-term success in a sector where change is the only constant. By proactively joining forces with established, values-aligned VMware partners, your business can thrive amidst transformation, equipped to face the challenges and seize the opportunities of tomorrow’s cloud computing domain.

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This article was originally published in Forbes, please follow me on LinkedIn.

Navigating the Shift: Broadcom’s Acquisition of VMware and What it Means for the Cloud

This article was written by Josh Henderson, CTO & COO of Ntirety

Broadcom recently unveiled plans to phase out the VMware Partner Connect Program, instead choosing to incorporate a select group of partners into its Broadcom Advantage Partner Program. This significant shift impacts numerous VMware resellers and cloud providers, affecting virtually every business that utilizes or manages VMware technology. The acquisition of VMware by Broadcom marks a pivotal moment in the market, potentially reshaping not only VMware’s strategic approach, but the wider cloud ecosystem. This change is particularly noteworthy due to the exclusion of a considerable number of Managed Service Providers (MSPs) and resellers from the program, signaling a new trajectory for VMware — especially in its dominance of the private cloud and presence within AWS. But what does this mean for the multi-cloud landscape, and why is it crucial for businesses aiming to excel in the cloud arena? Let’s delve into the implications. 

Ntirety Invited into the Broadcom Advantage Partner Program

We’re thrilled to announce that Ntirety has been selected to join the Broadcom Advantage Partner Program at the Premier level. This prestigious invitation reflects over two decades of collaboration and highlights our deep commitment to the private and enterprise cloud sectors. As part of this program, Ntirety is positioned to continue supporting our customers with their complex infrastructures and assist new clients navigating the changes in VMware’s licensing structure. 

The New Broadcom Chapter

Broadcom’s acquisition of VMware is a transformative event, signaling a strategic shift in how VMware interacts with the market and particularly its partnership model. By consolidating the number of MSPs and resellers in the program, Broadcom is directing VMware towards a model of direct engagement with clients through only their most trusted partners. The change is significant, and prompts businesses to rethink their strategies for VMware deployments. 

VMware remains a leader in the private cloud market, offering solutions that provide the robustness, flexibility, and scalability needed for efficient private cloud management. Additionally, VMware’s presence on AWS enhances its capabilities, facilitating a hybrid cloud environment that merges public cloud scalability with private cloud security. This combination is vital in a predominantly multi-cloud world, where businesses utilize various cloud platforms to fulfill their diverse requirements. 

A Premier Opportunity for Clients and Select Partners Alike

Broadcom’s decision to reduce the number of active global VMware partners in its program from over 18,000 to only 500 signifies a renewed and more focused commitment to its ecosystem and partners. This move aims to streamline operations and promote collaborative growth and innovation. 

Ntirety’s invitation to become one of the 500 partners with VMware underscores our expertise and dedication to providing advanced solutions to our clients. This partnership equips us to navigate the changes following Broadcom’s acquisition, offering our clients unmatched insights, support, and strategic advantages. 

For clients, the Broadcom Advantage Partner Program introduces a simplified business model centered around a per-core subscription license. This model is designed to encourage broader adoption and deliver clear benefits, reflecting Broadcom’s strategy of fostering a supportive network and cultivating long-term partnerships. 

Implications for the Market

For businesses, this development necessitates a reassessment of their cloud and VMware strategies. Partnering with a Premier Partner is now more crucial than ever, as these partners offer: 

  • Expert Guidance: Understanding the evolving VMware ecosystem is essential. A premier partner provides the expertise required to adapt strategies effectively. 
  • Direct Access: The shift towards direct engagement means that having access to premier support and insights is invaluable, maximizing the utility of VMware solutions. 
  • Strategic Advantage: Seamless integration of VMware into broader cloud strategies offers a competitive edge. A premier partner can ensure this integration, supporting businesses in remaining agile and resilient. 

Moving Forward

Agility and adaptability are paramount for any organization leveraging cloud technology, making the choice of partners not just beneficial but essential. Adapting to the changes brought by Broadcom’s acquisition of VMware and aligning with a premier partner like Ntirety is a strategic imperative for forward-thinking businesses. This approach ensures that enterprises can continue to efficiently leverage VMware’s robust cloud solutions as the technological landscape evolves.

If you’re interested in exploring a transition to Ntirety and how we can support your organization’s cloud needs, we invite you to schedule a consultation with our specialized VMware team. We’re eager to discuss your requirements and offer a comprehensive review.