“Broadcom is reducing the number of partners authorized to resell VMware solutions in the Americas, and Asia-Pacific and Japan regions,” said Broadcom-VMware’s global channel chief Brian Moats.
Broadcom-VMware is cutting partners in its lowest channel tier from their ability to resell VMware products as the company looks to slim down its partner base yet again.
“Broadcom is reducing the number of partners authorized to resell VMware solutions in the Americas, and Asia-Pacific and Japan regions,” said Broadcom’s global channel chief Brian Moats (pictured) said in a blog post Sunday.
Broadcom is reducing its four-tier Broadcom Advantage Partner Program for VMware Resellers— Registered, Select, Premier and Pinnacle—into three tiers, eliminating its lowest ‘Registered’ partner tier completely.
[Related: Broadcom’s VMware Financial Model Is ‘Ethically Flawed’: European Report]
“This decision will enable Broadcom to focus on deepening our relationships with those partners who are committed to delivering the transformative customer experience around VMware solutions, as demonstrated by their historical performance levels, technical and other relevant expertise, and ability to make the investments necessary to offer customers the levels of service they expect and deserve,” said Moats, senior vice president of global commercial sales and partners.
Broadcom’s global partner leader said some VMware customers will “need to transition to a new partner relationship.”
What VMware Resellers Are Being Cut?
The Palo Alto, Calif.-based company said it will give Registered partners 60 days’ notice before deauthorization.
“We are beginning the process of transitioning partners who no longer meet the minimum program requirements or have not demonstrated consistent engagement,” said Moats.
Broadcom did not disclose how many VMware partners would be terminated from its program entirely.
Moats said the “vast majority” of customer impact and business momentum comes from partners who are in the top three tiers: Select, Premier and Pinnacle.
European Partners Exempted
It is key to note that European Broadcom-VMware partners will be exempt from the changes. Broadcom said it doesn’t “have any program changes in Europe to announce.”
Interestingly, European trade groups have recently criticized Broadcom-VMware’s financial model while urging European lawmakers to open an investigation on Broadcom’s business model. (More information on that topic below.)
Moats, who was named Broadcom’s new channel chief in January, said the move comes as Broadcom seeks to reward partners who have made big investments in VMware Cloud Foundation (VCF) while cutting off partner relationships who haven’t changed since Broadcom acquired VMware in 2023.
‘Raising the Bar Across The Program’ Says Channel Chief; Here’s The Changes
In addition to axing VMware Registered partners, Moats said Broadcom is “raising the bar across the program.”
Pinnacle partners will now be required to hold Expert Advantage Professional Services Partner status, which demonstrates skills in the deployment and implementation of VCF. Alternatively, partners can qualify by maintaining a dedicated Small and Medium Business (SMB) practice that supports scalable adoption, according to Moats.
Both Pinnacle and Premier partners will now be required to maintain dedicated sales and technical resources to ensure customer lifecycle support skills, Broadcom said.
Pinnacle and Premier partners will also need to execute joint business plans with VMware to ensure alignment and delivery with mutual results.
“All partners must remain active and in good standing,” said Broadcom’s channel chief. “This is essential to preserve the integrity of our partner ecosystem and ensure every customer interaction is rooted in capability and commitment.”
Broadcom’s Partner Future: A Higher Standard Needed
Moats said Broadcom’s channel future will rely on partners who lean heavily into VMware with a big focus on VMware Cloud Foundation.
Solution providers who want to remain in Broadcom’s channel program will need a “higher standard of performance” compared to the past, he said.
“We’re entrusting this focused group with a broader set of customers and, in return, expect them to lead with excellence, operate at scale, and deliver real impact on the journey to a modern private cloud,” said Moats.
For customers, this means access to a “stronger, more capable partner ecosystem,” built to support IT modernization, AI initiatives, and cyber resilience powered by VCF, Moats said.
With fewer channel partners to now compete with as Broadcom cuts a slew of partnerships, Moats said those partners who remain will now have more customer opportunities and the ability to differentiate.
“With more customer opportunities, retained partners will have a more relevant and impactful role in the VMware business,” said Moats. “We’re investing in those who invest in and have a shared commitment to our customers’ success, and we look forward to building the future together.”
European Report Slams Broadcom
These major channel changes come as European trade organizations are seeking regulators to punish Broadcom-VMware for its current business and financial model.
VMware’s current licensing model relies on practices that breach European competition regulations, while Broadcom’s overall business model “remains legally and ethically flawed,” according to a new report this month by the European Cloud Competition Observatory (ECCO) group.
“Broadcom can report that most have signed new contracts, but we know that these are punitive and threaten the viability of service providers locked-in to the VMware ecosystem,” said Francisco Mingorance, secretary general of the Cloud Infrastructure Services Providers In Europe (CISPE) group, a trade association of 37 cloud providers tasked with monitoring software vendors accused of monopoly practices. “Urgent action is needed.”
Some of the biggest issues for VMware cloud partners and customers in Europe include the company increasing prices after Broadcom axed VMware’s former perpetual licenses and pay-as-you-go monthly pricing models. Another big issue was VMware cutting its product portfolio from thousands of offerings into just a few large bundles that are only available via subscription with a multi-year minimum commitment.
“The current VMware licensing model appears to rely on practices that breach EU competition regulations which, in addition to imposing harm on its customers and the European cloud ecosystem, creates a material risk for the company,” said the ECCO in its report. “Their shareholders should investigate and challenge the legality of such model.”
Broadcom will report its financial results for its fiscal 2025 second quarter on June 5.
