Broadcom Led Changes - VMware Faces Customer and Partner Concerns

Broadcom has implemented numerous changes to VMware after it acquired the company in November. Recently, VMware acknowledged that these changes have caused concern among their customers. As a result, customers are considering alternatives, and partners are complaining. To mitigate the damage, VMware is attempting to persuade people that change can be beneficial.

A recent plea has been made by Prashanth Shenoy, who serves as the Vice President of product and technical marketing for the Cloud, Infrastructure, Platforms, and Solutions group at VMware. In an announcement, Shenoy acknowledged that VMware has undergone significant changes since being acquired for $61 billion. As a result, customers have raised many questions and concerns while evaluating how to extract maximum value from VMware's products.

VMware, a leading software company, recently made a significant change in its business model. Instead of relying on perpetual licensing, which was considered the cornerstone of its business, VMware has now switched to a subscription-based model. This move marks a notable shift in the company's approach to licensing, considering that just a year ago, VMware had referred to its perpetual licensing model as its "most renowned" offering.

Shenoy aimed to explain the rationale behind the change, noting that "all major enterprise software providers are on subscription models today.”

In early December of last year, Broadcom has announced that it would be adopting a subscription-based model for VMware, a cloud computing and virtualization software provider. This announcement came several weeks after Broadcom had completed a $69 billion acquisition of VMware. The move to a subscription-based model was a significant shift for the company, as it meant the end of perpetual licenses for existing and future customers. The decision was not universally popular, and some customers expressed disappointment and frustration with the change.

Recently, the company announced the streamlining of its product portfolio. As part of this initiative, they are reducing nearly 9,000 product SKUs and 160 product bundles to two primary bundles: VCF and VMware vSphere Foundation. These bundles cater to the needs of different customer segments, with the latter designed for smaller and mid-sized businesses. The VMware vSphere Foundation bundle includes vSphere server virtualization software, Tanzu Kubernetes Grid, and Aria Operations management software, thus providing customers with a comprehensive solution for their virtualization needs.

The consolidation of products may have led some customers to believe that the company was discontinuing certain offerings, when in fact, they are still available but will now be sold as part of packages rather than individually.

In late December, Broadcom announced the discontinuation of its partner program without providing further details, leaving its 18,000 reseller partners uncertain about their status. For nearly a month, they awaited clarification on whether they would be reinstated.

Starting in mid-January, Broadcom began extending invitations to its reseller partners to join the Broadcom Advantage Partner program. Shenoy confirmed that all resellers who have sold VMware products to customers within the past two years have now been invited back.

“You heard out in the market that VMware as part of Broadcom is now not going to focus on partners. This is further from the truth,” Shenoy said. “The challenge is that in those few weeks, there was silence. We didn’t clearly articulate the plans. And they didn’t know if they were going to get an invite.”

Conclusion

VMware's transition under Broadcom's ownership has stirred concerns among customers and partners alike. The shift to a subscription-based model and the consolidation of product offerings has prompted uncertainty and raised questions about the company's direction. Prashanth Shenoy's recent plea acknowledges the challenges faced by VMware as it navigates these changes.

Meanwhile, the company aims to reassure stakeholders that transformation can yield benefits, but the initial communication gaps have led to apprehension and speculation. Moving forward, VMware must prioritize transparent communication and engagement with its customers and partners to rebuild trust and foster a collaborative environment conducive to mutual success in the evolving landscape of enterprise software solutions.