New VMware owner Broadcom is now converting the licensing model to a sales model via the Virtualization Specialist Partner Program and, in a first step, is terminating the contracts of all VMware sales and service partners; This affects service providers and resellers and therefore all partner activities with VMware users as well as the sales incentives granted. The aim of the campaign is to switch to new contracts with new conditions and an invitation system. This was reported by the CRN news site.
Immediate collective termination of partner contracts
According to a CRN report, Broadcom has notified VMware partners that their contracts will end on February 4, 2024. Broadcom told CRN that it is now converting the partner program to an invitation-based “Broadcom Advantage Partner Program” after working with hundreds of partners. Spoken all over the world – this opens up more sales opportunities and increased income due to the simplified product range.
The owner of VMware recently reorganized all VMware licenses and now offers only two subscription models with bundled VMware products. Software that requires a subscription is not only accepted with cautious enthusiasm by private customers: for business customers, the fixed costs of annual functionality updates – with questionable benefits and recurring subsequent problems – are rather unpopular; Traditionally, they prefer a one-time spend over the medium to long term on a product with fixed features that receives ongoing security updates.
In an email to its 65,000 partners around the world on December 22, Broadcom informed them of the changes — and invited some of them to the new program. One VMware partner, who remained anonymous, told CRN that according to Broadcom's internal discussions, only partners with revenues of $500,000 or more would be interested in the new software. It is still unknown whether there will be continued cooperation with smaller VMware partners. Such a cash threshold would likely hit thousands of smaller partners hard, especially in a services environment, potentially depriving them of the foundation of their business – not to mention impacting their customers' day-to-day IT.
As CRN quotes its informant: Previous contracts expired in January for most partners and in April at the latest for service providers. Obviously, only selected people will have access to the new partner program. US chipmaker Broadcom was only able to complete its takeover of VMware in November after China also allayed antitrust concerns.
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