Broadcom is backtracking on its plans to personally serve VMware’s top 2000 customers, limiting itself to the five hundred largest. Illustrative of Broadcom’s stock price.
No IT company has calmed tempers like Broadcom. VMware’s parent company is making yet another 180-degree turn. Broadcom announced earlier this year that it would personally serve the 2,000 largest VMware customers. It is partially backtracking on that plan and limiting itself to the five hundred largest companies. A decision made quietly at VMware Explore and now being brought out by The Register.
It has now been a year since Broadcom acquired VMware, but far from all customers are convinced by the renewed portfolio. Therefore, Broadcom chooses to serve the largest and most lucrative customers highly personally. In this way, Broadcom ensures that those customers stay on board and also purchase the full VMware bundle. ‘Smaller’ customers are referred to partners.
Big, bigger, biggest
The change is illustrative of VMware’s direction under the new regime. Broadcom is only interested in the very largest companies and thus draws the line at the top 500. For what Broadcom sees as the smaller customers, the reshuffled portfolio now means mostly higher licensing fees and mandatory bundle purchases. Take it or leave it, is the message.
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Broadcom puts extra emphasis on preferential treatment for largest VMware customers
The numbers prove Broadcom right. It has managed to cut VMware’s costs significantly, and investors like to see that. Even hyperscalers have to bend to Broadcom’s will. Revenue is also down slightly, but that seems to be part of the master plan. If the big fish stay on board and go all-in, the cash register will continue to ring.
Exodus remains out
No more than an acknowledgment of “some discomfort” should disgruntled customers expect from Broadcom. Interest groups denounce Broadcom’s behavior, but even that does little to help. Broadcom doesn’t want to hear it and doesn’t care.
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Broadcom surprises VMware customers with penalties for late renewals
Companies whose VMware licenses are expiring face the dilemma of “stay or leave?” and Broadcom is not allowing much pause for thought. Dell and Nutanix, among others, were looking forward to a mass exodus of VMware customers, but that doesn’t seem to be coming true for now.