Dell is terminating its distribution deal with VMware

Dell is terminating its distribution deal with VMware

Dell have enacted a change of ownership clause allowing either party to withdraw from the deal following VMware's takeover by Broadcom.

Published on 5th February 2024

In a recent regulatory filing, Dell Technologies has confirmed it will be terminating its commercial framework agreement with VMware by using a clause that would allow either party to pull out should there be a change in the control of the other party.

Until November 2021, Dell had an 81% stake in VMware, but this was sold as part of Broadcom’s takeover of the company, which also introduced several significant changes to VMware operations which left left many customers and partners unhappy.

When Dell sold its stake in VMware in 2021, the two struck up a deal that would allow Dell Technologies to continue distributing the latter’s products and services, as well as a degree of collaboration on some solutions and go-to-market activities.

Dell ends deal with VMware after Broadcom takeover

The January 25 filing is subject to a 60-day notice period, meaning that the companies are expected to part ways on March 25.

Originally, the agreement set out: “with respect to certain technologies and [go-to-market] activities, the Parties’ respective products and services work better together to create advantages and value for customers.”

Dell’s termination of the agreement follows Broadcom’s decision to change licensing policies for VMware products, cutting perpetual licenses in favor of subscription-based models – a move that proved to be unpopular among partners, distributors, and customers alike.

Although Broadcom’s changes have sent ripples through the virtualization landscape, VMware continues to be an incredibly competitive option. It’s unclear whether some recent unsavory decisions have driven Dell to want to sever its ties with the company, or whether there’s more at play.

A Dell spokesperson shared the following statement with TechRadar Pro in an email:

“Broadcom and VMware solutions remain a part of Dell’s portfolio of products, including embedded solutions such as VxRail and Carbon Black. Broadcom is an important and valued partner of Dell Technologies, and we will continue to deliver value to our customers and partners who select Broadcom and VMware solutions.”


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