VMware by Broadcom offers a lifeline to small cloud service providers

VMware by Broadcom offers a lifeline to small cloud service providers

A new 'white label' program will see VMware cloud providers retained without making the cut for Broadcom's own Advantage Partner Program.

Published on 22nd March 2024

VMware by Broadcom appears to have made concessions to some of the cloud service providers it has previously indicated it will spurn.

Pre-acquisition VMware ran a Cloud Services Provider (VCSP) program that saw some partners offer various VMware applications as cloudy managed services, plus a VMware Cloud Providers Program (VCPP) that saw channel orgs operate public clouds based on the Cloud Foundation hybrid cloud stack that Broadcom has made its hero product.

Not long after acquiring VMware, Broadcom ended the VCSP program. Participants were told they may be invited to Broadcom’s own Advantage Partner Program, with a requirement to license at least 3,500 cores.

That’s way more than many small VMware—powered clouds have in production. And if those operators were not allowed into Broadcom’s program, they would not even be able to acquire VMware licenses.

It is understood hundreds of VCSP and VCPP members were not invited to join Broadcom’s Advantage Program. We’re told many faced the prospect of not being able to continue offering VMware-powered services – meaning their clients could be forced to make a risky, costly and decidedly unwelcome move to a new cloud provider that had managed to keep its place in Broadcom’s partner program.

Former VCSP partners would then find themselves with hardware they had acquired – and assumed they could amortize over many years – but without the VMware software for which their customers had signed up.

It has been reported that smaller cloud operators despaired at this situation, and that it has dawned on Broadcom that it was creating a moment in which customers of those small clouds would be forced to consider their future as VMware users.

Broadcom’s response to this situation is a “white label” program that will see cloud providers retained in its partner program allowed to resell their capabilities to those who don’t make the 3,500-core cut.

Documents describe licensing rules that allow what Broadcom calls a “Primary VMware Cloud Service Provider” – a member of its partner program – to work with a “Secondary VMware Cloud Service Provider” that is not a Broadcom partner.

Secondary partners can resell Primary partners’ clouds. Or Secondary partners can acquire licenses for their existing hardware from Primary partners.

Primary partners can run as many Secondary partners as they want, and get the job of handling all billing and metering.

This arrangement is a lifeline to former VCSP and VCPP partners who have not been invited to become Broadcom partners, as it means they can continue to serve their customers as before – while paying a Primary partner for licenses instead of paying VMware.

It may also be a lifeline for Broadcom. VMware was very fond of the VCPP on grounds that the 4,000 participants in the program were fabulously diverse. Some were global system integrators, others specialized in particular workloads, and some operated sovereign clouds.

All were pitched as an alternative to hyperscalers – which is just what Broadcom has said it wants VMware to become. Indeed, Broadcom advised regulators that buying VMware would increase cloudy competition.

Making it impossible for VCSP and VCPP members to continue offering VMware-powered cloud services would clearly do the opposite. Broadcom appears to have figured that out just in time before the partners it ejected faced deadlines for finalizing their licenses when the VCSP program winds up in mid-April. That deadline leaves former VMware partners needing to understand and implement the Primary/Secondary arrangement quite quickly – but seeing as many faced oblivion the rush is a far better alternative.


The latest updates straight to your inbox

We just need a few details to get you subscribed

Health Checks

Inventory & Compliance

Cloud Readiness & Optimisation

Agreement & Audit Support


Looking for something specific?

Let's see what we can find - just type in what you're after

Wait! Before you go

Have you signed up to our newsletter yet?

It’s chock full of useful advice, exclusive events and interesting articles. Don’t miss out!

Cookie Notice

Our website uses cookies to ensure you have the best experience while you're here.