With the 31st of May fast approaching, CSPs operating within the VMware ecosystem must make a critical choice: stay with the Broadcom Advantage Programme or serve notice to leave. The Broadcom acquisition has brought significant changes, and it's essential to understand the implications before making your decision.
Through this blog, I will walk you through the information needed to support your decision and provide actionable solutions if you decide to serve notice to leave.
Recent changes by Broadcom
On April 30, 2024, Broadcom announced further adjustments to the VCSP program. These concessions were likely influenced by external pressures, including the European Commission and an unhappy partner channel. Key changes include:
- Expanded Premier Partner Qualification: Broadcom has expanded the number of Premier partners, beyond the initial 400 they had selected. Many loyal partners had felt left out of this branding and partnership opportunity.
- Exit Option: All partners now face a critical decision regarding their future relationship with VMware by Broadcom. They have the option to exit completely by April 2025, but must decide that they wish to do so now.
- Deadline Pressure: If they wish to leave, Partners must decide by May 31, 2024 - an imminent deadline.
- Managed Migration: If partners choose to exit, they have until the end of April 2025 to migrate to a less volatile vendor—one that doesn’t keep changing its terms.
What you need to know about the May 31st deadline
By May 31st, VMware CSP partners must make a definitive choice to either remain with Broadcom or serve notice to leave. If the latter is your decision, rest assured that you'll have until April 2025 to continue on the program. While the billing methods post-notice are still uncertain, we want to reassure you that support will be available until April 2025, ensuring the continuity of your current IaaS services.
On the other hand, remaining with Broadcom means committing to significantly higher prices for 36 months. Once locked in, CSPs can only increase their consumption but cannot decrease it. This will cause margins to deteriorate as everyone knows the higher prices they must pay, especially compared to Pinnacle & Premier Partners.
A core reason CSPs are choosing to remain with Broadcom falls down to them seeking an alternative but not having discovered the right choice for them.
Changes for Partners
No business wants risk or an uncertain future, and continuing with the Advantage Partner Program presents numerous challenges:
- Cost Sensitivity: Most partners operate within limited budgets and require only specific VMware functionality. Thus, the increase in license cost by at least 3x, to use features not required, presents significant challenges to profitability and customer retention.
- Broadcom’s Pricing Tactics: Broadcom’s history of bundling products to justify price hikes and splitting products for higher charges creates uncertainty, as future changes and increases are likely.
- Post-Acquisition Trends: This is evidenced by Broadcom’s acquisitions of CA and Symantec, where regular price increases and product splits persist.
- Perpetual License Renewals: Broadcom’s internal mandate often results in a staggering 300% price increase for renewing perpetual licenses. Public Sector, Charities, and Academia will see even greater increases as their preferential pricing is being leveled to the same price as everyone else before the 3x increase.
Hence, for many customers and partners, the next 12-month window will provide an opportunity to explore alternatives and potentially migrate away from the uncertainty surrounding Broadcom's VMware strategy.
Cost-effective, flexible alternatives to VMware
At Civo, we offer a unique and powerful solution for CSPs looking to manage their infrastructure efficiently and cost-effectively. Civo provides both private and public cloud solutions using the same software stack, eliminating the need to tweak and enhance your operational efficiency.
Through CivoStack Enterprise, we guarantee a 7-year price lock, with any future price changes notified 12 months in advance. This price lock lets you confidently plan your business’ budget, knowing your costs won’t unexpectedly rise. You'll receive 12 months' notice before any future price changes after this period ends. Additionally, our partner discount grows automatically as you consume more without the need for risky commitments. This flexibility allows you to focus on growing your business without fearing any price compression.
Taking your next steps with Civo
At Civo, we have released the Civo VMware Importer. With this new tool, you will be able to effortlessly transfer your VMs from VMware regardless of whether your VMs reside on an ESXi host, exist as individual .vmdk files, or require a custom import approach.
Want to know more about how the Civo VMware Importer works? Check out our demo video ↓
As the May 31st deadline approaches, now is the time to evaluate your options. Don’t let the uncertainty of Broadcom’s changes impact your business. Discover the advantages of Civo and make the transition to a more stable, cost-effective cloud solution.
Contact our team for more information about your options as we approach the upcoming deadline.
