Virtualization

Broadcom 'bulldozes' VMware cloud partners as March deadline looms

Many European CSPs are being cut loose, sources say, forcing customer transitions

EXCLUSIVE Broadcom this week brought the hammer down on the Advantage Partner Program for VMware Cloud Service Providers (VCSPs) – and the clock is now ticking for any third parties working to close sales.

For customers, this potentially represents a massive supplier shake-up, with sources claiming that hundreds of CSPs across Europe are affected.

The news may not come as a shock to Reg readers because the direction of travel was indicated when Broadcom shuttered VMware's reseller/solution provider schemes in early 2024 and moved to the invite-only Broadcom Advantage Partner Program. Broadcom has also started to license new bundles, including products previously sold as standalone, and altered support for perpetual license holders.

Dramatic changes also hit cloud service providers. Broadcom gave notice on October 31 that it was phasing out the VCSP program and sunsetting the White Label model for partners in the European Economic Area. It is now moving to an invite-only model with fewer authorized providers and this week informed affected partners.

On Monday, in a non-renewal email seen by The Register, Broadcom said: "We are providing this formal notice that we have closed the current Broadcom Advantage Partner Program for VMware Cloud Service Provider (VCSP) partners, and will not be renewing any of your VCSP partner contracts with Broadcom after 26 January 2026."

"You may continue to transact new and existing coterminous customer opportunities through the end of your current commitment contract term. The term for any new contracts executed during this period must be coterminous with a current active commitment contract that you have with Broadcom. However, we encourage you to close any open opportunities you may be pursuing by 31 March 2026."

In an FAQ document also seen by El Reg, Broadcom said the reason for not continuing with certain authorized VCSPs pertains to "evolving customer requirements" – it didn't specify what these are – and to "enable increased adoption of VMware Cloud Foundation as the core private cloud platform." This means Broadcom needs to "work more closely with a focused set of partners."

CSPs may "execute" new coterminous customer contracts and keep servicing existing customers under VCSP commitments for the remainder of the contract terms with Broadcom, their Cloud Commerce Manager, or their Primary White Label Provider partners.

"You may not execute any new Aggregate commitment contracts nor any renewals for existing commitment contracts, so that a timely and orderly wind-down of the current Program can become effective at the end of your existing commitment contract term(s)," the notice states.

The Cloud Infrastructure Service Providers of Europe trade group (CISPE), which is pressing the European Commission to overturn its approval of Broadcom's buy of VMware on antitrust grounds, was damning of the January 26 notification. One of its members, Estonia-based WaveCom, said it has invested in VMware for 15 years.

Kristian Liivak, CTO and founder of WaveCom AS, said a "bulldozer named Broadcom" has "finally rolled over the remaining EU cloud service providers, terminating almost all VMware partner contracts."

"This process had already taken place elsewhere in the world. In the United States, for example, only 19 providers reportedly remain out of thousands. Now the same approach has reached Europe."

Liivak said VMware, under Broadcom's ownership, has "dismantled" the partner network, beginning with "predatory contractual terms and aggressive pricing changes." He claimed the "long onboarding queues of enterprise customers disappeared almost overnight."

WaveCom previously started to build a virtualization stack based on Apache CloudStack and the EU-based Vates and Xen.

"We still carry long-term government procurement obligations and enterprise contracts. It remains unclear how all customers will transition – whether they will move with us to the new platform or whether contractual challenges will arise due to the forced termination of the VMware ecosystem."

In its FAQ document, Broadcom covered what happens to customers managed by a non-renewing partner, saying: "Non-renewing partners are encouraged to engage with retained VCSP partners to ensure a smooth transition for customers."

Liivak said: "We will not disappear quietly into the night. And we will not hand our customers over to the remaining few providers, as implied by Broadcom's termination notice."

Another CSP source told us: "This isn't partner management, it's market control, a forced consolidation that sidelines long-standing European partners in favor of a much narrower and more limiting ecosystem. Broadcom is deliberately shrinking the choice for customers who will end up paying the price through higher costs, less data sovereignty, compliance concerns, and ultimately reduced choice."

The Register has asked Broadcom to comment on how many CSPs will be joining its invite-only channel program, how many were not renewed and what if customers don't want to move to a new supplier.

A spokesperson sent us a statement:

"Broadcom's strategy since closing the VMware acquisition has been to drive simplification, consistency, and innovation across the VMware ecosystem, including VMware Cloud Services Providers (VCSPs). Recent changes to this ecosystem are consistent with this strategy. Broadcom is focusing more and going deeper with the VCSPs who have demonstrated commitment to their cloud services built on VMware. This will enable us to deliver greater value, stronger execution, and a more streamlined experience for Broadcom's customers and enable an alternative competitive offering to the hyperscalers through our VCSP partners." ®