Resilience, agility in the changing VMware landscape

By Steve Dalgarno, Managing Director of Strategix Technology Solutions, unpacks the implications of the Broadcom acquisition of VMware on customers and innovation.

Johannesburg, 26 Mar 2024
Steve Dalgarno, Managing Director of Strategix Technology Solutions.
Steve Dalgarno, Managing Director of Strategix Technology Solutions.

Broadcom completed its acquisition of VMware in November 2023 in a landmark deal that, even in a world filled with extraordinary technology deals and manoeuvres, sent ripples across the industry.

This strategic move by Broadcom cost the company $61 billion, solidifying the organisation’s position as a significant player in the enterprise software market. The combination of VMware’s expertise in virtualisation and cloud computing software with Broadcom’s prominence in the semiconductor and software infrastructure markets is set to provide enterprises with a comprehensive portfolio capable of meeting their evolving needs.

It has also heralded significant change to how VMware by Broadcom operates, particularly with its vendors and customers. In November 2023, the company moved its perpetual licensing to a subscription-based model and, in February 2024, cancelled all existing VMware partner agreements. Eligible partners, such as Strategix, were allowed back into the programme by invitation only because they met the new requirements. Both these decisions are set to change how vendors and customers engage with one another and VMware by Broadcom in the future.

Only 10 VMware Cloud Service Providers remained within the company’s local South African portfolio after the February 2024 deadline and only 140 subscription resellers were invited to join the programme, as they had demonstrated their alignment with the company’s strategic goals and customer service objectives – Strategix was invited to both.

As a premier cloud services partner, Strategix was recognised for its expertise in architecting and designing, deploying, managing and supporting VMware solutions, which cemented the invitations to both partner programmes, thereby retaining the company’s Premier Reseller status. This allows Strategix to confidently connect with customers to ensure they have the right VMware licences, solutions, products and managed services.

Strategy and collaboration are key

The simplification of the VMware by Broadcom product portfolio was accompanied by a change in licensing model from the perpetual model to a subscription-based model. Perpetual customers will need to move to licences within the new subscription model when their support agreements expire to ensure they maintain access to updates, support and patching. The CSP licences will be charged per CPU core instead of per gig of VRAM per month, which could lead to material price increases unless companies take a strategic approach as to their business needs and cloud strategy.

This is where Strategix comes in. The company's highly skilled and certified consultants will assist you to procure and use what’s best for your business, whether you’re embarking on a public, private or hybrid cloud journey. Strategix still believes that the VMware by Broadcom stack and solutions are among the most robust and secure, and that they are the most trusted hypervisor in the market. Managing this transition needs collaboration with a trusted partner and a clearly defined strategy so you can align the right security and products to meet business demands at the most cost-effective price.

How do partners not invited into the programme service their clients?

Broadcom has initiated a White Labelling Programme, which allows partners to utilise the skills and services of Strategix to permit them to sell to and service their clients via Strategix. As we have always been a partner-driven company, we are well versed to assist these partners to continue delivering VMware to their clients and growing their revenue.

Managing the journey: A simpler route to success

Strategix has been at the heart of this transition, both from an acquisition and a portfolio perspective, because it has wanted to understand its own Strategix Cloud models built on VMware, so Strategix can advise its clients based on its lived experiences. As an invited VMware by Broadcom Premier Cloud Solutions Provider, Strategix wanted to ensure it was in the strongest possible position to advise companies as to the best models to suit their requirements.

Moving forward, Strategix’s fully endorsed and highly skilled and certified VMware Managed Services capability will provide you with a strategy for transitioning to the new model, as well as business as usual capabilities that augment your business operations and technical resources. Together, we will ensure your business enjoys the benefits of the simplified licensing model so you only pay for what you use and can easily budget for growth and innovation.


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