WWT CEO On ‘Disappointing’ VMware-Broadcom Strategy And ‘Positive’ HPE-Juniper Merger
‘We would love to build a strategic partnership with VMware. Unfortunately, I’m not sure that’s what they have planned,’ says World Wide Technology CEO Jim Kavanaugh.
WWT is a $17 billion St. Louis-based IT juggernaut and one of VMware’s top partners on a global basis.
“At the end of the day, we would love to build a strategic partnership with VMware. Unfortunately, I’m not sure that’s what they have planned,” WWT CEO Jim Kavanaugh told CRN.
“It’s just one of those things unfortunately that when the market changes with acquisitions, go-to-market strategies and partnerships change,” said Kavanaugh. “It is disappointing considering the investment we made. And I would say there are customers that are concerned about, ‘What is the long-term partnership with VMware? How is that going to play out?’”
Broadcom Ends VMware Partner Program, Takes Some Accounts Direct
Broadcom closed its blockbuster $61 billion acquisition of VMware on Nov. 22.
CRN has discovered that Broadcom’s go-to-market strategy now includes taking some of VMware’s largest customers direct—about 2,000 accounts—and will reject attempts by partners to register deals with the company.
In addition, last month partners were told that the VMware partner program will be terminated, along with its channel incentives and partner status within the program. It will be replaced with the Broadcom Advantage Partner Program in early February. Many partners do not know if Broadcom will invite them into the program or if they can continue to sell VMware products.
Broadcom is also dramatically changing VMware’s products and business organization by consolidating VMware’s IT stack into fewer offerings. Broadcom also said it will be splitting the company into four separate business units.
In an interview with CRN, Kavanaugh talks about WWT’s future with VMware by Broadcom, Hewlett Packard Enterprise’s huge upcoming acquisition of Juniper Networks, as well as WWT’s plan to hire upward of 800 new employees in 2024.
This week, HPE unveiled plans to acquire networking and AI standout Juniper Networks in a deal worth approximately $14 billion. HPE will gain Juniper’s massive service provider and enterprise campus networking businesses as well as its acclaimed Juniper Mist AI portfolio.
“HPE’s acquisition [of Juniper Networks] will help complement and round out HPE’s portfolio,” WWT’s CEO said. “I think it’s a positive and a good move for HPE.”
As a longtime global VMware partner, what are your thoughts on Broadcom shutting down VMware’s Partner Program and taking many accounts direct versus through the channel? This seems scary for VMware partners.
What you described is accurate. It’s disappointing from my perspective. At the end of the day, that’s the choice that Broadcom made. Their go-to-market strategy is their decision.
As you described, that sure seems to be the direction that they’re taking which, from our perspective, is disappointing considering a lot of the investments that we’ve made in VMware.
We just don’t have any real clear line of sight or path for any kind of real strategic partnership. We’ll see. Maybe something changes there. But the way you described it is a pretty accurate assessment of what we’re seeing.
At the end of the day, we would love to build a strategic partnership with VMware. Unfortunately, I’m not sure that’s what they have planned. Maybe something will change, but I’m not sure about that.
Are customers looking to switch off VMware now? Are you concerned at all from a partner and customer perspective?
It’s just one of those things unfortunately that when the market changes with acquisitions, go-to-market strategies and partnerships change.
It is disappointing considering the investment we made. And I would say there are customers that are concerned about, ‘What is the long-term partnership with VMware? How is that going to play out?’
All we can do is continue to have discussions with Broadcom and VMware and see where they’re going. And if it’s not meant to be because that’s not the direction they want to go from a partner perspective, then we have to be agile enough to move on and look at other alternatives and solutions for our customers.
It’s disappointing when you make those kinds of investments over the years because there was that commitment [from VMware] to the channel and partnerships.
But at the end of the day, there’s a lot going on in our space today. We will focus on the areas that we believe are going to have the biggest impact on our customers and ones that [will let us] bring the most value to our clients.
So on the VMware side, it doesn’t look like it’s going to be a strategic partnership unless they decide to change how they’re going to go to market.
As one of Cisco’s largest partners in the world, what are your thoughts on HPE’s acquisition of Juniper Networks?
First off, our business and partnership with Cisco continues to grow and deepen. So we feel very good about the partnership with Cisco in what we’re doing with them across the board. We continue to see growth domestically, in state and local public sector, and also globally. So we feel good about what Cisco is doing and where they’re going.
It’ll be interesting to see how Cisco continues to invest when they look at analytics and things around AI. When we look at Splunk and some of those investments that Cisco’s making, I think they’ll continue to lean in.
When I look at HPE, [CEO] Antonio [Neri] has done a really nice job.
I think there will continue to be consolidation in the industry. So when you look at HPE, I think Antonio has done a very good job since being in the CEO spot of really being more focused about what they do and giving direction to their team.
The Juniper acquisition will directly impact what we’re doing today. It’ll be interesting to see Antonio’s vision. I’ve got some time scheduled to meet with Antonio in the coming weeks, but he has done a good job. He’s been very pragmatic about what he’s doing with HPE.
HPE’s acquisition will help complement and round out HPE’s portfolio. I think it’s a positive and good move for HPE.
WWT has hired thousands of net new employees over the past two years while other tech companies have conducted large layoffs. Do you plan on increasing WWT’s head count in 2024?
Yes, we do. We have plans [to] hire 700 to 800 people again this year.
I firmly believe that there’s so much opportunity around AI, cloud, cyber and digital transformation. It’s going to be a good space this year. A lot of the hiring will be done [in these areas].
There are challenging pockets around the world for different reasons. You’ve just got to work through those. The last couple of years, service providers had a challenging space. That was one of the areas that was a little slower. They’re starting to make some progress. We hope that continues to be the case this year.
We had a very strong year in 2023. Activity is very good going into 2024. The numbers look good.
What’s your economic outlook for WWT in 2024? Is it going to be another positive growth year?
We’ve had really, really good growth over the last five years. We just closed out our five-year plan and overachieved some of our more ambitious goals. I couldn’t be happier with the performance of the team and my executive team—they’ve done an amazing job [with] the company and just the people and our employees overall. So I’m very thankful and grateful for all the hard work and the good work that they’ve done.
Over the last five years, think about the challenging macro-economic issues from inflation to interest rates to wars that are currently happening today, the instability, social unrest, COVID, supply chain issues—just a barrage of challenging situations. Even in the last two years, a lot of the analysts were predicting a depression or definitely a recession. And none of that’s really played out to that degree. So fortunately, our business has been very strong.
So overall, I’m personally cautiously optimistic about 2024.
But I would say I’m even more optimistic about the opportunity longer term because of things like artificial intelligence. The runway for AI and other tech opportunities are massive, and I don’t see it slowing down this year.