Broadcom Channel Chief Cindy Loyd On Simplifying VMware, Minimizing Disruption And Driving Partner Profitability

‘Change is disruptive and that’s a lot of change all at once. We did look at areas that were successful and retained those elements, taking opportunities to minimize disruption where it made sense. For example, to minimize disruption, we mapped your previous program tier over to the same tier in the Broadcom Advantage Partner Program,’ Loyd says in a blog post.

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Broadcom’s channel chief Cindy Loyd penned a note to VMware’s channel yesterday that acknowledged the “disruption” that had happened “all at once” but vowed the 18,000 partners it had invited to join its partner program were critical to Broadcom’s success.

“We are committed to creating value within our ecosystem, which has only been made stronger with the addition of VMware’s partners,” Loyd (pictured) said in the blog post. “Our partners will be able to grow their businesses as we accelerate execution and drive expansion into private and hybrid cloud for enterprises."

All “active” VMware reseller partners were welcomed back to resell VMware by Broadcom, said Loyd, whose title is vice president, global partners, global enterprise, and commercial sales.

“We have invited all active VMware resell partners (more than 18,000) to participate in the Broadcom Advantage Partner Program,” Loyd wrote.

While the exact count of VMware reseller partners varied over the years, VMware had said in 2023 it had roughly 25,300 reseller partners in its Partner Connect program.

Broadcom did not immediately respond to a request sent after-hours seeking comment about the difference in the two figures. In an FAQ, Broadcom said all active resellers can expect to move into an equivalent tier inside Broadcom’s Advantage program.

“Active resellers are defined as partners with an active contract within the last 24 months. The invitations were sent to the primary and secondary contacts in our system. There is no universal threshold for partners to join the program, and there is no fee to join.”

The partner program's name has changed to Broadcom Advantage Partner Program. Loyd said Broadcom will give partners a proven, simple, and "scalable framework for all of our business units and partner routes to market."

She said while VMware has several types of reseller partners all of them craved simplicity to reach their organization’s sales goals with its products.

"During our many conversations with you about your needs—and what worked and didn’t work with the previous partner program—we heard quite clearly that you needed simplification to reach your revenue potential," Loyd wrote.

Broadcom closed the $69 billion deal to buy VMware in November. Since then it has moved swiftly to usher in changes that drive profitability, beginning with more than 2,000 job cuts. In December the company emailed “termination notices” to all of its partners. In January, it told partners it would take top customer accounts direct “effective immediately.” Broadcom has also announced massive changes to its OEM agreements.

“Change is disruptive and that’s a lot of change all at once. We did look at areas that were successful and retained those elements, taking opportunities to minimize disruption where it made sense. For example, to minimize disruption, we mapped your previous program tier over to the same tier in the Broadcom Advantage Partner Program,” Loyd said.

Broadcom Vice President of OEM Ricky Cooper told CRN that the previous model featured uneven pricing and unfair deals that were bad for the market. He said Broadcom has sought to level the playing field for all of its OEM partners.

In her blog post, Loyd highlighted a few areas where Broadcom would help partners.

Changing Rebates

Loyd said Broadcom would use a net margin model for rebates going forward.

"We have evolved the rebate program which you told us was complex and administratively heavy," Loyd said. "Many of you said you were often left wondering how much money you actually made. By moving to a net margin model, all discounts will systematically be disclosed up front. You will now know exactly what you’re making on every deal, consistently across both new and renewal business."

Pricing

Loyd said Broadcom had streamlined VMware pricing to end confusion over what to sell and how to sell it.

"You also shared that so many solutions existed on the price list that you weren’t really sure what to sell and how to sell it. To help you and our mutual customers, we have simplified pricing down to four SKU bundles: VMware Cloud Foundation, vSphere Foundation, vSphere Standard and vSphere Essentials Plus."

"Renewals Matter"

Two items partners told Loyd they wanted were predictable profitability and deal protection.

"We heard that renewals matter. We agree. Our goal is to protect partners who originally found an opportunity so they can confidently invest in customer adoption and successful deployment of their VMware investments," Loyd said. "To that end, we’ve introduced incumbency protection and deeper up-front discounts. We are creating these incentives for you to drive focus on delivering customer outcomes for 95 percent of the business through the incumbency protection policy."

In Broadcom’s FAQ about deal registration and in slides it has shared with partners, it outlines the path partners must follow to protect deals.

Loyd said Broadcom is also driving simplicity for the partner experience with Broadcom's partner portal with new systems and tools.

"We saw that VMware experienced rapid growth, and with that came multiple tools with multiple logins," she wrote. "At Broadcom, we have created a single online destination to access all partner related resources. We have established role based, single sign on and point of entry for all partner sales tools, systems and dashboards."

Reduce Channel Conflict

Partners told Loyd that cross routes to market and channel conflict presented a challenge under VMware's prior channel. Loyd said Broadcom has realigned its business units, sales and partner teams and has taken steps to provide better support and resources.

"How? We’ve defined partner-owned and partner-led segments within our customer base, opened up professional services for our partners so they can drive adoption and customer success at very attractive margins, and we’ve redesigned our internal structure so that business units, sales, and partner teams can work together and provide better support and resources to our partners," she said.

What To Expect Going Forward

Loyd came to Broadcom through the company’s $18.9 billion CA Technologies acquisition in 2018. For Broadcom, she said the goal has always been to help global customers simplify their IT environments and make it more resilient and secure.

"You, our partners, are key to reaching this goal. We are committed to creating value within our ecosystem, which has only been made stronger with the addition of VMware’s partners. Our partners will be able to grow their businesses as we accelerate execution and drive expansion into private and hybrid cloud for enterprises."

To make it work, Broadcom will "invest heavily" in the Advantage program, Loyd said.