Broadcom Tells VMware Partners To Halt ‘Commingled’ Carbon Black Deals
Broadcom is directing VMware partners not to mix products from Carbon Black and VMware End-User Computing in with sales of other products as it considers “strategic alternatives” for those business units, which it picked up last week when it closed its VMware acquisition.
In the wake of its acquisition of VMware last week, Broadcom notified VMware channel partners they should immediately stop bundling sales of VMware products with those belonging to Carbon Black and VMware End-User Computing as Broadcom prepares those units for “strategic alternatives.”
In an email addressed to VMware partners, Broadcom informed them of “immediate changes” being implemented “in an effort to align and unify the two organizational policies.”
“As of November 22, 2023 [the closing date of the acquisition], VMware will not be able to accept any and all forthcoming Orders unless you (as our Partner) agree to the following terms: … Partner agrees that all End User Computing offerings extended to an End User shall be on a single Order and not commingled with any other product lines; and Partner agrees that all Carbon Black offerings extended to an End User shall be on a single order and not commingled with any other product lines.”
One VMware reseller said this removes a sales lever around bundling products, which can increase stickiness with the customer.
“Looks like it might need to be repriced separately or at least separated out from other lines of business,” the reseller said in an email to CRN after reading the new directives. “Not unusual to try and bundle the lines of business for better pricing or to get the customer to try it as part of a larger deal to take business from a competitor. Looks like Carbon Black might be spun out soon.”
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Indeed, Broadcom said it would “review strategic alternatives” for the Carbon Black and VMware User Group businesses in a Nov. 22 email first reported by CRN.
“We will also continue to support VMware’s End-User Computing, led by Shankar Iyer, VP and General Manager, and Carbon Black, led by Jason Rolleston, VP and General Manager, as we review strategic alternatives for these two businesses,” stated the email addressed to Broadcom employees and signed by Broadcom President and CEO Hock Tan announcing the close of the acquisition.
Broadcom told VMware resellers that its goal is to enhance the value VMware brings to partners.
“We know that customers value VMware because of its strong history of innovation and technology leadership, as well as its robust partner ecosystem,” the email stated. “Our goal is to preserve and enhance the value that VMware brings to its global customers and partners. Please watch for upcoming announcements for our partners and the Partner Connect program in the days ahead.”
Broadcom has not commented on the early difficulties faced by VMware’s channel partners.
VMware Partners See Challenges In The Field
The changes to partner terms and conditions come as partners say it’s difficult to get in touch with VMware personnel to provide clarity or even to respond to deal approval and pricing requests, which is halting their sales.
“We can’t get deals approved or pricing. We look like we are not responsive because we can’t get a VMware rep who just got fired to approve the deal,” said one VMware reseller. “In some cases, there is a manager and a line employee [laid off] and there is no one there to approve the deal.”
VMware Monday notified some of its recently absorbed VMware employees that their positions had been eliminated.
Another partner said he knew price changes were coming but as yet there has been no communication from Broadcom about what those new figures look like.
“We haven’t had anyone reach out proactively,” said that VMware partner, who asked not to be identified in order to speak frankly. “Most of the quotes we had been getting in the previous two months had a disclaimer that these prices are only good day to day with the pending Broadcom acquisition being finalized.”
Another solution provider executive said he has been surprised by just how much disruption he is seeing in the field.
“This all seems really sudden,” he said. “I am surprised [Broadcom] did this this quickly. They have just blown this thing apart. It looks there was a detailed plan on what cost-cutting was going to take place. It is surprising it has taken place so quickly.”
The fresh gripes come one day after other VMware partners told CRN that their pending deals too were being left in limbo. C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company that did $30 million in VMware sales last year, told CRN Monday that numerous deals were stalled without pricing in place.
Amid the partner tumult, details of the VMware layoffs have continued to emerge as those who lost jobs add posts to LinkedIn. The number of verifiable jobs lost due to the acquisition climbed to 401, according to Worker Adjustment Retraining and Notification (WARN) letters filed in Colorado and Georgia.
Broadcom has not commented on the number of employees let go, but analysts expect the action have a financial impact of $250 million. According to a WARN letter sent to the Colorado Department of Labor and Employment, Broadcom would eliminate 184 jobs in that state, but its facilities in Broomfield will remain open.
Broadcom has not commented on the number of employees let go or on the early difficulties faced by VMware’s channel.
Steven Burke contributed to this story.