- Broadcom gives 1,500 of its 2,000 biggest customers back to channel partners
- The company hopes partners will be able to offer customers better deals
- It’s all in an effort to stop losing VMware customers
According to new information revealed by Ars Technica, Broadcom has reversed its plans to take its 2,000 biggest customers directly, instead taking just 500 and leaving channel partners to pick up the rest.
It’s believed that Broadcom is branding the change as one that will drive additional value for money to customers through partner-driven deals, which it hopes will keep customers using its services rather than looking to migrate.
Since its acquisition of VMware a little over a year ago, Broadcom has caused uproar in the virtualization world by implementing a series of changes it said were meant to simplify its portfolio, but the reality has been increased costs for many customers.
Some of the changes affecting customers have included the company’s decision to end perpetual licenses and move to subscription-based models, the bundling of multiple products into fewer (and more expensive, in some cases) SKUs, and the termination of the channel partner program.
Broadcom’s decision to reintroduce channel partners is likely a strategic move to help it maintain business and not lose any more customers.
The firm said in a statement: “We announced a program that is currently in development to offer qualified VCF customers a 15 percent professional service entitlement of their annual contract value to access partner-delivered or Broadcom professional services. This will help customers improve both time to value and ROI.”
Speaking about the change, Canalys Chief Analyst Alastair Edwards said that Broadcom handing back 1,500 big customers back to channel partners and giving its channel 15% of the value of deals they win would be its best defense against potential migrations.
However, posting on LinkedIn, Edwards said that Broadcom CEO Hock Tan’s efforts to “strip out layers of cost and complexity” have so far “come at the expense of customer and partner relationships.”