VMware Reboots Partner Program Again: Smaller Cloud Providers Face Uncertain Future

In a move that has sent shockwaves through the virtualization industry, VMware has announced the second major overhaul of its partner program in just 18 months, effectively ending the current channel program and transitioning to a new invitation-only model that will exclude many smaller cloud service providers. The announcement, which came with little advance warning, represents another significant disruption for an ecosystem already reeling from Broadcom’s aggressive restructuring since acquiring VMware in November 2023.

The Latest Partner Program Shake-Up

According to information first disclosed by Australian IT service provider Interactive, VMware has notified partners that its current Broadcom Advantage Partner Program will terminate on October 31, 2025, to be replaced by a new invitation-only VMware Cloud Service Provider (VCSP) program launching November 1^[1]. The changes are far-reaching and will fundamentally alter the landscape for VMware partners and their customers.

The new program significantly reduces the number of authorized partners, with VMware adopting a highly selective approach that prioritizes larger, more established cloud service providers. Partners who did not receive invitations by July 15, 2025, have been notified of non-renewal and will be unable to sign new commitment contracts or renewals after the October deadline^[2]. This represents a dramatic consolidation of VMware’s partner ecosystem, continuing a trend that began with Broadcom’s acquisition.

Perhaps most significantly for smaller operators, VMware is also sunsetting its white-label program on the same October 31 deadline. This program, introduced in March 2024 as a response to community concerns about partner cuts, allowed smaller cloud service providers to operate through larger authorized partners^[3]. Its elimination removes the last lifeline for many small-to-medium cloud operators who have built their businesses around VMware technology.

Impact on Customers and Partners

The implications for customers whose current providers are being excluded from the new program are substantial and immediate. Interactive’s analysis warns that affected customers can expect disruptions to their ability to renew licenses through existing partners, changes to support and service quality, potential delays and confusion during renewals, and likely cost increases due to reduced competition and bundling options^[4].

The human cost of these changes is perhaps best illustrated by a Reddit user who described their organization’s predicament after learning their white-label partner would be excluded. The user, whose organization spends approximately £300,000 ($402,500) annually on VMware licensing, expressed astonishment at having just six months to design and build an entirely new multi-region virtualization platform to support millions in revenue, followed by an additional 12 months to migrate all VMware clients ^[5].

This scenario is being replicated across thousands of organizations worldwide, as Broadcom’s partner consolidation strategy forces rapid and costly migrations. The Register reports that VMware had over 4,000 small cloud service provider partners before Broadcom’s acquisition, with hundreds already excluded from previous program changes^[6].

Broadcom’s Strategic Rationale

Broadcom has consistently defended its partner program changes as part of a broader strategy to drive “simplification, consistency, and innovation” across the VMware ecosystem. In a statement to The Register, the company explained that it is “focusing more and going deeper with the VCSPs who have demonstrated commitment to their cloud services built on VMware” to deliver “greater value, stronger execution, and a more streamlined experience”^[7].

This approach aligns with Broadcom’s broader vision for VMware Cloud Foundation 9.0, which the company positions as underpinning “a small number of hyperscale private cloud platforms in each region”^[8]. The strategy represents a fundamental shift from VMware’s historically inclusive partner ecosystem toward a more exclusive model focused on large-scale deployments and enterprise customers.

In March 2025, Broadcom outlined its redesigned partner program philosophy, emphasizing a points-based system that rewards partners based on bookings (70% of points) and technical expertise (30% of points)^[9]. The company claimed this approach was developed based on extensive partner feedback gathered over 12 months since the VMware acquisition, though the latest round of exclusions suggests that feedback may not have been universally positive.

Industry Reaction and Broader Implications

The response from industry analysts and experts has been largely critical, with many questioning whether Broadcom’s aggressive partner consolidation strategy is sustainable. Gartner VP analyst Michael Warrilow told The Register that “Broadcom seem intent on destroying what was one of the most successful partner ecosystems in the industry”^[10]. Similarly, Sumit Bhatia, co-author of “Navigating VMware Turmoil in the Broadcom Era,” predicted that the partner cuts would result in higher pricing for VMware customers^[11].

These concerns are supported by mounting evidence of customer dissatisfaction and migration away from VMware. The Register has reported that Japanese technology giant Toshiba decided to move from VMware to Nutanix after receiving a Broadcom licensing quote that was ten times their previous cost ^[12]. Similar stories of dramatic price increases, ranging from 150% to 500%, have become commonplace since Broadcom’s acquisition^[13].

The timing of the partner program changes is particularly challenging given the broader context of Broadcom’s VMware strategy. The company has simultaneously implemented significant licensing changes, including the elimination of perpetual licenses in favor of subscription-only models, increased minimum core requirements from 16 to 72 cores, and the consolidation of numerous product SKUs into simplified bundles^[14]. These changes, combined with partner program disruptions, have created a perfect storm of uncertainty for VMware customers.

The Path Forward

For organizations affected by these changes, the options are increasingly limited and expensive. Customers of excluded partners must either migrate to authorized VMware cloud service providers—likely at higher costs due to reduced competition, or consider alternative virtualization platforms entirely. The latter option has gained significant traction, with enterprises increasingly evaluating solutions from Microsoft (Hyper-V), Nutanix, Red Hat, and open-source alternatives like Proxmox and KVM^[15].

The broader implications extend beyond individual customer decisions to the fundamental structure of the virtualization market. Broadcom’s strategy appears designed to maximize revenue from large enterprise customers while accepting the loss of smaller accounts that may not meet its profitability thresholds. This approach has proven financially successful in the short term, with Broadcom reporting 124% growth in net income following the VMware acquisition^[16].

However, the long-term sustainability of this strategy remains questionable. By systematically excluding smaller partners and customers, Broadcom risks creating a significant market opportunity for competitors while potentially damaging VMware’s reputation for reliability and partnership. The company’s repeated partner program changes, twice in 18 months, have created an atmosphere of uncertainty that may accelerate customer defections regardless of technical merits.

VMware’s latest partner program reboot represents more than just another business restructuring; it signals a fundamental transformation of one of the technology industry’s most successful ecosystems. While Broadcom’s focus on larger, more profitable relationships may deliver short-term financial gains, the human and business costs of these rapid changes are substantial and far-reaching.

For the thousands of organizations and partners affected by these changes, the next few months will be critical. The October 31 deadline leaves little time for complex migrations and business restructuring, while the limited number of authorized partners in the new program may struggle to absorb the displaced customer base. As the virtualization landscape continues to evolve, VMware’s aggressive consolidation strategy may ultimately prove to be a catalyst for broader market transformation, potentially benefiting competitors who can offer the stability and partnership that many VMware customers now find lacking.

The ultimate test of Broadcom’s strategy will be whether the benefits of a more focused, profitable partner ecosystem outweigh the costs of market disruption and customer dissatisfaction. For now, the industry watches as one of technology’s most established partnerships models undergoes its most dramatic transformation in decades.

References

[1] The Register. “Small clouds out as VMware again changes partner program.” July 16, 2025. https://www.theregister.com/2025/07/16/vmware_reboots_partner_program_again/
[2] Interactive. “Changes to Broadcom VMware’s Partner Program.” July 15, 2025. https://www.interactive.com.au/news/broadcom-closing-vmware-partners-program/
[3] Ars Technica. “More VMware cloud partners axed as Broadcom launches new invite-only program.” July 16, 2025. https://arstechnica.com/information-technology/2025/07/more-vmware-cloud-partners-axed-as-broadcom-launches-new-invite-only-program/
[4] Interactive. “Changes to Broadcom VMware’s Partner Program.” July 15, 2025.
[5] Reddit. “VMware by Broadcom VCSP program is closing. Thousands of customers affected.” July 15, 2025. https://www.reddit.com/r/sysadmin/comments/1m11ci6/vmware_by_broadcom_vcsp_program_is_closing/
[6] The Register. “Small clouds out as VMware again changes partner program.” July 16, 2025.
[7] Ibid.
[8] Interactive. “Changes to Broadcom VMware’s Partner Program.” July 15, 2025.
[9] Broadcom News. “Redesigned Broadcom Partner Program Delivers More Value to Partners and Customers.” March 18, 2025. https://news.broadcom.com/partners/redesigned-broadcom-partner-program-delivers-more-value-to-partners-and-customers
[10] The Register. “Small clouds out as VMware again changes partner program.” July 16, 2025.
[11] Ars Technica. “More VMware cloud partners axed as Broadcom launches new invite-only program.” July 16, 2025.
[12] The Register. “VMware customers ‘Infuriated’, ‘disappointed’ and migrating.” May 8, 2025. https://www.theregister.com/2025/05/08/vmware_migrations_why_nutanix/
[13] Network World. “Dutch court forces Broadcom to support VMware migration after 85% price hike backlash.” July 1, 2025. https://www.networkworld.com/article/4015489/dutch-court-forces-broadcom-to-support-vmware-migration-after-85-price-hike-backlash.html
[14] Redress Compliance. “Broadcom VMware Licensing Changes Explained.” July 9, 2025. https://redresscompliance.com/broadcom-vmware-licensing-and-subscription-changes-explained/
[15] Ace Cloud Hosting. “Top 11 VMware Alternatives 2025: Comprehensive Guide.” May 5, 2025. https://www.acecloudhosting.com/blog/top-vmware-alternatives/
[16] Network World. “Broadcom grows profit by 124% following VMware purchase, as customers fume about subscription costs.” June 6, 2025. https://www.networkworld.com/article/4003371/broadcom-grows-revenues-by-20-following-vmware-purchase-as-customers-fume-about-subscription-costs.html