Broadcom is damaging the VMware channel and creating opportunities for channel partners pushed to the quitting point. That’s the view of hyperconverged infrastructure systems vendor Scale Computing’s founder and CEO, Jeff Ready, whose outfit is positioning itself to pick up these resellers and service providers.
Blocks & Files: What is your general view of the effect of Broadcom’s acquisition of VMware on the hyperconverged infrastructure market’s users, both large and small?
Jeff Ready: Overall we’re seeing Broadcom do exactly what was expected. Wasn’t it you who, early on, reported Broadcom’s stated focus as being on their top 600 customers?
Blocks & Files: How do you think this will affect the edge market for HCI products and systems?
Jeff Ready: The edge was not VMware’s strong suit before, and we’ve seen edge as an area where customers were open to change and were actively seeking new innovation. That is still the case, and it’s even stronger now. But post-acquisition, I’m seeing this same rekindled desire for innovation span the whole spectrum, from edge to datacenter to cloud, at a level I’ve not seen there previously.
Blocks & Files: How will the Broadcom channel changes affect partners?
Jeff Ready: Broadcom has effectively blown up its channel program and stated they were taking the most profitable customers direct. I think their wording was something like “strategic customers are no longer available for opportunity registration,” which is a convoluted way of saying, “We’re stealing your customers.”
The channel is what built VMware, so for any partner in that ecosystem, it must feel like a knife in the back. The small and medium-sized partners are treated like yesterday’s trash, and the big partners are robbed at gunpoint. That’s far beyond just being channel-unfriendly; it’s downright channel-hostile. This is another private equity-style move. A profit-driving one, perhaps. But it’s not what a company focused on future growth and innovation would do, and it feels downright cringy to me. It’s a Wolf of Wall Street approach, not a Jobs-and-Wozniack one.
Blocks & Files: What could disaffected partners do in response?
Jeff Ready: There’s an opportunity for partners to build an entire practice around migrations off of VMware – I’m certainly seeing customer demand for it all across the spectrum. Some customers will stay where they are, of course, but there are ample numbers of customers who are looking for a return of innovation that was already languishing with VMware even before the deal, and is now likely dead entirely.
And all this is happening at a time when we are seeing a return of on-premises computing, whether in the form of edge computing, or even basic datacenter/server room-type computing. Some workloads just run better and/or cheaper outside the cloud. With the right tools, customers can manage their entire environment as one, regardless of where the workloads are. Once you can manage the whole thing as one, you just run the apps wherever they make the most sense.
So for partners, this return of on-premises computing along with the rise of applications using AI, GPU, and computer vision – these are areas where traditional value-added partners can help customers. When you add the Broadcom-VMware deal on top of that backdrop, it’s fuel to an already burning fire of opportunity. Partners can help customers benefit from these new technologies and trends, while also rekindling their own businesses.
Blocks & Files: How would you describe the HCI market and its suppliers now that Broadcom has acquired VMware and Cisco is partnering with Nutanix?
Jeff Ready: VMware alternatives like us at Scale Computing, and like Nutanix, all benefit from the Broadcom deal. As I said, we’ve seen a huge increase in interest from both customers and partners. I’m talking about an order-of-magnitude change in just a few weeks’ time. It’s hard to overstate that tectonic shift. The Cisco-Nutanix partnership doesn’t change the overall industry much. Cisco Hyperflex stalled out some time ago, and now there’s an opportunity to replace Hyperflex as well as VMware. We’re seeing some benefit from Cisco’s retirement of Hyperflex ourselves, and of course Nutanix sees it, but the Cisco-retiring-Hyperflex impact on the industry is dwarfed by the Broadcom-acquires-VMware impact.
Blocks & Files: Is HPE a presence in your part of the HCI market?
Jeff Ready: For us, HPE is now more of a partner than a competitor. We will rarely still see a SimpliVity deal that is competitive, but not nearly as often as it used to be. What we do see are customers who want to run Scale Computing software on HPE hardware or who want to use other Scale Computing systems with HPE networking, for example. Those are now more cooperative opportunities than they are competitive.
Blocks & Files: Has Quantum buying Pivot3’s assets been a factor in Scale’s deals with customers and prospects?
Jeff Ready: No, not at all. I assume Quantum has moved that technology in a completely different direction. We’ve picked up some Pivot3 customers for sure, but I don’t know if there are any Pivot3 infrastructure customers left now.
Blocks & Files: Do you think generative AI will influence your market and product strategy and in what way?
Jeff Ready: For sure. And AI broadly even more so – computer vision and so forth. All of this typically uses GPU and sometimes CPU, both of which are quite expensive in the cloud, not to mention the requirements for collecting and moving massive amounts of data. We’re seeing these kinds of applications being deployed on-premises – on the factory floor where robots produce data about parts, or in the retailer where cameras can optimize employee productivity or enhance the customer experience.
These are great use cases for edge computing, which we’ve embraced and have been innovating in for years – and we’re only at the very beginning of that trend. We’re helping customers put in place an edge infrastructure that can be managed at scale when and how future needs dictate.