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VMware Cloud on AWS now sold exclusively by Broadcom

Broadcom discontinues AWS as a reseller of VMware Cloud on AWS, further evidence that it wants hands-on control of how the VM technology is sold, supported and distributed.

Broadcom is now the sole seller of VMware Cloud on AWS after it eliminated sales of the service through AWS or third-party channel partners.

Hock Tan, Broadcom president and CEO, confirmed the change in a May 6 blog post. He said the move continues Broadcom's goal to collapse VMware offerings and features into a handful of subscriptions with set pricing and billing.

"There have been false reports that VMware Cloud on AWS may be going away, which is causing unnecessary concern for our loyal customers who have used the service for years," Tan wrote.

Broadcom may be following its stated objectives for VMware, but it still has to combat a negative consumer perception following its purchase last November, according to cloud industry analysts.

Tan stated in the blog post customers who purchased VMware Cloud through AWS or a third-party reseller, "will now work with Broadcom or an authorized Broadcom reseller to review their subscriptions and expand their environments."

The blog sought to clarify VMware and AWS user grousing earlier this month that the service could be discontinued entirely, said Sig Nag, an analyst at Gartner. Even with the service remaining, existing VMware customers could be considering alternatives, he said.

"Tan's rectifying misconceptions people have about it. That memo says we're here to stay," Nag said. "[But] customers may be concerned about the viability of their own VMware relationships. Some VMware competitors may be getting phone calls."

Customers with active one- or three-year subscriptions with AWS will still be billed by AWS until the subscription ends.

Broadcom clouds above

VMware Cloud on AWS, a joint service offered by AWS and VMware, is the only hyperscaler cloud offering for VMware Cloud Foundation (VCF), a private cloud platform managed by VMware, according to a Broadcom spokesperson. The service provides VCF capabilities within AWS but is managed through a customer's VMware console for hybrid cloud virtualization.

AWS will continue to support VMware Cloud on AWS but will no longer resell the services, according to a statement from AWS.

"We are disappointed that AWS is no longer operating as a VMware Cloud on AWS reseller but continue working closely with Broadcom to serve our mutual customers," read the statement. "We remain committed to helping customers take full advantage of the best cloud services for their business, including VMware Cloud on AWS."

VMware Cloud on AWS launched in late 2017 and offered tighter integration with AWS services, said Gary Chen, an analyst at IDC. It also debuted cloud features ahead of other VMware offerings in other clouds, including Azure VMware Solution, Google Cloud VMware Engine and the Oracle Cloud VMware Solution, he said.

These other offerings are managed and billed by the respective cloud providers, and likely won't experience a similar change, Chen said.

[Broadcom] makes changes and they make them immediately.
Gary ChenAnalyst, IDC

Broadcom's approach is to be expected after prior acquisitions by the company, he said, and the amount of legal clearance needed for the merger gave Broadcom time to consider its subscription-focused strategy.

"[Broadcom] makes changes, and they make them immediately," Chen said. "The [VMware] acquisition has been in the works for a while, and they had a long time to analyze the business plan."

AWS isn't letting the changes pass by without an attempt to win over some customers. The company now offers AWS VMware Migration Accelerator with discounts through 2024.

"AWS is going to win either way," Chen said. "They're still going to get their pound of flesh."

Customer reception to the change has developed after Broadcom's history with other acquisitions, including CA Technologies and Symantec, according to Scott Sinclair, an analyst at TechTarget's Enterprise Strategy Group. Those acquisitions resulted in employee cuts and product changes.

"[Customers] have to negotiate with Broadcom now, not AWS," Sinclair said. "The fact that this [negative] perception exists is reasonable."

Some customers are still in a holding pattern when it comes to VMware decisions, Chen said. If they decide the virtualization technology is worth maintaining, they will have to adjust from the hands-off approach VMware took in the past with third-party sellers.

"[Broadcom] really likes direct account control," Chen said. "In the past, VMware has been very channel-centric and hands off, while Broadcom wants to be hands-on and more involved."

Tim McCarthy is a news writer for TechTarget Editorial covering cloud and data storage.

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