Dive Brief:
- Broadcom touted success in moving enterprise customers to the VMware Cloud Foundation private cloud platform during a Thursday earnings call, less than a week after eliminating the bottom tier of its technology partner program.
- The tech giant has converted 87% of its 10,000 largest customers to the VCF bundled offering since finalizing the $61 billion VMware acquisition in November 2023, according to CEO Hock Tan. “The momentum from strong VCF sales over the past 18 months since the acquisition of VMware has created annual recurring revenue, otherwise known as ARR, growth of double digits in our core infrastructure software,” Tan said.
- Broadcom’s infrastructure software segment revenue increased 25% year over year, accounting for $6.6 billion of $15 billion in total Q2 2025 revenue, CFO and Chief Accounting Officer Kirsten Spears said during the call. The company’s semiconductor segment yielded $8.4 billion, accounting for 56% of total quarterly revenue.
Dive Insight:
Broadcom shook up the VMware ecosphere in the year following the acquisition, rolling out major changes to the virtualization software company’s product line, licensing policies and pricing model. Bundling thousands of individual offerings into an integrated private cloud alternative to hyperscaler services was central to the strategy.
“Customers are increasingly turning to VCF to create a modernized private cloud on-prem, which will enable them to repatriate workloads from public clouds while being able to run modern container-based applications and AI applications,” Tan said Thursday.
The company identified a surge in private cloud interest among 1,800 IT decision-makers surveyed by research firm Illuminas in a report published last month. More than half of respondents said deploying new workloads in private cloud in the next three years was a priority and one-third had already shifted some public cloud workloads to an on-prem platform.
“Organizations feel that public cloud spending is getting out of hand and they're rethinking their cloud strategy, repatriating workloads onto the private cloud to drive better security and cost predictability,” Prashanth Shenoy, VP of product marketing in the VCF division at Broadcom, said during a May briefing.
After an initial post-acquisition shock to the VMware partner ecosystem, which required more than 18,000 resellers to shift to the Broadcom Advantage program, the company leaned on partnerships to help drive VCF adoption earlier this year.
Broadcom’s partner network received another jolt on June 1, when the company reduced the number of authorized VMware resellers in the Americas and Asia-Pacific and Japan regions.
“To enable more focused investment and deeper support for those partners, we are streamlining the Broadcom Advantage Partner Program for VMware Resellers from four tiers to three,” Brian Moats, SVP, global commercial sales and partners at Broadcom, said in a blog post.
The change eliminates the Registered tier, which contained “a large number of partners with minimal engagement,” Laura Falko, head of global partner programs, marketing and experience at Broadcom, said in a Friday email. “By removing that tier, we are concentrating our support, resources, and incentives around partners who are actively investing in technical certifications, consulting practices and outcome-based services.”
Broadcom has given affected partners 60 days to close open customer accounts.
The company declined to specify the number of partners or customers impacted, but Falko said the company is actively managing the transitions. “We’ve provided our field and distribution teams with the tools and visibility to ensure continuity for customers,” she said, adding, “This is not a shift away from the channel, it's a move to ensure that every customer interaction is handled by a partner who can deliver real value in a modern, cloud-first IT environment.”
