Dell returns to VMware after all, other OEMs also sign up

Dell returns to VMware after all, other OEMs also sign up

VMware, which Broadcom has been running as the new owner for over six months now, has signed resale agreements with three major hardware vendors: Dell, HPE, and Lenovo. This means these OEMs can continue to offer hyperconverged systems and servers pre-installed with VMware’s comprehensive virtualization stack even under the new terms.

The return (or contract renewal) of these hardware companies is a major victory for VMware by Broadcom. The company will continue to have a notable presence in the hyper-converged infrastructure market integrating computing, storage, and network virtualization. For Dell, HPE, and Lenovo, retaining the ability to offer preset systems with VMware is also no bad thing for their product portfolio and is a way to keep their customer base happy.

Tip: Broadcom makes concessions after criticism and extends perpetual VMware support

Dell ended its distribution agreement with VMware in January of this year after the latter made extensive changes to its product licensing policy and partner programme under the new Broadcom ownership. By signing this new deal, the two companies are reviving their longstanding relationship.

This will allow Dell to continue offering once jointly developed solutions such as VxRail, vSAN Ready Nodes, PowerEdge servers and PowerFlex software-defined infrastructure. Dell has publicly confirmed the deal, HPE and Lenovo have not. However, according to The Register, these two companies have also signed on the dotted line.

Higher prices, more value?

A lot has changed since Broadcom acquired VMware. Broadcom turned away a majority of VMware’s CSPs and announced a new partner programme. The new conditions only allowed for the most lucrative customers to remain. VMware’s product licenses were adjusted, which some saw mainly as a price increase, although Broadcom maintains that these changes offer more value.

Incidentally, the company backtracked in some areas, as we reported on at length in our liveblog. Some of Broadcom’s plans were implemented quickly, others needed more time, while others were shelved or took a different form.

Either way, as companies consider purchasing new servers with the latest manycore CPUs from Intel and AMD, they must reevaluate their financial models. Closing these deals with OEMs will perhaps make VMware by Broadcom an attractive option for the enterprise customer base again. Most major customers renewed their contracts just before the acquisition and can continue under old terms for the next three to five years anyway.

Also read: VMware customers want to migrate away – not all of them can