Broadcom is ditching its lowest tier VMware Cloud Foundation (VCF) reseller partners and program tier in the latest move by the vendor in revamping its VMware sales channels around what it terms partners that are “committed” to the cause.

Brian Moats, SVP for global commercial sales and partners at Broadcom, in a blog post bluntly explained that the vendor was “reducing the number of partners authorized to resell VMware solutions in the Americas, and Asia-Pacific and Japan regions.” The cuts are targeted at allowing Broadcom to focus on “those partners who are committed to delivering the transformative customer experience around VMware solutions, as demonstrated by their historical performance levels, technical and other relevant expertise, and ability to make the investments necessary to offer customers the levels of service they expect and deserve.”

This culling will work through Broadcom’s elimination of the “Registered” tier of its “Broadcom Advantage Partner Program for VMware Resellers,” will now just entail the “Pinnacle, Premier, and Select” tiers.

“The Registered tier is being retired, as the vast majority of customer impact and business momentum comes from partners operating within the top three tiers,” Moats claimed.

Moats also wrote that Broadcom was “raising the bar” on the remaining tiers. This includes Pinnacle partners being required to be part of an advanced deployment and support program; Pinnacle and Premier partners must maintain dedicated sales and technical resources, and work directly with VMware on product delivery and support; that all remaining partners maintain “active and in good standing” or risk being cast aside.

“As we streamline our partner ecosystem, some customers will need to transition to a new partner relationship. That’s why the partners selected to move forward with Broadcom will carry a greater responsibility and a higher standard of performance,” Moats explained. “We’re entrusting this focused group with a broader set of customers and, in return, expect them to lead with excellence, operate at scale, and deliver real impact on the journey to a modern private cloud.”

Broadcom’s European channel untouched

Notably absent from the geographic pruning was Broadcom’s European operations that recently garnered a “red” status ranking from European Union regulators for potentially violating EU competition regulations. That warning was specifically tied to Broadcom’s recent changes to the reward structure of its partnership program that “force partners to choose between being a service provider or a reseller. It is common in Europe for CPS to play both roles, thus these new requirements are a further harmful restriction on European cloud service providers’ ability to compete and serve European customers.”

The European Cloud Competition Observatory (ECCO), which conducted the survey that was commissioned by the Cloud Infrastructure Services Providers in Europe (CISPE), also noted that Broadcom further clouded the ecosystem’s licensing paradigm last month with a not-so-subtle blog post by Moats pointed at legacy VMware channel partners that have so far resisted Broadcom’s numerous attempts to get them on board with its new program, and has reportedly initiated legal proceedings against some legacy VMware customers over the new licensing terms.

“CISPE members fear that these actions speak to the overall behavior of Broadcom in the market, and that they too will soon face litigation if they do not accept imposed terms,” the ECCO report states.

Reseller rollercoaster

Broadcom’s latest reseller move continues what has been a contentious 18 months for VMware’s legacy sales channel partners. Those channels were initially rocked by a complete revamping of VMware’s program to fit under Broadcom’s structure, which caused considerable consternation.

Broadcom had initially attempted to soothe over those concerns, but more recently has struck a sterner tone.

CEO Hock Tan last year also pointed to past abuse by some of its reseller partners “stating that the new program ended “upsell practices that were common in the software industry before the subscription transition, such as branding incremental features as new higher editions of the same product or new add-on products. These practices do not represent true innovation in core products, and cause customer confusion and frustration about missing out on new features. Subscription licensing eliminates these incentives.”

The vendor last month warned of program changes, noting those that don’t will “struggle to find a place in the Broadcom partner ecosystem.”

Krish Prasad, SVP and GM for Broadcom’s VMware Cloud Foundation (VCF) division, explained in a blog post that the vendor expects “that our partners will go all-in with us on helping customers unlock the full value of VCF.”

“Partners that are not committed to investing in and evolving their businesses to help customers adopt and succeed with VCF will struggle to find a place in the Broadcom partner ecosystem,” Prasad added. “As we head into the second half of 2025, we intend to put greater emphasis and focus on these value-based solution providers. We believe this is the right path forward, not just for Broadcom, but for every customer who relies on VCF to run their digital infrastructure with speed, agility, and security.”

Equity research firm William Blair noted in an “Enterprise Tracker” report earlier this year that some enterprises and go-to-market partners were continuing to look for ways to de-couple themselves from Broadcom and VMware. The report stated that value added resellers (VARs) had noted “customers are actively strategizing how to get off VMware, and the broader ecosystem (VARs, OEMs, ISVs) is moving away from VMware.”

That last point was bolstered by the research firm noting “newfound disillusionment from partners about Broadcom squeezing them on margins,” with a specific “partner that historically could expect to make 10 to 15 points of margin on reselling VMware is now making only 5 to 6 points.”

Despite the consternation, Broadcom’s arguments are convincing many enterprises to stay with the vendor. Tan noted during Broadcom’s most recent earnings call that 70% of its largest 10,000 customers have now adopted the newly evolved VCF platform. That was considerable progress from the 4,500 large customers Tan said had signed on for the VCF platform at the end of the previous quarter.