Australia’s Macquarie Telecom signed a multi-year deal with Broadcom that will see the channel partner invest nearly $20 million to help offset recent VeloCloud SD-WAN price increases enacted by Broadcom, a move that comes as questions swirl around VeloCloud’s future.

The Macquarie deal is a four-year arrangement that will see the high-ranking VeloCloud channel partner offer and support packages of hardware, licensing, managed services, carriage, and customer service to Australian enterprises. The telecom service provider explained that the financial investment will support “the greatest discounts available, helping to offset Broadcom’s recently enacted price rises.”

“Partners will be working with a local provider that operates in Australian dollars, providing better price certainty given the risk of fluctuating exchange rates and changes in vendor pricing,” Macquarie Telecom noted, with segment leader Tony Emmanouil adding, “this agreement empowers us to deploy a wide range of VeloCloud solutions, ranging from licensing to fully managed services to best suit different partners across Australia.”

Macquarie’s price increase reference is tied to changes Broadcom has layered across its VMware operations since closing on that acquisition in late 2023. The broad stroke of those changes has been in eliminating VMware’s legacy perpetual license options in favor or a subscription-based model.

Analysts have noted that this change has resulted in some legacy VMware customers being hit with a large spike in VMware usage costs.

“One VMware client shared that they’re experiencing a 500% price increase based on their current use of VMware products and how it maps to the new licensing and packaging,” Forrester Research noted in a report last year.

Broadcom late last year rolled those changes into VeloCloud’s legacy partner program. The new VeloCloud partner program – ambitiously titled “Titan” – includes different program tiers that Broadcom has been layering across the altered VMware partner program landscape. Macquarie Telecom states it’s the program’s only “Pinnacle” partner in Australia.

Sanjay Uppal, VP and GM of Broadcom’s Software-Defined Edge division, explained in a press briefing at the time that the new VeloCloud program was announced that the changes followed Broadcom’s stated push of simplified licensing portability.

“Previously, what we would say is, if you're a partner then you have to identify which end enterprise that you're providing these licenses to,” Uppal said. “With the new Titan partner program, that's going to be simplified so you can actually port licenses from one to another, not across geographies, but in the same geography.”

This aligned with license portability changes that have drawn considerable consternation from long-time VMware customers used to perpetual licenses.

Uppal also noted that the new program is also focused on simplifying service interactions with its networking products and services, like VeloCloud.

“The back and forth used to be for small numbers of edges, but we are now coalescing them together so that typically on monthly or quarterly boundaries we add it all together so that you have much easier way of transacting business with us at Velo than you would have in the past,” Uppal said.

Is VeloCloud for sale … or sold?

The Macquarie agreement comes as reports suggest Broadcom is in the process of selling VeloCloud to Arista Networks for $1 billion. The move would unload the VeloCloud business that has increasingly seen its shine blocked by Broadcom’s growing focus on VMware’ private cloud and artificial intelligence aspirations.

VeloCloud had been lauded as one of the SD-WAN market’s leading providers. Broadcom executives have claimed more than 50,000 SD-WAN VeloCloud access points have been deployed. Gartner in a report last year added that the platform was serving approximately 21,000 enterprise customers, boosted by deep product capabilities, strong market share, and strong market understanding.

However, Gartner did caution on Broadcom’s customer experience, product roadmap that was more catchup than market leading, and concerns over Broadcom’s future SD-WAN plans tied to the VMware integration.

Broadcom has bolstered VeloCloud with the launch and updates to its artificial intelligence-focused VeloRAIN platform, and has launched a handful of new VeloCloud-infused end-user devices. These have been targeted at Edge applications.

VeloCloud could bolster Arista’s moribund WAN efforts. The vendor did enter the WAN space through its CloudVision Pathfinder Service in early 2023, but has since shifted focus toward its AI networking efforts. Adding VeloCloud could reinvigorate those efforts.