Dell is ending its preferential relationship with VMware after the latter was acquired by Broadcom

Dell ends its joint market entry agreement with VMware. This agreement came about when Dell spun off VMware in 2021. This made VMware more independent, but Dell continued to treat the company as a preferred partner. A common sales strategy then seemed to benefit both companies and customers.

No more licenses

Now Dell is terminating that agreement. The timing is no coincidence. After a long saga, VMware has now been acquired by Broadcom, which immediately thwarted the virtualization specialist’s offer. The most important change is the abolition of licenses: from now on, customers can only purchase VMware solutions as part of a subscription formula.

This caused dissatisfaction among both customers and manufacturers such as Dell. Finally, they can no longer sell their hardware with a bundled license, which is beneficial for everyone involved. Since Dell can no longer act as a reseller of VMware, the server specialist no longer benefits from a common market strategy.

Formal ending only

The 2021 agreement could be blown up by both parties if one changes hands. This requirement is certainly met with the sale of VMware. Just because the formal agreement is now over doesn’t mean Dell is suddenly giving up on VMware. The virtualization offering remains relevant and it seems unlikely that Dell will actively promote the competition immediately. It shows that Dell is not happy with the licensing strategy adopted by Broadcom.