In a regulatory filing today, Dell disclosed that it has terminated its agreement to distribute VMware products. The deal was made in November 2021, before VMware was acquired by Broadcom. The Register reports: The deal was signed on the same day Dell and VMware parted ways. That's when Big Mike's Bespoke Computer Barn decided to pay off some of its debt by making Virtzilla an independent company. In the distant past, Dell was still fully committed to VMware. As such, the agreement between the two companies called for “formalizing the commercial relationship between the parties in order to maintain the mutual strategic advantage between Dell and his VMware.” [and] This is to confirm both parties' interest in continuing to collaborate on solutions and go-to-market (GTM) strategies. ”
The agreement added: “Regarding certain technologies and GTM activities, the parties' respective products and services will better work together to create benefits and value for customers.” Nothing has changed that would make such collaboration any less beneficial for our customers. That means nothing more than Broadcom's decision to stop allowing manufacturers like Dell to resell licenses for his VMware products. This is a result of the semiconductor giant's plan to stop selling VMware perpetual licenses and instead stick to software subscriptions that bundle many products. This decision was met with great frustration, both from his OEM who would lose a revenue line and from his customers, who much preferred purchasing licenses bundled with hardware as it was often more efficient than purchasing them separately. Not accepted. Dell's filing said the original agreement allowed for the VMware distribution agreement to be terminated following a “change of control” by either party. His acquisition of VMware by Broadcom represents just such an event.
