Broadcom’s Partner Cull: Is IBM Cloud A VMware Casualty?

This announcement from IBM Cloud about the cessation of new VMware on IBM Cloud sales is a massive indicator of the Broadcom effect on the partner ecosystem. I view this as an extraordinarily clear signal that Broadcom’s strategy is achieving its intended goal of radically consolidating its channel. The text explicitly cites changes to the Broadcom VCSP partner program as the reason IBM is no longer permitted to sell licenses to new customers without an active workload. That is a truly amazing position for a hyperscaler like IBM to be in, and it demonstrates how Broadcom is forcing the issue to shape the entire market. You can read the full details here.

Broadcom is architected to deliver a simplified and more focused go-to-market model built around its new, invite-only Pinnacle Partner tier. By reducing the number of authorized partners, Broadcom aims to deepen its relationship with a select group, giving them a greater share of the private cloud opportunity around VMware Cloud Foundation (VCF). IBM Cloud, despite its scale and historical significance as a major VMware partner, appears to have been caught in the crossfire—or perhaps deliberately excluded from the most privileged new tier for its general VMware-on-cloud offerings. It’s a very unusual state of affairs.

For IBM, this move effectively puts a hard stop on acquiring new customers for a foundational hybrid cloud offering. Their historical pitch around hybrid cloud has always involved the ubiquity and familiarity of VMware as a bridge from the datacenter to the public cloud. This constraint weakens that bridge for new VMware engagements. They still have their own Red Hat OpenShift platform as a core hybrid offering, which has its own strengths in containerization, virtualization (i.e., virtual machines), and cloud native development, but losing the ability to onboard net new VMware customers directly impacts the breadth of their portfolio. Customers will need to look to other hyperscalers or authorized VCSPs if they want to move new VMware workloads to the cloud.

Existing IBM Cloud customers with an active VMware workload before the October 31, 2025, deadline can breathe a sigh of relief, though not completely. They are permitted to continue using and expand their existing environments. This is a critical distinction, as it prevents an immediate rush to exit the platform. However, the restrictions placed on their expansion and consumption models are quite punitive. Customers cannot order a different VMware offering. If they are using the popular VCFaaS offering, they face geographical and consumption limitations—no expanding to a new region, no switching between on-demand and reserved models. It essentially locks them into their current configuration footprint, reducing their future architectural and financial flexibility. It's not a complete vendor lock-in, but it is certainly a vendor handcuff.

This does not appear to be an IBM decision, but a mandated consequence. Why would Broadcom remove one of its largest VCSP partners from its program? One can only assume Broadcom is being very straightforward: you meet our new, high-bar VCSP criteria and focus on VCF, or you are severely limited in what you can sell. This change will force customers to make difficult platform decisions much sooner than they expected, which is a glorious mess for competitors. The level of detail and restriction outlined in the notice is a testament to the control Broadcom is taking over the go-to-market strategy.