Dell Terminates Distribution Deal With VMware After Broadcom Acquisition

In a regulatory filing today, Dell revealed that it has terminated its distribution deal for VMware products. The deal was made in November 2021 before VMware was acquired by Broadcom. The Register reports: That agreement was struck on the same day Dell and VMware parted ways -- back when Big Mike's Bespoke Computer Barn decided to pay down some debt by making Virtzilla a standalone company. In those far-off days, Dell was still all-in on VMware, which is why their agreement sought to "formalize the commercial relationship between the parties in order to maintain the mutual strategic advantage between Dell and VMware [and] to affirm the parties' interest in continuing to collaborate on solutions and a go-to-market (GTM) strategy." The agreement added: "With respect to certain technologies and GTM activities, the parties' respective products and services work better together to create advantages and value for customers." Nothing has changed that would make such collaboration less beneficial for customers. Nothing, that is, other than Broadcom's decision to stop allowing manufacturers like Dell to resell licenses for VMware's products -- a consequence of the chip giant's plan to stop selling perpetual VMware licenses and instead insist on software subscriptions that bundle many products. That decision has not been well-received -- neither by OEMs, who lose a line of revenue, nor by customers who quite liked buying bundled licenses with hardware because doing so is often more efficient than buying them separately. Dell's filing cites the original agreement's allowance for its VMware distribution deal to be dissolved after a "change of control" at either party. Broadcom's acquisition of VMware certainly represents such an event.

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