March 4, 2024

The reaction between Broadcom and VMware is “exploding” and Scale Computing is capturing it with a “rip and replace” program

Scale Computing CEO Jeff Ready says his company is moving aggressively to capture the windfall for Broadcom VMware customers and partners with a VMware “Remove and Replace” promotion.


Scale Computing CEO Jeff Ready said an increase in Broadcom-VMware’s “rip and replace” strategy is taking hold among partners and customers.

“It’s just exploding,” Ready said. “It is difficult to stay ahead of incoming requests from VMware partners and end users looking to migrate to Scale. That’s a four-fold increase sequentially month over month. [in inbound inquires] and an increase of eight to ten times compared to the previous year.”

Scale Computing is moving aggressively to capture the windfall for Broadcom VMware customers and partners with a VMware “Rip and Replace” promotion that offers partners a 25 percent discount on any VMware licenses that move to Scale Computing . “That’s margin for the channel,” Ready said.

For end-user customers, Scale Computing has agreed to match the equivalent price of the existing VMware license agreement, Ready said. “What that means is that the end user doesn’t have to take a financial risk to move to Scale,” he said. “We’re making it easier for both customers and partners to move to Scale.”

Scale Computing has signed up hundreds of partners looking to move into the enterprise and expects to potentially move thousands of partners to its virtualization platform, Ready said.

Ready said he is on a mission to show partners and customers frustrated with the VMware experience that Scale Computing is the best company to do business with, not only with the best technology but also the best experience for partners and customers.

“What I’m looking to establish now is that we are the best company to work for, both for the end user and, most importantly, for the partner,” he said. “Because it’s obvious to me that Broadcom doesn’t know how a partnership should really work. Because if they did, they wouldn’t just throw these guys out. “It’s just crazy to me.”


What does Scale Computing see regarding partners and Do customers want to leave VMware?

It’s just exploding. It is difficult to anticipate incoming requests from VMware partners and end users looking to migrate to Scale. That’s a four-fold increase sequentially month over month. [in inbound inquires] and an eight to 10 times increase [in inbound inquiries] since a year ago. These are people who approach us on their own, without marketing programs or anything special. We see 10-20 partners a day asking us about moving business to Scale from VMware.

We are seeing that many partners who bet on VMware are feeling burned and are now looking at Nutanix and Scale with a place for both. I see partners who don’t want to bet on any of us because they don’t want to get burned again.

There are points where there is some overlap between Nutanix and us, but there is also a lot of differentiation. When you look at the mid-market that we’ve always openly embraced and edge computing, we have a lot of strength there. But we also do a lot in the company. Obviously, different partners define the company in different ways.


Scale Computing has always advocated a 100 percent channel go-to-market model. What do you think of what you’re seeing at VMware?

Everything that’s happening is fantastic for Scale and that excites me. We are 100 percent canal. But from a personal point of view, it makes me angry. I know these partners. There are some mega partners like WWT that are affected by this, but the vast majority of partners are barely getting [burned]. It makes me angry for them.

Obviously Broadcom is not VMware culturally and it’s not like the VMware founders are still there. But it pains me to see partners who have built an entire business around VMware and basically made VMware what it is today being thrown away like yesterday’s trash. That’s crazy to me.

But we are here to help. We now have partner programs that bring in VMware customers. We have important discounts for those members. [Scale Computing is offering a 25 percent discount on Scale Computing Software and Services and Advanced Training and Certification]. We also provide free tools to make those actual migrations from one platform to the next. For end users, we are extending the free Scale license to the remainder of your VMware contract.


What specifically are the discount terms of the Scale Computing VMware Rip and Replace program?

We offer partners a direct 25 percent discount off the maximum licensing discount for any VMware customer. That is margin for the channel.

We also provide the tools to perform the migration for free. They get those tools for free.

For the end user, we are extending our license to be equivalent to what is left on your license. What that means is that the end user does not have to take a financial risk to move to Scale. We’re making it easier for both customers and partners to move to Scale.

The customer who has a boss who doesn’t understand anything about technology can now go to that boss and say, “We have to leave VMware.” Here are the reasons. But we have a solution and we are not going to lose money.’ That’s what always worries the boss. So we are covering the customer. They are not going to lose money. [moving to Scale].

So we’re going to say to partners, ‘Look, we have a program in place to incentivize you to bring customers to Scale, and we have a program in place to give you the tools to do that. So everyone wins. The client does not lose money. They can save face. they do not understand [burned]. Members come and can experience Scale for the first time. Or if they’ve been here before, that’s fine too. Bring those clients. Everyone wins. That’s how we built that program.


What is done in the case of VMware perpetual licenses?

So if the customer has a perpetual license, they have a support contract. We will simply bring the equivalent. We will make it work. If you have a year of support, we will add it. If you have a subscription model and have x years left, bring it to us.

I’ve never seen this level of ‘We have to get off this product’ activity before. Personally, I’ve been up until the wee hours every night, including weekends, for the past two weeks responding and communicating with partners and customers asking about Scale.

Obviously, we have many employees and teams that do this and can handle it. But I’m personally trying to establish that things here at Scale are very different for these partners and customers versus Broadcom-VMware.

I received an inquiry from a small business in northern Wisconsin that runs three VMware hosts with 14 virtual machines. I sent him a note, introduced myself and said, ‘Welcome to the Scale family.’ I know my team is on it, but if you have questions at any time, let me know.’ What we say to our customers and partners is: “Welcome to the Scale family.”

Partners have clients who feel between uncertainty and panic about what is happening. They do not know what to do. They may not know Scale or VMware (end customers don’t always know who the vendors are), but I’ve told partners that I’m happy to talk to customers on the phone. Alright. I will make 500 calls a week if necessary.

I take it personally. I built Scale from scratch. I have created other companies from scratch. I have run companies since I was 11 years old. I’ve had employees since I was 13 years old. I’ve been in these smaller companies. I’ve been so many times.

Partners are getting [burned] and it makes me angry. So first Broadcom said the smaller partners are too small for us to work with and then they turn around and say we’re going to take on all the big accounts directly.

So what is happening to end users? That small business, that medium-sized company or that construction company with 500 people in Toledo? They are the ones who are going to get totally [burned]. Not only are their prices going to change, but their local partner, also a smaller midsize company, is getting [burned]. So what will that tech support experience be like now? The writing is on the wall.

Broadcom broadcast all of this at the beginning. They said they had their main clients and that was what they were going to focus on. So will they have the best technical support in the world for this little three VMware host in Wisconsin? No. That’s going to be rubbish anyway.


What will be the ultimate impact on Scale Computing’s revenue?

It’s really hard to predict because it’s changing so quickly. But this has been a major tailwind for us throughout 2023. Obviously, the [Broadcom acquisition of VMware] The transaction took a long time to close. Since it happened and since the channel changes happened, it just exploded. We are signing up hundreds of partners to move to Scale and probably, when it’s done, thousands of partners.

Has there ever been a better time to move to Scale in terms of the investment you’re making to move customers and partners?

We are all involved in this. We spent three months building the 2024 plan at the end of 2023 and scrapped it all. This is because we are all interested in VMware partners and customers moving to Scale.

We have always positioned ourselves from the beginning as an alternative to VMware. But there has never been a moment like this. Because now it’s not just about technology. And I would say we have the best virtualization and HCI technology. See how partners view us at the CRN ARC Awards. What I’m looking to establish now is that we are the best company to work with for both the end user and, most importantly, the partner. Because it’s obvious to me that Broadcom doesn’t know how a partnership should really work. Because if they did, they wouldn’t just throw these guys out. It’s just crazy to me.

I look at all the time and effort we’ve put into building our channel so far and maintaining our reputation by not taking deals away from partners, managing conflicts and all the things we had to do to make the channel successful and they just come and pretend . as if none of that existed and was his way or the highway.

There are alternatives and Scale is one of them. I know that partners will not only be excited about our technology, support and all the fundamentals of the product, but they will also be even more excited about the way we approach the channel and do business with us.

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