Ingram Micro axes Broadcom: No longer ‘doing business’
As of early January 2025, Ingram Micro will no longer be doing business with Broadcom and have limited engagement with VMware in select regions. Neither are material to our business,’ the world’s second largest distributor said in a statement to CRN.
The world’s second largest technology distributor, Ingram Micro, has dropped Broadcom from its lineup after it failed to reach an agreement with the chipmaker and software company and will limit the sale of VMware licenses and products.
"We were unable to reach an agreement with Broadcom that would help our customers deliver the best technology outcomes now and, in the future, while providing an appropriate shareholder return,” Ingram Micro said Monday in a statement provided to CRN.
The distributor said that beginning in January 2025 “Ingram Micro will no longer be doing business with Broadcom and have limited engagement with VMware in select regions.”
One longtime VMware partner who transacts through Ingram Micro learned of the coming change four weeks ago.
“The distributors are not the issue. Broadcom is,” said the solution provider CTO via email, asking not to be named in order to speak candidly about his experience working with Broadcom since it acquired VMware in November 2023.
“They need to empower their distributors to be able to make quotes or Broadcom should double their sales force if they want full control of every quote that is requested by a partner or end user. … The average is four weeks from deal [registration] and request to [distributor] for a quote.”
That process used to take as little as two days prior to the acquisition, the CTO said.
“Prior to the acquisition it was two to three days,” the executive said. “It was one to two weeks once quoting was available in the summer and went to four to five weeks in November. We are just [now] getting quotes requested the week of November 4.”
The Broadcom partner, which holds VMware Master Competencies, was already in the process of changing to another distributor, but the executive is not hopeful his company will have a better experience.
“We are switching from Ingram to Arrow for our Broadcom business but expect it to be just as painful,” the source said.
The Register first reported the news.
“Broadcom doesn’t have anything to add to this story,” the company said in a statement to CRN.
After publication Monday, Broadcom reached out to CRN with a more detailed statement. In it, the company called Ingram Micro a “valued partner” but said it wants to create “deeper relationships with fewer distributors.”
“While Ingram has been a valued partner, our evolving business priorities and the need for a more streamlined and focused distribution network have necessitated this change,” a Broadcom statement read.
“We remain deeply committed to our customers and partners and are taking proactive steps in an effort to ensure a seamless transition and continued support for all stakeholders in all geographies.”
Ingram Micro said the business it transacted with Broadcom is not material to its revenue.
“For us and the more than 1,500 vendors and [161,000] customers we work with, the future of business is focused on transforming relationships, not just transacting sales,” according to the statement.
“We are hyper-focused on our customers and removing friction from our business and theirs. So whether our customers want a new source or a new solution entirely, we are here to smoothly and successfully transition the tech and continue growing our business together.”
Broadcom stock is sailing high on chip sales and expected AI chip sales, which as a stand- alone business could drive revenue to between $60bn and $90bn, based on conversations it has had with its three leading customers, the company said in its most recent earnings call Thursday.
VMware revenue under the first full year of Broadcom ownership was up 3.3 per cent to $13.8bn in the most recent quarter. In its final year of independent ownership, VMware achieved $13.35bn in revenue. Quarter-to-quarter revenue was flat for VMware, with revenue contributing $3.8bn in revenue for the quarter.
Broadcom closed on the deal to buy VMware over a year ago following a fraught, 17- month sales process in which the chipmaker’s $69 billion deal was heavily scrutinised by regulators.
Broadcom’s chipmaking business is still operating under an agreement in the US and UK that allows regulators to inspect its books due to several years of what they said were “illegal” sales practices investigators brought to light in 2021.
This article originally appeared on CRN UK sister website CRN.