CEO Jeff Ready: Broadcom-VMware backlash is 'blowing up' and Scale Computing is capturing it with a 'rip and replace' programme

Scale Computing CEO Jeff Ready is stunned by how Broadcom is "burning" the VMware channel. The "Rip and Replace" program could eventually persuade Scale to switch manufacturers. Competitor Nutanix is also benefiting from the chaos at VMware.

Scale Computing CEO Jeff Ready said there is a Broadcom-VMware ‘Rip and Replace' surge taking hold among partners and customers.

"It is just blowing up," said Ready. "It's hard to stay ahead of the inbound requests from VMware partners and end users looking to move to Scale. It is a four-times increase sequentially month to month [in inbound inquires] and an eight- to 10-times increase from a year ago."

Scale Computing is moving aggressively to capture the Broadcom VMware customer and partner windfall with a VMware "Rip and Replace" promotion that gives partners a 25 per cent discount on any VMware licensing that moves to Scale Computing. "That is margin for the channel," said Ready.

For end-user customers, Scale Computing has agreed to match the equivalent price of the existing VMware licensing contract, said Ready. "What that means is the end user does not have to take a financial risk to move to Scale," he said. "We are making it easy for both customers and partners to move to Scale."

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

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, with not only the best technology but the best partner and customer experience.

"What I am looking to establish now is we are the best company to work for both for the end user and most importantly the partner," he said.

"Because it is obvious to me that Broadcom doesn't know how a partnership should actually work. Because if they did, they wouldn't just throw these guys out. It is just insane to me."

CEO Jeff Ready: Broadcom-VMware backlash is 'blowing up' and Scale Computing is capturing it with a 'rip and replace' programme

Scale Computing CEO Jeff Ready is stunned by how Broadcom is "burning" the VMware channel. The "Rip and Replace" program could eventually persuade Scale to switch manufacturers. Competitor Nutanix is also benefiting from the chaos at VMware.

What is Scale Computing seeing with regard to partners and customers wanting to move off VMware?

"It is just blowing up. It's hard to stay ahead of the inbound requests from VMware partners and end users looking to move to Scale. It is a four-times increase sequentially month to month [in inbound inquires] and an eight- to 10-times increase [in inbound inquiries] from a year ago. This is people reaching to us inbound on their own in absence of marketing programs or anything special. We are seeing 10 to 20 partners a day inquiring with us about moving business to Scale from VMware.

"We are seeing a lot of partners that went all in on VMware feel like they got burned and are now looking at Nutanix and Scale with a spot for both of us. I see partners that don't want to go all in on either of us because they don't want to get burned again.

"There are spots where there are some overlaps between Nutanix and us, but there is also a lot of differentiation. When you look at the midmarket that we have always openly embraced and edge computing, we have a lot of strength there. But we also do a lot in the enterprise. Obviously, different partners define enterprise different ways."

CEO Jeff Ready: Broadcom-VMware backlash is 'blowing up' and Scale Computing is capturing it with a 'rip and replace' programme

Scale Computing CEO Jeff Ready is stunned by how Broadcom is "burning" the VMware channel. The "Rip and Replace" program could eventually persuade Scale to switch manufacturers. Competitor Nutanix is also benefiting from the chaos at VMware.

Scale Computing has always championed a 100 per cent channel go-to-market model. How do you feel about what you are seeing from VMware?

"Everything that is happening is awesome for Scale, and I'm thrilled about that. We are 100 percent channel. But from a personal standpoint, 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 just getting [burned]. It makes me angry for them.

"Obviously, Broadcom is not VMware culturally and it is not like the founders of VMware are still there. But it pains me to see partners who have built a whole business around VMware and basically made VMware what it is today just tossed out like yesterday's garbage. That's just crazy to me.

"But we are here to help. We have programs in place now for partners who are bringing customers over from VMware. We've got significant discounts for those partners [Scale Computing is offering a 25 per cent discount on Scale Computing Software and Services and Advanced Training and Certification]. We are also providing free tools to do those actual migrations from one platform to the next. For the end users, we are extending free Scale licensing equivalent to whatever you have left on your VMware contract."

CEO Jeff Ready: Broadcom-VMware backlash is 'blowing up' and Scale Computing is capturing it with a 'rip and replace' programme

Scale Computing CEO Jeff Ready is stunned by how Broadcom is "burning" the VMware channel. The "Rip and Replace" program could eventually persuade Scale to switch manufacturers. Competitor Nutanix is also benefiting from the chaos at VMware.

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

"We are giving partners a straight-up 25 per cent off the top discount on licensing for any customer coming from VMware. That is margin for the channel.

"We are also providing the tools to provide the migration for free. They get those tools for free.

"For the end user we are extending our licensing to be equivalent to what they have remaining on their licensing. What that means is the end user does not have to take a financial risk to move to Scale. We are making it easy for both customers and partners to move to Scale.

"The customer that has a boss that doesn't understand technology at all can now go to that boss and say, ‘We have to get off VMware. Here are the reasons. But we have a solution and we are not going to lose money,' That is what the boss is always worried about. So we are covering the customer. They are not going to lose money [moving to Scale].

"So we are going to partners telling them, ‘Look, we have got a programme in place to incentivise you to bring customers to Scale, and we have got a programme in place to give you the tools to do it. So everybody wins. The customer doesn't lose money. They can save face. They don't get [burned]. The partners come over and they can experience Scale for the first time. Or if they have been here before that is fine too. Bring those customers over. Everybody wins. That is how we built that programme."

CEO Jeff Ready: Broadcom-VMware backlash is 'blowing up' and Scale Computing is capturing it with a 'rip and replace' programme

Scale Computing CEO Jeff Ready is stunned by how Broadcom is "burning" the VMware channel. The "Rip and Replace" program could eventually persuade Scale to switch manufacturers. Competitor Nutanix is also benefiting from the chaos at VMware.

What do you do in the case of VMware perpetual licensing?

"So if the customer has a perpetual license the customer has a support contract. We'll just bring over the equivalent. We'll make it work. If you have a year of support, we'll bring that over. If you are on a subscription model and have x years remaining on it bring it on over to us.

"I have not seen this level of activity of ‘We have got to get off of this product' ever before. I have personally been up into the wee hours every night, weekends included, over the last two weeks responding and reaching out to partners and customers inquiring about Scale.

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

"I had an inquiry from a small company in northern Wisconsin that runs three VMware hosts with 14 virtual machines. I sent him a note and introduced myself and told him, ‘Welcome to the Scale family. I know my team is on it, but if you have questions any time let me know.' What we are telling customers and partners is: ‘Welcome to the Scale family.'

"Partners have customers that are feeling somewhere between uncertainty and panic over what is happening. They don't know what to do. They may not know Scale or VMware—end customers don't always know who the vendors are—but I have told partners I'm happy to get on the phone with customers. That's fine. I'll do 500 calls a week if I have to.

"I take this personally. I built Scale from the ground up. I have built other companies from the ground up. I have been running companies since I was 11. I have had employees since I was 13. I have been these smaller businesses. I have been that many times.

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

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

"Broadcom broadcast all of this in the beginning. They said they had their top customers and that is what they were going to focus on. So are they going to have the world's greatest tech support for this little three-VMware-host in Wisconsin? No. That is going to be garbage if anything."

CEO Jeff Ready: Broadcom-VMware backlash is 'blowing up' and Scale Computing is capturing it with a 'rip and replace' programme

Scale Computing CEO Jeff Ready is stunned by how Broadcom is "burning" the VMware channel. The "Rip and Replace" program could eventually persuade Scale to switch manufacturers. Competitor Nutanix is also benefiting from the chaos at VMware.

What is the ultimate impact going to be on Scale Computing's revenue?

"It's really hard to predict because it is changing so fast. But this has been a significant tailwind for us all through 2023. Obviously, the [Broadcom acquisition of VMware] transaction took a long time to close. Since it has happened and since the changes to the channel have taken place, it has just blown up. We are signing up hundreds of partners to move to Scale and probably when it is done thousands of partners."

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

"We are all in on this. We spent three months building the 2024 plan at the end of 2023 and we scrapped the whole thing. That's because we are all in on VMware partners and customers moving to Scale.

"We have always been from the beginning positioned as a VMware alternative. But there has been no time like this. Because now it is not only just the technology. And I would argue we have the best virtualisation and HCI technology. Look at how partners view us in the CRN ARC Awards. What I am looking to establish now is we are the best company to work with for both for the end user and most importantly the partner. Because it is obvious to me that Broadcom doesn't know how a partnership should actually work. Because if they did, they wouldn't just throw these guys out. It is just insane to me.

"I look at all the time and effort we put into building our channel so far and maintaining our reputation by not taking deals away from partners, managing conflict and all the things we had to do to make the channel successful and they just come in and pretend like none of that exists and it is their way or the highway.

"There are alternatives and Scale is one of them. I know the partners out there will not only be thrilled by our technology, support and all the product fundamentals but they will be even more thrilled on how we approach the channel and doing business with us."