“Price is a factor, but it’s really more like taking the whole package, which is the price, the known stagnation, the changes to support all of that, and bring it across the table to the customer that you might be dealing with. be taken decades. it builds trust,” Nutanix’s Dave Gwyn tells CRN.

The reverberations that began to shake the virtualization market in May 2022, when Hock Tan announced it would buy VMware and fold it into chipmaker Broadcom, have not stopped shaping customer conversations in the years since, Nutanix’s head of channel recently said, Dave Gwyn, for CRN.

“For many Nutanix partners, I think the Broadcom VMware situation remains front and center,” Gwyn said.

Gwyn said VMware’s service provider community was hit hard by the changes Broadcom put in place when it completed its $69 billion acquisition of the virtualization company in 2023. The new owners cut off the ability of some partners to sell licenses directly to customers. In addition, Broadcom has combined products that customers may not need with products that they rely on to drive sales of the entire stack.

“Price is a factor, but it’s really more like taking the whole package, which is the price, the known stagnation, the changes for support, and bringing it across the table to your customer with whom it would have taken decades to develop trust . Gwyn said.

CRN has reached out to Broadcom for comment.

Market research firm Forrester predicts that in 2025, VMware’s top 2,000 customers will shrink their VMware deployments by an average of 40 percent as a result of Broadcom’s changes in how virtualization is brought to market.

“Increased migration to the public cloud, on-premise alternatives and new architectures will drive this reduction. Despite firm interest in private cloud due to digital sovereignty and cost concerns, VMware continues to face challenges,” the researchers wrote in a report last month.

The researchers pointed out that in its first quarter under Broadcom, VMware’s revenue fell by $600 million due to reallocation of assets, divestment and customer losses due to high-priced renewals and unfavorable new terms.

“Broadcom’s price increases and cost-cutting measures are expected to boost its net profits, with few credible competitors able to help customers replace VMware virtualization,” Forrester found. “Technology leaders should follow our advice in evaluating alternatives to VMware, taking into account how they manage their VMware investments and those alternatives.”

Nutanix’s market cap has risen 500% since Broadcom announced its intention to buy VMware in May 2022. Nutanix shares traded today at $71.09, with a market cap of $19.14 billion. Nutanix shares closed at $16.88 with a market cap of $3.78 billion on May 27, 2022.

Gwyn hopes that disgruntled VMware customers can now find an alternative and an answer for their future ownership of Nutanix.

“Where Nutanix is ​​now, and where we find these customers who are troubled by the Broadcom situation, you have to say to them, ‘Hey, it’s time to look at getting rid of VMware,’ but it’s also a time to say, ‘Maybe this this is when this should be the catalyst for the full upgrade, where I go, OK, I need all of the above,” he said.

Here’s CRN’s conversation with Gwyn edited for length and clarity:

Where are you seeing traction with Nutanix for Nutanix partners? Is it around this product group?

Product bundling is just an abstraction of price gouging. What they’re really doing is saying, Hey, you have to pay 3x, but hey, you get this package.

So yes, this is still a problem, but it’s just a different word for the price problem. They’re actually just hitting them with a different way of licensing to make it less possible for them to buy just the component they need.

Now, as far as we’re concerned, we have to try to accommodate those customers, and just because a customer is looking at a tough offer … that doesn’t mean they can very easily say, “OK, fine, we’re just going to switch . ‘

What does that sales cycle look like for Nutanix when they meet a VMware customer ready to switch?

Each is at a different stage of their implementation, and so you have hardware running on them that may not be suitable for Nutanix.

Maybe we have to wait for amortization schedules, or we have to show enough value that they’re willing to drop an amortization schedule early.

Or maybe they start their migration partially, rather than fully, and just say, “Hey, as it depreciates, we’ll start upgrading.”

What we’re really seeing is that this is not just a hey, you know, we used to have a virtualization platform called VMware. Now we will switch virtualization platforms. That’s not where the world is now. And actually virtualization for most of our customers is almost like, it’s almost like legacy at this point. Everyone makes containers. It’s all about Kubernetes.

How does Nutanix support this?

We made an acquisition earlier this year, now we’ve launched, it’s called NKP, the Nutanix Kubernetes Platform.

This is no small news to us. If your IT staff are college graduates, young computer science degree holders, not all of them think in terms of virtual machines. That’s old school, right?

The new school is containers, microservices, and cloud-native deployments.

Where Nutanix is ​​now, when we find these customers who are troubled by the Broadcom situation, you have to tell them, ‘Hey, you know, it’s time to look at getting rid of VMware,’ but it’s also a time to say, ‘ Maybe this is when this should be the catalyst for the full upgrade,” where I go, OK, I need all of the above. I’m not just changing my virtualization platform, because who cares.

NKP, however, to us is the true enterprise Kubernetes. It is the ability to manage and deploy large-scale container deployments based on Kubernetes.

There is an addition to that called the NDK, which is Nutanix Data for Kubernetes. And this is a unique thing.

When you deploy Kubernetes applications, they often don’t have a very good way to store their data.

So you end up with these application agility challenges, because it’s not just the containers moving, you have to think about the data and what needs to change based on where you’re moving.

The NDK aims to simplify this. Right now, you can use local data that, whether it moves with the application, and you know, the data doesn’t have to move with the application, but the data methodology can move with the application, and you just say, hey, this application is going to work exactly the same way no matter where you run it because the NDK is in it as a complement to the NKP.

How big is the container opportunity here for partners, and do you present that as container versus hypervisor? Do you still talk to partners in these terms?

No, I mean, I’m speaking from my organization. I do not find that we separate the two subjects so precisely. In other words, it’s more of an upgrade conversation for me, right? These two things coexist.

In anything larger than the average business, you will have both. You will have applications running exclusively on virtual machines and a VM environment. You will have applications running exclusively on Kubernetes in a containerized environment, but I think for the most part it will be a single organization managing all of the above.

So if you go into a company that, back to the initial part of this conversation, is looking like, “Oh my God, we’re really getting hit hard by this Broadcom thing. And wow, we’re running on a three-tier architecture.

And then, you know, Nutanix comes along and says, “Well, you know, you should really consider AOS, and our Acropolis hypervisor is a great alternative to ESXi, isn’t it?

And they say, “OK, well, does this work on our three-tier architecture?”

“Well, no, it doesn’t work on three levels.” We are hyperconverged. And this is our story. Hyperconverged infrastructure. But you should, you should upgrade.

And then it’s like, “Well, but if I’m upgrading, then I’d go in the direction of the container. I would use Kubernetes.

And my Nutanix sales reps have to say, “Yes, you should be.”

So it completes the whole story.

It doesn’t have to exist separately.

So there’s an opportunity in the Nutanix partner ecosystem for partners looking to grow their container capabilities, it seems?

It is, and it puts them in the best position to step in as a thought leader and help a client struggling with what to do next. Or they may realize: Is now the time to make a bigger decision? And if you’re well-versed in the new and the old, then you can really offer some insightful thinking about what’s the right thing for them now.

Also implement some changes to the affiliate program. Can you tell me about it?

The biggest change to our partner program this year is that we’ve added a new tier. We have a new tier called premier. We had three tiers previously and we had a lot of people that were clustered at the top of our partner program.

I wanted to have a truly elite level as opposed to a crowded upper level. So we created this new premier level for those partners who are really like all in.

You’re going to get bigger discounts and just better incentives for all the different things that we’re trying to push, like the new logo and the autonomous behavior and things like that.

I deliberately didn’t make a lot of other changes, because one of the things that really drives us inside is that I have these four things that I hammer. I’m talking about when you know, when we’re a good partner to our partners, we want to have four main things: profitability, product, long-term commitment and trust. These are all four criticisms. I also say that if any of these do not exist, then the relationship breaks.