Broadcom cuts off the VMware reseller it steered customers to last year

Broadcom cut off the reseller it nominated

Insight Enterprises, an $8.2 billion Chandler, Arizona reseller, has lost its right to sell VMware licenses and Broadcom-funded VMware Cloud Foundation services in North America, CRN reported on 28 September 2026 ¹. Insight confirmed it in a statement↗: the company is "no longer authorized to resell VMware licenses or Broadcom-funded VCF Entitlement Services in North America," and will finish client-funded VMware work by 31 October 2026 ¹².

A year earlier Broadcom pointed the other way, emailing customers of partners it had just deauthorized toward Insight, SHI International and Connection as national resellers for a "smooth transition" ¹². Broadcom declined to comment ². The deauthorization rests on one report: the only follow-up coverage opens "Per CRN" ².

The software annuity is underwriting the AI promise

VMware has no revenue line of its own; Broadcom reports it inside the Infrastructure Software segment ¹. That segment took in $8.75 billion in the quarter ended 2 August 2026, up 29 percent↗, while AI semiconductor revenue of $16.7 billion, up 221 percent, took the headlines ³. Hock Tan is guiding AI revenue to double to $115 billion in fiscal 2027 and again to $230 billion in fiscal 2028 ⁴⁸.

Broadcom is eating its channel to feed the annuity, and the annuity is underwriting the AI promise.

Fewer partners, faster software growth

Since buying VMware for $69 billion in November 2023, Broadcom has taken the top 2,000 accounts direct and cut the partner count from roughly 30,000 to about 18,000, sources told CRN, while shifting customers to per-core subscriptions with price increases CRN reported at 200 to 400 percent and sometimes more ¹. The software segment accelerated anyway: up 1 percent in the quarter ended 1 February 2026, 9 percent in the quarter ended 3 May 2026, then 29 percent in August ³⁵⁶.

Gartner is counting the exits

Partners shown the door now have an incentive to show customers the exit. Gartner's September Magic Quadrant for distributed hybrid infrastructure↗ assumes 55 percent of enterprises will start proofs of concept for alternatives to their VMware-based deployments by 2029, up from 25 percent this year, and calls the Broadcom acquisition a "massive catalyst" for migration ⁷¹. "They are going to try to replace VMware," one solution provider chief executive told CRN ¹.

Loyalty pays, say the loyal

Broadcom's most committed partners say concentration works. "You both have to be all in," said Ryan Sheehan of SHI, whose VMware business is "benefiting greatly" ¹. Comdivision chief executive Yves Sandfort expects an 80 percent increase in VMware revenue this fiscal year↗ ¹². Insight itself calls the deauthorization Broadcom's "strategy to narrow its partner ecosystem," not a verdict on its capabilities ¹². The segment numbers, so far, side with Broadcom.

31 October is the tell

Insight, No. 21 on CRN's 2026 Solution Provider 500, holds what one channel executive called "hundreds of existing accounts" ¹. Where those renewals land after 31 October, with World Wide Technology and AHEAD or inside a rival's proof of concept, will first show in Broadcom's quarter ending early February 2027, reported the following March ⁵. The channel's question, in the words of one chief executive: "who is the next partner to get voted off the island" ¹.