WWT CEO On ‘Unhappy’ Broadcom VMware Customers Seeking Alternatives And WWT ‘Tripling’ AI Initiatives

‘[Broadcom’s] been an incredibly successful company. They have a strategy and approach that they take. But I can tell you, it’s not sitting well with the majority of the customers—a very large majority. Customers are looking for alternatives,’ says WWT CEO Jim Kavanaugh.

Jim Kavanaugh, CEO of the $20 billion tech powerhouse World Wide Technology, is “tripling down” on AI initiatives, expanding partnerships with AI leaders likes of Nvidia and HPE, and helping “unhappy” VMware by Broadcom customers find alternative solutions.

“There’s a lot of unhappy customers out there just in regards to the approach that VMware-Broadcom has taken,” said Kavanaugh, WWT’s CEO and channel stalwart in an interview with CRN.

“[Broadcom’s] been an incredibly successful company. They have a strategy and approach that they take. But I can tell you, it’s not sitting well with the majority of the customers—a very large majority,” said WWT’s CEO. “Customers are looking for alternatives.”

St. Louis-based WWT is one of the largest solution providers on the planet, ranking No. 7 on CRN’s 2024 Solution Provider 500 list, and is a longtime VMware partner. However, after Broadcom's acquisition of VMware for $61 billion last year, Broadcom implemented significant channel and go-to-market changes including eliminating VMware’s partner program, increasing prices and taking thousands of VMware’s biggest customers direct, to name just a few changes.

WWT is now helping customers who want to work with the new VMware by Broadcom, but also moving many clients off VMware into either the public cloud or VMware alternatives such as Nutanix. Broadcom declined to comment on the matter.

“I will tell you that, I’ve got a couple of executive briefings this week and one of the topics is just this, ‘How do we help our [VMware customers]?’ We have a plan, a methodology and approach to help them think through these things,” Kavanaugh said.

Another major strategy underway at WWT, which has nearly 10,000 employees and more than 55 offices across the globe, is investing significantly in AI initiatives and doubling down on partnerships with the likes of Nvidia. In fact, WWT recently won Nvidia’s 2024 Americas AI Enterprise Partner of the Year award.

“We believe that AI is this massive accelerator of infrastructure and building out these enterprise capabilities,” he said. “I personally think that the generative AI side, the technology side of AI, is going to be the most transformational technology we’ve ever seen in history.”

In a recent interview with CRN, Kavanaugh talked about why WWT is putting a “really unbalanced amount of investment into AI” to succeed in the future as well as what it’s like to do business today with VMware by Broadcom.

What’s your view on VMware right now and what are customers saying? How is doing business with VMware by Broadcom?

It’s a challenge to do business with them. We’re trying to keep an open mind.

We’ve had some discussions with some of the Broadcom leadership. At times, there’s glimmers of maybe opportunity to work together.

But overall, it’s definitely been a challenge. That’s kind of an understatement of what we’re dealing with. We have a lot of customers that are asking for our help, and how do they work through this? And where do they go?

So it’s a challenge. And there’s a lot of unhappy customers out there, just in regards to the approach that VMware-Broadcom has taken.

How are VMware by Broadcom customers feeling right now?

I’m not sitting here throwing stones at anyone on this. Broadcom has been incredibly successful in the way that they go to market.

I’m not sure that would be my way to go to market if I was them. But again, they’ve been an incredibly successful company. They have a strategy and approach that they take.

But I can tell you, it’s not sitting well with the majority of the customers—a very large majority. Customers are looking for alternatives.

So we’re working with them when we can help them, I would say, find a fit with VMware and Broadcom. And where we can’t, we’re trying to work with the customer to find them alternatives that would be viable alternatives for them.

So it’s a challenging space, for sure.

What are the alternatives you’re offering to swap out VMware by Broadcom? Is it public cloud? Is it a type of private on-premise data center?

Yeah, you nailed really what the options are. It’s building out and working with the public cloud providers to actually create capability that would be similar to what VMware was providing.

Another option is looking at a different strategy around containers and open source capabilities.

Looking at other scenarios, it could be a platform like Nutanix.

So there’s options, but it really is specific to the customer environment. What are they specifically doing with VMware? Where do they want to go? How fast do they want to move? And how embedded is VMware in their environment.

But I will tell you that, I’ve got a couple of executive briefings this week and one of the topics is just this, ‘How do we help our [VMware customers]?’ We have a plan, a methodology and approach to help them think through these things.

Where is WWT placing its investing bets in 2024 and beyond to continue your growth and success?

It’s really tripling down on our AI initiatives.

We’re not abandoning any of the things that we’ve been doing. Because we think, the infrastructure side of helping organizations build out their enterprise architecture— from voice to video, data centers, networking, cybersecurity, compute, storage—all of those things are critical to driving customers’ infrastructure to enable AI and do it in a very secure, scalable way.

So we believe that AI is this massive accelerator of infrastructure and building out these enterprise capabilities. The opportunity out there is massive.

We’re putting just a really unbalanced amount of investment into AI around the infrastructure in our labs, in our partnerships, and our advisory, consulting, software development, and data science teams.

Because this is going to play out over the next five to 10 years. This is a long-term play. We’re just scratching the surface in regards to where this is going to go.

How do channel partners not fall behind this AI revolution? How is WWT winning AI deals?

There’s going to be a lot of technology changes throughout and you’re going to have to pay very close attention to some of those things that may come out of a Microsoft or out of an Nvidia or out of others, that are going to need to be incorporated into your strategy.

We’re working with organizations both on the infrastructure side—working with some of the big hyperscalers, working in the space around the emerging Nvidia Cloud Providers and cloud AI as-a-service providers to help them: engineer, architect, build, and deploy their infrastructure.

Then also on the enterprise side, working from an advisory, consulting, software development standpoint. Helping to enable them to leverage their own data sources, creating a unified data strategy and structure that will start populating these RAG [Retrieval-Augmented Generation] models, which will then connect API’s into some of the larger LLMs to leverage their capabilities and services while they build out their on-prem RAG models to drive business outcomes. There’s a lot of complexity that goes into it.

So around AI, there’s just a massive opportunity. But it’s just not simple and it’s not easy.

We’re seeing in some of the enterprise spaces that companies really need help understanding how to implement these AI platforms, and how they’re going to build, design and architect these platforms. And then, how are they going to build out their RAG models to drive those business outcomes. We’re in the very early stages of that.

I personally think that the generative AI side, the technology side of AI, is going to be the most transformational technology we’ve ever seen in history.