Scale Computing CEO On Broadcom-VMware Fallout, Nutanix Competition, Veeam

‘[Broadcom is] focused on their largest customers, and inevitably, probably their most profitable customers. They’ve done things like raise the minimum license count. And their argument has been, ‘Well, everybody uses more cores than that.’ But that’s not true, right? And especially if you look at the edge where you might use a fourth of that or something,’ says Scale Computing CEO Jeff Ready.

Scale Computing personnel and channel partners used last week’s Scale Computing Platform//2025 conference in Las Vegas to reflect what they told CRN in many conversations were negative reactions by partners and customers alike to changes Broadcom made to VMware programs and licensing.

Not that Scale Computing was complaining. The company in several presentations said changes at VMware led to a significant increase in Scale’s TAM, or total addressable market. Broadcom has declined to respond to CRN’s request for comment.

Scale Computing CEO Jeff Ready was actually enthusiastic about the opportunity the Indianapolis-based company feels the alleged customer and partner shift away from VMware presents.

“[VMware has] focused on their largest customers, and inevitably, probably their most profitable customers,” Ready told CRN. “They’ve done things like raise the minimum license count. And their argument has been, ‘Well, everybody uses more cores than that.’ But that’s not true, right? And especially if you look at the edge where you might use a fourth of that or something. These could be very tiny deployments. So there’s a disenfranchised segment from that.”

Ready also said that another VMware and Scale Computing competitor, Nutanix, has some technology and market overlap with his company.

“I think as you look at our go-forward product roadmap, our concept of streamlining application creation and delivery out to the edge is quite different than what you have with Nutanix,” he said. “That said, clearly both companies are benefiting from the Broadcom dynamic.”

There’s a lot going on with HCI, Nutanix, VMware, and Scale Computing. To learn more about how they tie together, read what Ready had to say in this Q&A, which was lightly edited for clarity.

Broadcom acquired VMware, your top competitor, in December of 2023. How have things at Scale Computing changed in the last six months as a result of that acquisition?

There’s a couple of things. One, we continue to see Broadcom make changes to VMware in line with what they’ve always said, but still adversely affect certain customers. They’re focused on their largest customers, and inevitably, probably their most profitable customers. They’ve done things like raise the minimum license count. And their argument has been, ‘Well, everybody uses more cores than that.’ But that’s not true, right? And especially if you look at the edge where you might use a fourth of that or something. These could be very tiny deployments. So there’s a disenfranchised segment from that, and we’ve seen it. Customers who previously thought, ‘Well, maybe I’ll ride it out with VMware,’ suddenly say, ‘Oh, well, maybe not.’

The other thing is continued churn among the channel partners who support those customers. I would say channel partners who support any customers using VMware have been affected in some way, but the channel partners who support midsized customers are the most adversely affected because the pricing changed a lot for those customers. And, despite the occasional language to the contrary, Broadcom has maintained that channel partners have to sign up for certain minimums which are often more than those channel partners do in aggregate across all products. If you’re a small regional or local partner, a $2 million VMware minimum commitment? You can’t do that. The result for Scale has been not only an increasing number of end users deploying on Scale, but also a tremendous number of new partners, 1000-plus, joining us over the last six months. It’s a lot of growth in partners, and we do expect that to continue to accelerate.

How does that tie into Scale Computing’s expanded relationship with data resilience vendor Veeam?

One of the benefits of our partnership with Veeam is it makes migrating to Scale from VMware as simple as just restoring your backup. If you back it up on VMware, you just restore it to Scale and you’re done. …

Veeam, like Scale, serves customers of all shapes and sizes, but they have particular strength in midsize accounts, SMB and midmarket, often smaller accounts than where Scale has played. Scale also has a lot of midmarket strength. It’s very natural that partners who maybe were selling Scale and wish they could sell Veeam but couldn’t in the past now can. It might be a Scale partner who now can sell Veeam, or a Veeam partner who said, ‘Well, what the heck am I going to do about VMware?’ and now can sell Scale. We’re doing that. We’re announcing some joint bundles together so one partner can buy the whole thing. We’re aligning licensing between the companies so that if you buy, for example, a 10-pack license from Veeam, there’s a matching license from Scale.

Outside of VMware, your other biggest competitor is Nutanix, which recently held its Nutanix Next conference. What is your competitive dynamic versus Nutanix?

There was a time when the companies were very similar in terms of the markets we’re going after, but we’ve evolved differently, though. So for all the talk we’ve had here about edge computing and these smaller deployments, Nutanix talks about multi-cloud and that sort of a thing. Can they do some edge stuff? Sure. Can we do some multi-cloud stuff? Sure. There’s some overlap in the middle, but we are focused on different areas. And I think as you look at our go-forward product roadmap, our concept of streamlining application creation and delivery out to the edge is quite different than what you have with Nutanix. That said, clearly both companies are benefiting from the Broadcom dynamic. I don’t have any insights into Nutanix’s numbers, but I would be shocked if they’re not signing up lots of channel partners, too. I’m sure they talked about it at their show. We both benefit from that. Industry guys like Gartner say that hyperconvergence is the number one alternative to traditional VMware. And we both have made moves around support for external storage. Nutanix made a big deal about its support for Dell PowerFlex. We’ve supported external SANs forever. It’s actually fairly common for a customer to run a mix of hyperconvergence and external storage depending on their use case. …

The video surveillance system at Resorts World, where the Scale Computing conference was held, all runs on Scale. It’s a classic example where you ingest video in high demand, and that’s going to run on the HCI stack, but for archival of that video, you’re going to connect external storage to the same platform. People often mistakenly think that it’s one or the other. It’s either HCI or traditional SAN. And that’s not the case. I don’t know enough about Nutanix to say maybe it was the case with them and that changed. But we’ve always had this mixed environment. Most customers typically only have a small number of applications that actually need a SAN. They may need Pure Storage or something like that for some high-performance application that must have that. Or they need cheap bits of cheap SAN, cheap storage, and they can use the HCI for most of it. So a mixed environment. Very commonly, customers are going to use that and use the cloud at the same time. Our ultimate goal really is to abstract away all of the complexity of managing infrastructure so that all the IT team needs to think about is applications and not where they run. They might run in the cloud, the data center, the edge. Is it a virtual machine? Is it a container? These are questions people ask themselves today. Our objective is to get to the point where you’re not asking those questions anymore.

Nutanix just unveiled the ability for businesses to buy its compute side as a separate product for the first time, and then matched it with Pure Storage arrays. Does Scale Computing do anything similar?

We offer a couple of combinations. Obviously, with the compute license there is still some storage on that device. Otherwise, it wouldn’t boot, right? There’s some local storage, but that can be minimal. You can run a tiny amount of storage where all the applications run primarily on the SAN. We offer that, but we typically see more of this, this mixed thing that I was talking about, which I think maybe Nutanix didn’t really do before, which is you run maybe your primary data on the HCI stack and secondary data on the SAN, or vice versa, depending on your use case. And we also support what you might view as the opposite of that, which is to say, ‘I have enough compute power, I just want to add more external storage.’ That’s fine. You can just buy a Scale node which is storage only, and add more storage into the system. So we play it both ways.

How important is hardware to Scale Computing’s sales?

This is something that’s actually changed a lot. Historically, we sold almost exclusively appliances. And the reason was, if you were going to get someone to switch from VMware, you had to catch them when they were doing a full refresh. It was a convenience factor: buy the appliance, the hardware and the software, together. Post-Broadcom, we’re finding customers that maybe bought a server six months ago now want to switch. So we’ve now started to make software-only an option, and Nutanix has gone down the same sort of evolution. You can still buy the appliances from us, but we are also selling more and more of just software.

Have the Trump tariffs had an impact on your hardware business?

Who knows. I think the short answer is, tariffs have not had a big impact on the hardware business, mostly because it’s a moving target. So everything was going to be taxed, and then computers weren’t going to be taxed. Now the impact is more indirect because tariffs do negatively impact our customers’ IT budgets. We sell a lot into, for example, industrial sectors, manufacturing, transportation, etc. If you’re a manufacturer and you import aluminum, and aluminum just went up 150 percent in price, the IT budget probably gets cut. So we’ve saw some choppiness. There’s no shortage of demand because of the Broadcom thing. But some sales are taking longer because of the tariff uncertainties. But then today’s tariff news isn’t tomorrow’s tariff news. So I don’t know.