IBM Transfers Hundreds of VMware Cloud Customers to Partner 11:11 Systems
As Broadcom tightens its partner network, IBM has offloaded hundreds of VMware cloud contracts to 11:11 Systems ahead of upcoming licensing deadlines.
Key points
- IBM sold hundreds of VMware Cloud Foundation customer contracts to 11:11 Systems.
- Broadcom requires partners to focus exclusively on private cloud stacks by October 2025.
- :11 Systems will migrate these customers to its own VMware-powered infrastructure.
IBM has transferred contracts for hundreds of its VMware cloud customers to 11:11 Systems, a Broadcom partner, according to The Register. This transaction occurs as Broadcom reshapes its partner ecosystem, forcing many former resellers to exit the VMware channel or find new wholesale arrangements before strict deadlines arrive.
11:11 Systems CEO Brett Diamond confirmed the acquisition of contracts for customers running VMware Cloud Foundation versions 7 and 8. These organizations are described as large multinationals and Fortune 5000 companies that prefer to remain on VMware technology. Diamond stated that no other hypervisor currently handles mid-to-large enterprise workloads as effectively.
Broadcom’s Partner Strategy Shift
Under Broadcom’s ownership, VMware has drastically reduced the number of cloud partners it retains. The company now only works with partners that commit fully to the Cloud Foundation private cloud stack. Partners not selected for this new model lost the right to resell VMware software as of October 2025. Additionally, these excluded partners may not run VMware-powered clouds after March 2027.
IBM was previously a top VMware partner but stopped selling new cloudy VMware services last year. This move suggested that IBM was not invited to continue as a Broadcom partner. Consequently, IBM had to arrange for its existing customers to be managed by remaining partners or wholesalers like 11:11 Systems.
Customer Migration and Impact
Sources indicate that soon-to-be-former VMware partners often have contractual obligations to provide services beyond the March 2027 cutoff. Their customers prioritize non-disruptive transitions. One option for departing partners is selling ongoing service contracts to remaining Broadcom partners. Another option is turning to wholesalers like 11:11, which operates its own VMware cloud infrastructure.
11:11 Systems possesses 40 to 50 points of presence for its VMware cloud. The company plans to apply a specific migration methodology to the customers acquired from IBM. Diamond expressed confidence that these newly acquired customers will choose to stay with 11:11 due to their reliance on VMware’s enterprise capabilities.
IBM did not respond to questions regarding the transaction. The Register also requested information about some customers who are not moving to 11:11 Systems, but IBM provided no comment on those specific cases or the broader sale.
What should you do?
Organizations using VMware Cloud Foundation should verify their current service provider’s status as a Broadcom partner. Check if your vendor is committed to the private cloud stack required after October 2025. Review your contracts for clauses related to the March 2027 operational cutoff. Monitor communications from your provider regarding migration plans to ensure continuity.
What to do and how to stay safe: IBM
- Verify if your current VMware cloud provider is an active Broadcom partner authorized to resell after October 2025.
- Review your service contracts for specific obligations or migration clauses related to the March 2027 deadline.
- Confirm whether your provider has a concrete migration methodology for moving your workloads to a compliant partner.
- Assess if your organization’s workloads can be supported by alternative hypervisors if VMware support becomes unavailable.
General security guidance from the Threat Times newsroom. It is not confirmed advice from the organisations named in this story.
Frequently asked questions
Why is IBM selling its VMware cloud customers?
IBM stopped selling new cloudy VMware services last year and appears to no longer be an active Broadcom partner, necessitating the transfer of existing contracts.
When do non-compliant partners lose resale rights?
Partners not retained by Broadcom lost the right to resell VMware software as of October 2025.
Who is picking up IBM’s VMware customers?
11:11 Systems, a Broadcom partner, has acquired contracts for hundreds of IBM’s VMware Cloud Foundation customers.
