The VMware blow, and what Insight says it changes
Azagury told CRN that about a week before he started, Broadcom called to say it would deauthorize Insight. Broadcom decided to deauthorize Insight as a partner for selling VMware licenses and VMware Cloud Foundation (VCF) services in North America. The scope matters. The loss covers resale of VMware licenses and Broadcom-funded VCF Entitlement Services in North America. It is not a statement about Insight's technical skills.
Insight's line, then and now, is that its expertise is intact. Its EMEA authorization remains in place. Azagury echoed this, saying Insight is still a VMware partner in parts of Europe. He added that clients need answers that span on-premises, virtualized, hybrid and cloud environments.
Broadcom has since given its own account. Broadcom's partner program chief, Laura Falko, said Insight was deauthorized because it did not meet Broadcom's program requirements. Insight had earlier described the decision as Broadcom narrowing its partner ecosystem. Several anonymous channel executives told CRN they suspected a rift over Insight selling competing products to the VMware base. That is speculation, and Broadcom has not said so.
What admins should take from this
- Insight said it would complete booked work and deliver client-funded VMware and VCF services through October 31, 2026. That date has now passed.
- If your VMware renewals ran through Insight in North America, confirm who holds your licensing and support relationship now.
- Resale authorization and engineering skill are separate things. Check what your new reseller can actually deliver.
Azagury's three priorities
Azagury named three priorities: growth in AI infrastructure, growth in AI engineering, and uniting the company under One Insight. He says he has met close vendor partners about 12 times and held more than 130 client and partner conversations. He tries to meet at least one client every workday.
Advice to vendors
His advice to vendors is blunt. They should decide where they sell through partners and where they go direct. That applies to AI startups and to established vendors. It also applies to vendors building their own forward-deployed engineering (FDE) and services arms. CRN names Microsoft's Frontier Co. and Anthropic's Ode as examples.
His argument is about scale. A vendor can handle the first few big projects itself. Once there are hundreds, he says, a partner can supply delivery capacity and training. He also wants partner programs to be predictable. Changes should reach the vendor's own field account teams as well as the partners. This is one executive's view of what suits his business, not an independent assessment of any vendor's program.
The Microsoft angle
Several of the details bear directly on Microsoft customers:
- Microsoft 365 E7: In July, Insight became a launch partner and deployed the suite across its 14,000-plus employees.
- Agent 365: Insight is among a small group of global launch partners for the agent control plane.
- Copilot adoption: Insight says its Flight Academy program took Copilot adoption above 90 percent in nine months. Employees reported an average of four estimated hours of productivity gained per week. Those are the company's own figures and self-reported estimates, not independent measurements.
- Agent sprawl: Insight runs around 10,000 agents internally, many built by employees. Azagury uses agents for a morning news brief, a Sunday week-ahead preview, and email and Microsoft Teams recording analysis.
- Multiple models: He keeps Copilot, Claude and Gemini open together. He has them check each other's output to catch hallucinations.
- Managed security: In June, Insight launched Insight Managed Exposure Defense, a Microsoft-powered service. It combines exposure management, managed patching and extended detection and response. Insight says it provides 24-hour monitoring from security operations centers in the U.S., U.K., India and Manila.
CFO James Morgado said on the earnings call that the cloud business, particularly on the Microsoft side, has stayed healthy. He said Insight continues to take share in the Microsoft market. Insight also warned that Google partner program changes will hit it harder in the fourth quarter. For Microsoft shops, that suggests the Microsoft channel is a stable part of Insight's business while the Google side faces pressure.
AI ROI: the practical takeaways
Azagury says about two-thirds of Insight clients want help measuring AI return beyond surveys and hours saved. He also says 95 percent of clients will invest more in AI, not less. His advice has three parts:
- Set clear governance, including who is in charge.
- Encourage bottom-up experimentation from everyday workers.
- Pick a handful of processes for top-down redesign.
Insight applied this to three internal processes: customer operations including order fulfillment, finance end to end, and sales and sales executive support. Those processes reach about 60 percent of its workforce and have their own KPIs. His point is that adopting AI is not the same as getting value from it. The process has to change.
His customer example is an OpenAI-powered safety investigation tool for a construction contractor. Azagury estimates it will save $20 million in insurance premiums. That is his projection, not a verified saving.
Insight also reports:
- It became an OpenAI Advanced Partner in October and is building an OpenAI Center of Excellence.
- More than 600 employees are certified with Anthropic and OpenAI, and more than 100 with Nvidia.
- Its FDEs can go from discovery to a working prototype on Claude in 10 days.
The numbers behind the strategy
Insight reported third-quarter net sales of $2.4 billion, up 22 percent. Gross profit rose 20 percent to $523.2 million. Profitability was weaker than the sales growth suggests.
| Metric (Q3 2026) | Result |
|---|---|
| Net sales | $2.4B, up 22% |
| Gross profit | $523.2M, up 20% |
| Gross margin | 21.4%, down 30 bps |
| Net earnings | $22.2M, down 57% |
| Adjusted EBITDA | $177.4M, up 22% |
| Operating cash flow | $128.4M |
| Hardware net sales | Up 32% |
| Software net sales | Down 3% |
| Cloud gross profit | $164M, up 26% |
| Core services gross profit | $95M, up 21% |
Rising device prices, partly driven by memory costs, weighed on hardware margin. Insight cited memory pricing, supply chain disruption and macro uncertainty as reasons for caution in the fourth quarter. For the full year it raised its gross profit growth outlook to 12.5 to 14 percent. It expects gross margin of about 21.5 percent.
Azagury also said that a large share of the devices Insight sells are AI-ready. He thinks small on-device models could help with the economics of tokens. He expects cloud and on-premises both to keep growing, with cloud growing faster.
One Insight and the cost side
One Insight is partly a restructuring. Insight started a voluntary separation program in the third quarter and booked $25.7 million in net severance and restructuring expenses. The program targets mid- and back-office roles. Morgado said it should save about $30 million a year in gross terms. Azagury said mid- and back-office hiring has been mostly frozen. He framed the separations as more than cost cutting. In his words, the aim is to reallocate resources toward the highest growth opportunities.
Adrian Gregory, who leads Insight's EMEA business, will head a global solution and partner organization from January 1. It will build productized offerings and industrialize delivery. Acquisitions are on hold, though Azagury left the door open for 2027 and beyond. Insight has scheduled an investor meeting for December 2.
Analysis
The interview is a CEO speaking to a trade publication, so the claims are promotional by nature. The adoption figures, ROI estimates and FDE timelines are all self-reported and unaudited. The earnings figures are the more solid part.
Three practical points stand out:
- Reseller diversification is a real risk. The deauthorization of a top-tier partner shows how quickly the VMware channel can shift under customers.
- Channel partners are positioning as AI integrators. Insight is betting on engineering depth, not just resale margin. If you buy Microsoft AI through a partner, ask about FDE capacity, governance help and ROI measurement.
- Vendors are competing with their partners. Microsoft, Anthropic and others are building in-house services teams. Azagury is asking them to say where those teams end and partner work begins.