VMware customers want out from under Broadcom's pricing, but few are ready to leave

Skye Jacobs

Posts: 2,251   +63
Staff
Bottom line: VMware customers looking to cut licensing costs are considering a mix of hypervisors and containers rather than switching directly to another vendor. Yet managing and securing those environments requires expertise that can complicate the move. The challenge for these companies is to gain more control over their infrastructure without making it harder to run.

A Rimini Street survey of 300 organizations worldwide that use VMware found that 60% are considering a multi-hypervisor strategy. Another 47% favor using both hypervisors and containers, allowing them to choose where to run different workloads. Rimini sells third-party support for VMware and other enterprise software, including Oracle and SAP, so it has a commercial interest in customers reconsidering their support arrangements.

Operational complexity was the most common barrier to changing virtualization strategies, cited by 40% of respondents. Multi-vendor management challenges followed at 38%. An expanded attack surface and staff skills requirements each concerned 37%.

The findings show how difficult it is to reduce reliance on a single vendor. Adding platforms gives organizations more choices, but it also leaves their IT teams with more systems to manage and secure. License savings are only part of that decision.

Interest in combining hypervisors and containers suggests that some respondents want to change how they place workloads, not simply replace VMware with another virtualization supplier. That approach could leave organizations supporting existing VMware systems while introducing other technologies.

The survey does not say how many respondents have completed those changes. Considering multiple hypervisors is not the same as operating them, and a preference for combining containers and hypervisors does not establish how widely that approach is already deployed.

"These findings suggest that while organizations are actively pursuing change, they are also looking for ways to reduce risk and avoid unnecessary disruption," Rimini said.

Cost is the main reason respondents are looking elsewhere. Ninety percent said higher VMware licensing costs prompted them to explore alternatives, while 73% named cost savings as a top priority in their virtualization plans. Another 54% cited Broadcom's decision to end support for perpetual license holders.

Customers have reported substantial price increases since Broadcom took over VMware. Some have described increases of roughly 100 to 300%, while others have reported increases as high as 1,000%. Those accounts show the pressure some customers face, but they do not represent a uniform increase across VMware's installed base.

The survey also found limited appetite among many respondents for moving assets to Cloud Foundation, VMware's hybrid cloud platform. Forty-eight percent said they had no plans to move any assets to it.

Gartner expects more enterprises to test alternatives over the next several years. In its "Magic Quadrant for Distributed Hybrid Infrastructure," released last month, the firm predicted that 55% of enterprises would conduct proofs of concept for alternative distributed hybrid infrastructure products by 2029, up from 25% in 2026.

The forecast covers evaluations of products that could replace VMware-based deployments and support hybrid cloud infrastructure. It does not predict that 55% of enterprises will have left VMware by 2029.

Companies still need to keep critical systems running while they test alternatives, and testing does not mean they are ready to switch. Testing a replacement, deciding which workloads belong on it and managing the transition are separate steps. The survey points to strong interest in change, but also to practical reasons customers may move gradually.

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No way, shocker! We swapped to another provider altogether and are using perpetual licenses until we can get the rest moved over. Broadcom went to far with this, and will certainly have no effect on their yearly revenue. This company needs to die already.
 
Yep, my company completely dropped VMware. When Broadcom took over, they ruined it. I'm surprised they're still in business. Worst transition I've ever seen.

And yes, Proxmox is better, anyways. We're glad we left because VMware's code base was falling behind, and wasn't keeping up anyway.
 
I was at symantec when broadcom came in and bought us. Their business model is basically organ harvesting on a live patient.

BUT, the issue is not broadcom itself but the *SCUMBAG STOCKHOLDERS*..

When Broadcom bought Mcafee/Computer associates it was because *scumbag stockholders* were not happy with the CA/MC dividends and stock value and wanted a big payday.. broadcom gave them that.

When Broadcom bought My company Symantec it was because *scumbag stockholders* were not happy with the dividends and stock value because they did not listen to the industry and ignored the cloud and wanted a big payday.. broadcom gave them that.

VMWARE is more of the same... the *SCUMBAG STOCKHOLDERS* and board at vmware wanted a big payout, and were not happy with their earnings... so in swoops broadcom.

end of the day all three were bought out and picked apart because the stockholders wanted a big payday...

And since broadcom's stock went from 180$/share to 1200$/share .. then split 10:1 and shot back up to 400$/share THEY ALL GOT WHAT THEY WANTED.

to be clear .. broadcom is odious and creepy.. they killed my company that could have been saved. but their business model works. they get the IP, they squeeze blood from every customer and then sell the IP or merge it into another product.

Hock Tan is no fool.
 
Shame they're no longer on the stock market.
I'm curious to see how well their customer hostile approach works.
 
Shame they're no longer on the stock market.
I'm curious to see how well their customer hostile approach works.
So, it works like this::

90% of the customers get a 500-1000% price increase and told they can go die in a fire. LITERALLY THIS HAPPENED in the symantec merger. they know in symantecs/vmwares case you cannot instantly switch products. so you have a hostage who will pay for at least 1 year, but on average they pay THREE years in transition. Broadcom HATES THESE sub 90% customers. They are whiny, waste resources and threaten to 'leave' all the time.. so they milk them and toss them out.

the top 10% is where the money is really at, and by top 10% I mean purchased product revenue, 3 year renewals.. gravy money. Broadcom will custom code the product to those specific customers. .. we did that for symantec.. those customers 'feel' special.. Hock Tan the CEO will go himself onsite to these customers and promise the moon and give them what they want. on the backend they will cut developers to the bone and barely finish the product requests.. but they somehow do it so the 'big fish' top 10% keep buying at extremely high costs for 3-5 years.. but eventually the dead end development of that product dives even them away.

Then broadcom sells it off, or farms out the IT support and buys the next big thing...
 
So, it works like this::

90% of the customers get a 500-1000% price increase and told they can go die in a fire. LITERALLY THIS HAPPENED in the symantec merger. they know in symantecs/vmwares case you cannot instantly switch products. so you have a hostage who will pay for at least 1 year, but on average they pay THREE years in transition. Broadcom HATES THESE sub 90% customers. They are whiny, waste resources and threaten to 'leave' all the time.. so they milk them and toss them out.

the top 10% is where the money is really at, and by top 10% I mean purchased product revenue, 3 year renewals.. gravy money. Broadcom will custom code the product to those specific customers. .. we did that for symantec.. those customers 'feel' special.. Hock Tan the CEO will go himself onsite to these customers and promise the moon and give them what they want. on the backend they will cut developers to the bone and barely finish the product requests.. but they somehow do it so the 'big fish' top 10% keep buying at extremely high costs for 3-5 years.. but eventually the dead end development of that product dives even them away.

Then broadcom sells it off, or farms out the IT support and buys the next big thing...
In the case of vmware .. this was a schrewd and evil move. Vmware is HARD to replace when you have 300,000 vmware servers. My Bank customer had 430,000 physical desktop seats and 300,000 vmware installs. You cant swap that even on a 5 year plan. Last I heard they moved as chunk to Hyper-v beacause Msoft offered it cheap but they were not at all happy with the results and need to reduce guest density per blade. there is not a direct fit replacment to vmware and broadcom knew it.
 
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