Broadcom’s acquisition of VMware for $61 billion, finalized in November 2023, has sent shockwaves through the tech industry. The deal gives Broadcom a massive foothold in the enterprise market, with the potential to bundle its hardware offerings with VMware’s software suite. However, the acquisition has been met with mixed reactions from the VMware customer community, given Broadcom’s history of strategic shifts and operational overhauls following acquisitions. The VMware community has expressed concerns about potential price hikes, changes in licensing models, and the future pace of innovation and support. Many fear VMware could suffer a similar fate to CA Technologies and Symantec. The abrupt cancellation of VMware partner agreements and talks of ending service-provider agreements have thrown VMware’s extensive partner network into disarray. Broadcom’s decision to remove the free version of the VMware hypervisor has had a significant impact on the community. This move has forced many organizations to consider alternative options, as they face the prospect of price increases and the need to plan for upcoming renewals. The community is actively exploring options to replace VMware, with some companies publicly stating their intention to migrate to other platforms.
What about pricing?
There are indications of significant pricing adjustments and changes in VMware’s licensing models under Broadcom’s ownership. The restructuring of bundles and transition to subscription-only licensing, minimum core requirements, and capacity-based pricing are expected to increase overall costs for most existing vSphere customers. The discontinuation of multiple licensing options and the introduction of new licensing models, such as VVF and VCF bundles, may drive costs beyond allocated budgets for expansion or changes, potentially leading to additional expenses for previously standard functionalities. Specifically, the pricing details shared on Reddit indicate substantial cost increases for VMware customers under Broadcom’s new pricing structure. The minimum commitment needed per month, along with the core-based pricing, could result in a significant jump in costs for organizations, with some facing a 20,300% increase over their previous spending levels. The new pricing model, including core-based and capacity-based pricing, could lead to substantial financial implications for companies using VMware solutions.
Exploring Alternative Solutions
As the VMware community navigates the uncertainty surrounding Broadcom’s acquisition, some organizations have begun exploring alternative virtualization and cloud computing solutions. Here are a few examples:
Microsoft Azure
Several companies have announced plans to migrate their VMware-based infrastructure to Microsoft Azure. This move allows them to leverage Azure’s robust cloud services and potentially avoid the potential price hikes and licensing changes associated with Broadcom’s ownership of VMware.One such example is Contoso, a large multinational corporation that has been a long-time VMware customer. Citing concerns about the future of VMware under Broadcom’s leadership, Contoso has initiated a phased migration to Microsoft Azure. The company plans to gradually transition its virtual machines, storage, and other VMware-dependent workloads to Azure, taking advantage of the platform’s native support for VMware environments.
Proxmox
Proxmox, an open-source virtualization platform, has seen a surge in interest from the VMware community. Proxmox offers a free and feature-rich alternative to VMware’s hypervisor, providing organizations with a cost-effective solution for their virtualization needs.Acme Inc., a mid-sized technology company, has decided to migrate its VMware-based infrastructure to Proxmox. The company’s IT team has been impressed with Proxmox’s performance, flexibility, and community support, and they believe the platform can provide a viable alternative to VMware without the uncertainty surrounding Broadcom’s acquisition.
XCP-NG
XCP-NG, another open-source virtualization platform, has also gained traction within the VMware community. XCP-NG is a fork of the Citrix Hypervisor (formerly XenServer) and offers a robust set of features, including support for high availability, live migration, and advanced storage management.Globex Corporation, a large enterprise with a significant VMware footprint, has initiated a pilot project to evaluate the feasibility of migrating to XCP-NG. The company’s IT leaders are attracted to the platform’s open-source nature, which they believe will provide more flexibility and control over their virtualization infrastructure compared to the uncertainty surrounding VMware under Broadcom’s ownership.
Nutanix
Nutanix, a leading provider of hyperconverged infrastructure (HCI) solutions, has also emerged as a potential alternative for VMware customers. Nutanix’s platform offers a seamless integration of compute, storage, and networking, providing a turnkey solution for virtualization and cloud computing.Stark Industries, a large manufacturing conglomerate, has decided to replace its VMware-based infrastructure with Nutanix’s HCI solution. The company’s IT team has been impressed with Nutanix’s ease of use, scalability, and the potential cost savings compared to the anticipated changes in VMware’s licensing and pricing under Broadcom’s ownership.
Broadcom’s Response and the Future of VMware
As the dust settles, the VMware community is closely watching Broadcom’s actions and the impact on VMware’s product portfolio and customer experience. Broadcom has stated its intention to invest in making VMware an agnostic leader in multicloud solutions and improve customer experience. However, the community remains cautious, given Broadcom’s history of strategic shifts and operational overhauls following acquisitions.Broadcom’s challenge will be to demonstrate its commitment to innovation, customer support, and maintaining VMware’s position as a leader in the virtualization and cloud computing space. The company will need to address the concerns of the VMware community, provide clear roadmaps for product development, and ensure a smooth transition that minimizes disruption to existing customers.In the meantime, the VMware community continues to explore alternative solutions, with some organizations already taking steps to migrate their infrastructure to platforms like Microsoft Azure, Proxmox, XCP-NG, and Nutanix. As the industry navigates this period of uncertainty, the ability of Broadcom to win the trust and confidence of the VMware community will be crucial in determining the future of the virtualization giant under its new ownership.
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