As many will know, Broadcom completed its acquisition of VMware on 22nd November 2023. Since then, the entire VMware landscape has been reshaped, meaning that licensing rules, product bundles, support structures and contract negotiations have all been rewritten. What used to be a complex, but familiar ecosystem, is now a challenge beyond recognition, as IT teams realise that the VMware they thought they understood, no longer exists.
Having just developed new courses for LISA on this subject, we spoke with our course leader Barry Pilling around some of the key VMware/Broadcom challenges, and asked him for his perspective on these. This is what he told us.
As we know, Broadcom have made a lot of waves in the ITAM industry over the last couple of years. Back in December 2023, they announced a load of changes post-finalising their acquisition.
As a result, many customers have become concerned with potential price increases, leading a lot of customers to question the reason for moving across to the new subscription model (which manycustomers don’t want to do).
With Microsoft, when they transitioned customers from on-premise Office, to Office 365, they included the From SA subscription SKU, which was cheaper. I think the fundamental mistake Broadcom have made, is that they didn’t do something similar.
In my opinion, they should have offered to give you a form of credit for your subscription – for example, they could have offered a ‘From S&S’ subscription, at a lower cost than a full subscription. Had they done that, I think a lot more customers would be happy to move across, but they haven’t.
This means that right now, a lot of customers are at a crossroads and it’s likely we’re going to see this for a few years yet. Some customers went into new ELAs (which could be 3 or 5 years long) just before the changes were announced, so we could still be seeing customers coming up for renewals this year, and potentially next year as well.
This is the $64,000 question, and that depends on a number of factors. Firstly, the size of the business is a big factor, because Broadcom have already shown that they’re only interested in large enterprises.
Another factor is the appetite for risk, change and migration. I have seen some large customers, (and am also currently working with a global enterprise) who decided to move to third-party support for their legacy perpetual licenses. In one example, they did enter into a subscription agreement, and then decided it wasn’t for them, exited, terminated it, as they have the right to do so. And then purchasedsecond hand licenses to support them with that. So, it all comes down to appetite for risk, and whether you want to play by their terms.
What Broadcom are doing, is they’re really trying to incentivise people to buy VCF (VMware Cloud Foundation), which is the flagship Subscription bundle. And they are doing that by offering significant discounts. So, we’ve seen, on most renewals, an average of 40-60% off list price if you buy VCF, and commit to VCF for 3 years or more.
On the other hand, VVF, which is, the VMware vSphere Foundation, is the lesser bundle. They’re only offering 10-20% discounts off-list for that. However, that’s now not available in the UK and parts of EMEA, so their customers are now forced to buy VCF.
In summary, whether you choose to stay or leave VMware for an alternative, depends on the size of the enterprise, your appetite for change and risk, and how intertwined VMware is to your core product sets, your core applications.
I think a lot of small and medium enterprises are likely to migrate to something else, either public cloud, or… there is an open-source virtualisation solution which is making gains, called Proxmox,which is completely free to use. Whether it has the capability of VMware, I don’t know, but I think for smaller VMware estates, from what I’m hearing, it copes quite well.
Another possibility is Citrix. Citrix have reintroduced XenServer, so they’re now going after the virtual market again. Nutanix are trying to hoover up old VMware customers as well. There’s lots of customers migrating away, but I think there’s going to be a lot of customers that have to stick with it, because they’re just too big to move away from it quickly.
To help our LISA customers, we have three brand new, on-demand courses, offering you a structured learning path to tackle these complex changes:
Many customers are now at that point where they are asking themselves “do we renew? or, do we continue with our legacy perpetual licenses and go with third-party support? Do we do a part-and-part? Or should we migrate to a completely new platform?” These courses help you make those decisions.
The purpose of the Legacy VMware course is to help customers fully understand their rights and obligations if they stick with their legacy perpetual VMware licensing. It is designed for those who have decided that they’re going to run at least part of their estate with their legacy perpetual licenses, and the course talks them through the old agreements, the old licenses, the metrics, and how to get the best out of that estate.
This course is all about the new Broadcom agreements, rights and obligations you have once you’ve transitioned. There’s also information about all the new license metrics, how the bundles are put together and what products they include. As well as covering add-on products, detailing how the new metrics work, and a module about renewals and audits, walking customers through the renewal process.
In terms of Broadcom’s audit process, you may have seen that customers who don’t renew are typically being targeted for audits. The VMware By Broadcom Agreements & Products course, is all about making sure customers are comfortable with how the renewal works, how the products/agreements work, and how the audit process works, in case they get audited.
People should have a look at the courses, because it will give them the skills to be the VMware specialist in the room at their own organisation, so they can go and support their stakeholders.
Our Course Leader, Barry Pilling from Bedigital, is a VMware expert and has spent the last few years dedicating his time to understanding the challenges and implications of the Broadcom-VMware acquisition, whilst supporting his customers to manage the risks associated with these drastic changes.
