Broadcom moves roil VMware customer base

Tompkins says that his members expressed concerns about licensing when the deal was first announced. “Some people weren’t too happy about it.” But he points out that the entire software industry is moving to a subscription-based model, and Broadcom made its intentions clear from the start, so “it shouldn’t have been a surprise to anyone.”

Broadcom is also bundling its software offerings into two products: VMware Cloud Foundation, the enterprise-grade hybrid cloud solution, and VMware vSphere Foundation, aimed at the SMB market. Broadcom says it is reducing the subscription list price by half for VCF.

“You can’t get a la carte now,” says Chhabra. “You have to buy the bundle. The bundle price may be low, but you have no option.” This move is expected to create some friction between customers who might not want to pay for a full suite, and Broadcom’s goal of increasing revenue by encouraging customers to move up the software stack.

What are some other VMware customer concerns?

Tomkins says one of the major concerns of his members is the fate of the end-user computing division. “That was probably the biggest news that we’ve had come out since the acquisition,” he says.

VMware’s Horizon VDI product is popular with VMUG members, and there is uncertainty about who will buy it and how that new owner will treat a product that is so deeply integrated into the IT infrastructure.

Tan has tried to reassure customers about the fate of EUC and Carbon Black. “We’ll find good homes for them. There are a lot of very interested parties who are more than happy to take those assets. We will be very, very thoughtful about where we put those assets eventually, simply because many of their customers are also customers with VMware Cloud Foundation,” he says.

Chhabra says that in addition to the fears that costs will escalate under Broadcom, customers are worried about support. The layoffs aren’t a good sign, and the termination of partner agreements with resellers and service partners is even scarier.

Raffo says, “This will hurt enterprise customers if their favored channel partner cannot join the new Broadcom Advantage Partner Program. It will probably impact smaller customers more.”

Another concern, according to Chhabra is the product roadmap. Tan has said all the right things, announcing his intention to invest $2 billion into VMware, $1 billion in research and development, and another $1 billion in the partner program. But Chhabra says he wants to see specifics on where that R&D money is being directed.

Is there an offramp for VMware customers?

VMware competitors are sensing an opportunity to take advantage of this period of change and uncertainty and are making an aggressive push to convert VMware customers. However, it won’t be easy for enterprise customers to switch vendors.

Raffo points out that VMware virtualization software often comes with a server purchase, so it’s pretty much everywhere. And VMware has grown to become more than just a simple hypervisor; it’s a complete ecosystem that encompasses server virtualization, management, storage, backup, and disaster recovery. “There are a lot of moving pieces that will require work to get off of.”

Chhabra agrees. He says that a customer certainly can look at alternative hypervisors like Microsoft Hyper-V, Citrix, Red Hat, hyperconverged infrastructure options from Nutanix, or smaller players like Scale Computing and Verge.IO.

“But don’t just do a hypervisor comparison,” advises Chhabra. Investigate dependencies in areas such as data protection, security and backup. For example, does the alternative vendor provide backup and recovery timelines that are commensurate with what you have now? How about integration with third-party management tools?

He adds, “If you’re running a business-critical homegrown app on VMware, you can’t simply swap out to another hypervisor. What changes do I have to make to the application to make it compatible with the new hypervisor?”

Chhabra predicts that many organizations will slowly disengage from VMware for specific applications and use cases, but will probably always have some VMware running, creating a heterogeneous environment.

“The seeds of migration have already been sown,” says Chhabra. “If you’re serious about moving, start thinking about it now, because it takes time.”

On the bright side of Broadcom’s VMware deal

Tompkins says there’s a sense of relief among VMUG members that the deal is finally done. On the licensing front, he says that requiring customers to adopt the subscription model guarantees that they will always be on the latest version of the software, rather than falling behind. “Subscriptions encourage people to stay current on the technology and that’s a win for everybody,” he says.

And he likes the technology direction that Broadcom has laid out. “The software-defined data center is where our members want to go. Our members are telling us they want to move up the stack and do more than just vSphere.” They’re interested in hybrid cloud and multicloud and that is the direction that Broadcom is moving, he says.