Broadcom grows revenues by 20% following VMware purchase, as customers fume about subscription costs

The company is “more than halfway” through the renewals, Tan said, adding, “we probably have at least another year plus, maybe a year and a half to go” in transitioning major accounts to VCF. Most of  Broadcom’s VMware contracts are for about three years, which is “very traditional,” he said.

The move to the VCF subscription model was intended to simplify the number of VMware products and options, but it also means that customers may have to pay for items they don’t otherwise want, need, or use, and they can’t access products that were once a la carte, such as NSX Networking or vSAN, unless they purchase a bundle.

This has come at significant cost. According to some claims, pricing has increased anywhere from 150% to 500%, leading some customers to look elsewhere.

Considerations moving forward

Kimball said he didn’t expect a massive exodus when the VMware acquisition closed and the market hysteria began. Moving away from a platform so “deeply entrenched” in IT operations is “not for the faint of heart, nor is it a quick exercise,” he said.

“Do I think VMware will keep all of its customers? Certainly not,” Kimball said. “While the company says it has not increased pricing, the licensing changes implemented numerous times have effectively done just that: Increase prices.”

However, Tan did present a “compelling vision” of the private cloud with VCF 9.0, announced at VMware Explore in 2024, and made the smart move to present Broadcom as customer 0, he said. “It showed the real value of private cloud across a large enterprise with many business lines.”