In February 2024, Broadcom finally arrived and completed its acquisition of VMware. We blogged (Broadcom Is Here: Is It Time to Finally Leave VMware Behind?) about expected price hikes and disruptions for sales & support. We thought there would be gloom and doom, but the reality now is that it’s downright apocalyptic for its customer base.
Here’s what has happened in the past year.
1/ Broadcom has hiked its prices to the average customer by over 300%, for some over a 1000% without any increase in services or features. The 300% increase is hitting companies and organizations hard, particularly smaller corporations, non-profits and school districts, stretching their IT budgets so far that they must seek other solutions. Broadcom boasted to its shareholders that it has turned VMware into an even more prolific money machine than it hoped would be possible. This is all at the expense of long-term customers and one of the many reasons why loyal customers are abandoning their reliance on VMware offerings.
2/ Broadcom no longer offers perpetual licensing or perpetual licensing support. AT&T is just one of the many long-time VMware customers that have had significant issues with Broadcom. AT&T claimed Broadcom was refusing to honor its pre-acquisition support agreements, which included options to extend support for two years. They demanded AT&T purchase new, bundled subscription services that AT&T claimed would increase costs by 1,050% and require them to spend millions to adapt their network.
The little guys in the small-to-medium sized business (SMB), government, and education spaces, are in worse situations, because they lack budget to pay for the new exorbitant subscription fees or for big lawyers to fight back.
3/ Broadcom’s new licensing policies really impact small to medium sized business. Broadcom now mandates a minimum purchase of 72 CPU cores for both renewals and new licenses. Previously they supported licensing per socket, giving flexibility to scale. So even if you only need 32 or 48 cores, you’d have to pay for 72. Plus, Broadcom has introduced a 20% penalty for late renewals. These changes will really challenge SMB customers with constrained IT budgets.
4/ Decline in support continues. Since Broadcom acquired VMware, customers have reported challenges with support, including slower response times, less knowledgeable staff, and difficulties navigating the new Broadcom support portal. This means potentially longer downtimes and more reliance on your internal IT teams to diagnose and resolve issues.
If you don’t have a VMware exit strategy, you need to have one now
Your budget can’t afford to wait. It will take some time to assess alternatives, purchase and install a new solution, and perform the migration.
Many customers are looking at Microsoft Azure Local to replace VMware. In one survey from CIO and Veeam, Azure Local or Hyper-V was the top alternative customers were considering. Another survey from Rimini Street, found that that 98% of the 111 VMware users responding say they are looking to migrate to alternatives and 69% percent of them are looking at Microsoft.
Why Azure Local
We’re now in an era of the hybrid cloud. Azure Local lets you start on-premises and extend to the cloud as your needs change. No other on-premises solution has native cloud integration like Microsoft, offering a single stack solution from edge to cloud.
Through Azure Arc, it provides unified management across your hybrid environment, simplifying IT oversight. Plus, it ensures consistent security and compliance policies, meeting regulatory needs effortlessly.
Azure Local allows you to take advantage of Azure services like Azure Virtual Desktop for Azure Local, Azure Kubernetes Service for Azure Local, Azure Site Recovery, and more. And it supports running AI and machine learning workloads on premises with GPU acceleration, keeping your data local while leveraging cutting-edge tech. Don’t just take it from us. Gartner® recently recognized Microsoft as a leader for its ability to execute and completeness of vision in the 2024 Magic Quadrant for Distributed Hybrid Infrastructure.
We know it’s a daunting task to find the right VMware replacement and migrating to a new infrastructure but DataON can help you with your VMware exit strategy.
DataON is a Microsoft exclusive partner and Azure Local expert that has been designing and deploying Microsoft hybrid cloud solutions for well over a decade. We’ve helped many customer with their VMware transition and we’re known industry-wide for taking care of our customers with white glove service and support.