The acquisition of VMware by Broadcom has led to significant VMware pricing changes that are impacting small and medium-sized enterprises (SMEs) heavily. With price hikes and new licensing models, many SMEs are facing increased costs and complex decisions. This blog post explores the effects of these changes, the concerns they raise, and viable alternatives that can help SMEs navigate this new landscape.
The Impact of Broadcom’s VMware Acquisition:
Price Increases and Product Consolidation:
Broadcom’s takeover has led to significant price hikes and a shift from perpetual licences to subscription-based models. For many SMEs, these changes translate to dramatic cost increases, with some organisations facing price hikes of up to 1200% [1][2]. Additionally, Broadcom has consolidated VMware’s product offerings, eliminating many standalone options and pushing customers towards bundled solutions like VMware Cloud Foundation (VCF) and vSphere Foundation. This bundling can force SMEs to pay for services they do not need, further escalating costs [3][4].
Security and Compliance:
Broadcom’s takeover has led to significant price hikes and a shift from perpetual licences to subscription-based models. For many SMEs, these changes translate to dramatic cost increases, with some organisations facing price hikes of up to 1200% [1][2]. Additionally, Broadcom has consolidated VMware’s product offerings, eliminating many standalone options and pushing customers towards bundled solutions like VMware Cloud Foundation (VCF) and vSphere Foundation. This bundling can force SMEs to pay for services they do not need, further escalating costs [3][4].
For instance, a UK university saw its VMware support costs surge from £40k to £500k per year, a staggering 1250% increase [3], such drastic price hikes highlight the financial strain these changes impose on smaller organisations.
Discontinuation of Entry-Level Products:
One notable casualty of this transition is the VMware Essentials Kit, an entry-level product widely used by SMEs. Its discontinuation leaves smaller businesses with fewer affordable options, compelling them to migrate to more expensive, comprehensive packages [4][5].
Strategic Customer Classification
Broadcom has also reclassified certain sectors, such as education, as “strategic customers,” limiting their ability to negotiate lower prices and further inflating costs [3].
Customer Concerns and Reactions
Despite Broadcom’s efforts to reassure customers, there still remains widespread apprehension from it’s customers. A CloudBolt Software report found that 99% of VMware customers expressed concern about the acquisition’s impact on their IT strategy, with 76% being extremely or very concerned [5]. This widespread apprehension is echoed by numerous industry experts and customer testimonials, highlighting a significant disconnect between Broadcom’s reassurances and the actual impact on customers [6][7].
VMware’s Response to VMware Pricing Changes Concerns
Prashanth Shenoy, VP of Cloud Platform Marketing at VMware, addressed some of these concerns, stating, “We did not increase the prices arbitrarily. We introduced a more streamlined, subscription-based pricing model that aligns with industry standards and offers greater value over time.” Shenoy also noted that the price for the VMware Cloud Foundation subscription has been reduced by 50% (from $700 per core, per year, to $350 per core, per year) [1].
However, this statement contrasts with widespread customer concerns. Despite the reported reduction, many users, particularly those reliant on now-discontinued perpetual licences or specific standalone products, have faced significant cost increases due to the new bundled service structure. This broad industry apprehension underscores the disconnect between VMware’s reassurances and customer experiences [4][5].
Alternatives to VMware for SMEs Facing Price Changes
Given the substantial price increases and product changes, SMEs should consider exploring alternative solutions that can provide similar functionalities at a lower cost:
- Cloud-Native VMware: Leveraging public cloud services like Oracle Cloud Infrastructure (OCI) and Microsoft Azure can be a cost-effective way to continue using VMware technology. These platforms offer economies of scale that can mitigate some of the pricing pressures introduced by Broadcom [7].
- Microsoft Hyper-V: Hyper-V is a robust and cost-effective hypervisor that integrates well with other Microsoft products. It provides a viable alternative for businesses already invested in a Microsoft-centric IT infrastructure, offering similar virtualisation capabilities at potentially lower costs [7].
- Proxmox: Proxmox VE is an open-source virtualisation management solution tailored for SMEs. It offers comprehensive features and flexibility without the high costs associated with VMware’s new pricing model. Proxmox can be an attractive alternative for cost-conscious businesses seeking a reliable and scalable virtualisation platform [8].
ADT’s Commitment to Navigating VMware Pricing Changes
ADT’s Support for SMEs Amidst VMware Pricing Changes
At Assured Digital Technologies (ADT), we are committed to helping our clients navigate the complexities introduced by Broadcom’s acquisition of VMware. We provide expert guidance on transitioning to alternative platforms and optimising current VMware investments to ensure that SMEs continue to receive the best value and performance from their IT infrastructure.
Our Approach:
- Comprehensive Assessments: We evaluate your current VMware usage to identify optimisation opportunities and potential cost savings under the new pricing model.
- Tailored Transition Plans: Our team develops customised roadmaps to help you transition smoothly, whether you choose to stay with VMware or migrate to an alternative solution.
- Ongoing Support: We offer continuous support and expert advice to help you adapt to ongoing changes and ensure your IT strategy remains aligned with your business objectives.
By staying informed and proactive, we aim to turn these challenges into opportunities for growth and innovation. Contact us to learn more about how we can support your business through this transition, and help you make informed decisions about your IT infrastructure.
Conclusion
The VMware Pricing Changes for SMEs introduced by Broadcom’s acquisition of VMware have significant implications. By exploring alternatives like cloud-native VMware, Hyper-V, and Proxmox, and leveraging ADT’s expertise; SMEs can navigate these changes effectively and continue to thrive in an evolving digital landscape.
For more detailed advice on how these changes might affect your specific situation, please get in touch. We’re here to guide you through these transitions and ensure your business remains resilient and competitive.
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Why ADT?
Navigating these changes can be daunting, but we’re here to help. Assured Digital Technologies (ADT) provides expert guidance and solutions tailored to your specific needs. We can help you transition smoothly from VMware, optimise your IT infrastructure, and ensure your business remains resilient and competitive in this evolving landscape.
Sources
- SDXCentral, “What’s up with Broadcom’s VMware price, license changes?”. Available at: https://www.sdxcentral.com/articles/analysis/whats-up-broadcoms-vmware-price-license-changes/2024/06/
- Tech Monitor, “Was VMware’s takeover by Broadcom a terrible mistake?”. Available at: https://techmonitor.ai/analysis/was-vmwares-takeover-by-broadcom-a-terrible-mistake
- The ITAM Review, “As some VMware products come to an end some customers face 1200% price rises”. Available at: https://itassetmanagement.net/2024/01/30/as-some-vmware-products-come-to-an-end-some-customers-face-1200-price-rises
- TechRadar, “VMWare customers are still worried for the future following Broadcom takeover”. Available at: https://www.techradar.com/news/vmware-customers-are-still-worried-for-the-future-following-broadcom-takeover
- CloudBolt Software, ” CII Reality Report: VMware Acquisition Aftermath”. Available at: https://www.cloudbolt.io/company/news/new-report-from-cloudbolt-software-and-wakefield-research-unpacks-real-reactions-and-key-concerns-from-vmware-users-in-the-aftermath-of-broadcoms-acquisition/
- TechTarget, “VMware vSphere definition and alternatives”. Available at: https://www.techtarget.com/searchvmware/definition/VMware-vSphere
- Gartner, “vSphere alternatives and reviews”. Available at: https://www.gartner.com/reviews/market/server-virtualization/vendor/broadcom-vmware/product/vsphere/alternatives
- Tech Monitor, “VMware dumps free ESXi hypervisor”. Available at: https://techmonitor.ai/technology/cloud/vmware-dumps-free-esxi-hypervisor
