VMware is in its post-Broadcom era.

There’s a sense of chaos. Chaos, with a dose of instability and uncertainty. Upheaval. It’s a lot. You might think we’re delving into geopolitical commentary. We’re not. We’re writing about IT teams reliant on VMware in the wake of recent license remodeling. 

If you follow tech industry trends, you’re likely at least aware of the company’s acquisition by Broadcom; and if you’re in the world of IT, it’s probably a topic top of mind for you and your community. 

Over the last several months, Broadcom has dramatically reshaped VMware licensing in ways that have left many IT teams shook.

The current state of things

VMware no longer offers perpetual licenses. If you need to expand your virtualized environment—either by adding more hardware, virtualized environments, or VMware features—you’ll have to pay a recurring license fee. Additionally, the company has stopped licensing individual features; like a cable TV package, you’ll now have to buy a bundle, potentially paying for features you don’t need to access the select few you do. 

Support for several popular tools has been eliminated. Innovation teams have been significantly reduced in size, or slashed entirely. 

Sales and support teams have been reduced by a reported 80 to 90%—channel resellers have been cut, nearly in full. Only a handful remain. 

Just recently, the company announced its minimum purchase quantity is 72 cores, up from 16, and they’ll charge a 20% renewal penalty if your support contract lapses—even for a single day.  

A business angle

The upshot of all of this in business terms is straightforward. When your support renewal comes due, or you need to expand your vSphere footprint, you should be prepared to pay somewhere between 10 and 20X what you’ve previously paid. 

That’s not a typo—it’s a 1000% and 2000% cost increase. 

Part of a governmental agency or educational institution? The situation may be worse. While historically you may have received discounts, or even free licensing and support, the company has seemingly removed these programs. Under the new licensing model, all organizations pay the same prices. 

We're not outlining a select, worst-case scenario—these changes are impacting IT teams, everywhere. We’ve worked with organizations spanning the private and public sector facing increases of this nature. If this is news to you, you might have some false hope you’ll be able to strike a deal through a Broadcom program or reseller.

A new [worse] frontier for IT teams

The new reality—discounts are nil. It’s likely your reseller can no longer sell licenses, and if you’re fortunate enough to be working with one who can, they’ve little to no ability to cut a deal. If you call Broadcom, there’s no longer an account manager to respond. You can go to the VMware customer site, log in and pay for your renewal—that’s the single option open for most organizations. 

Only the largest VMware customers have access to account managers, and even they’re not receiving discounts. While some have been offered short-term contract extensions, these only delay price increases. 

They’ve all been told the same thing: Price increases are inevitable and unavoidable.

So, what do we get in return?

Now, you may be thinking this notable upcharge will amount to stronger service or more rapid innovation. Unfortunately, neither is true. Innovation on the platform has all but ceased and support teams have been drastically reduced. Effectively, if you opt for business as usual with your IT estate and VMware, you’ll be paying an order of magnitude more for much less service. 

In a world where IT needs to do more with less each year, this is untenable. 

Now, a few positives

vSphere is an amazing platform, still. Over the past couple of decades, it’s innovated, becoming a critical component to countless IT teams. The platform provides hardware virtualization, enables workload orchestration and telemetry on our IT infrastructure and applications, and effectively underpins our networks, even providing hearty security controls. 

For a long time, VMware delivered all pros and no cons. But considering the new capital outlay, a weighty vSphere reliance presents little more than dead weight for some. 

The good news—this weight doesn’t have to be borne alone. 

Exploring what’s next

While there is no easy button, there is a solution. With a collaborative IT partner willing to engage, learn, and traverse the details in tandem with your team, you can move through this current state relatively unscathed—even better for it. Really. 

At 2nd Forge, we’re helping our clients develop strategies to mitigate VMware license cost increases and evacuate the platform over time—in ways that reflect the needs of your organization’s business, now and in the future.  

We’ve refined our approach with some of the largest international enterprises, and we’d love the opportunity to help bring order to the uncertain future of your IT environment. 

If VMware licensing increases are in your future, chaos is not inevitable—there is hope. The process of transitioning to what’s next doesn’t have to be expensive or painful. As with all things, you can be intentional in your next step. So often, it’s the smartest approach to moving forward. 

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Over the next few weeks, we're publishing a content series covering VMware evacuation approach, considerations, and strategy. Come back and check it out. 
 
Interested in sharing a conversation with our team? We’d welcome it.

Reach out and we’ll make it happen.