Assessing Broadcom VMware Eight Months On

Customer Reactions to Broadcom's Changes

Customers are adjusting to Broadcom's significant alterations in VMware's pricing, packaging, and partnerships. The initial shock has transformed into decisive action, where many large VMware clients are evaluating their enterprise license agreements (ELA) and developing strategic project plans based on those timelines. They are encouraged to focus on core workloads that can benefit from the VMware Cloud Foundation (VCF) stack while minimizing the complexities and risks associated with broad migrations. Meanwhile, smaller customers who may no longer be using VMware's services are urged to consider alternative platforms or seek support from managed service providers (MSPs).

Broadcom's Strategy Post-Acquisition

Broadcom has swiftly executed its strategy following the $61 billion acquisition of VMware, significantly reducing spending and streamlining operations. The company has laid off thousands of employees and consolidated its product offerings from thousands of options to just a few key solutions, focusing on increasing revenue margins. Broadcom aims to enhance research and development while promising continued support for certain VMware products like Tanzu. By narrowing their focus, they intend to increase profitability by targeting a select group of high-end customers rather than maintaining their previous expansive model.

Emerging Alternatives for VMware Customers

As VMware's customer base reevaluates its options, numerous alternatives are gaining traction, notably through transitioning to other hypervisors such as Nutanix's Acropolis. Companies are moving towards cloud-based virtualization solutions offered by major providers like Microsoft Azure and AWS, which support both Windows and Linux workloads. OpenShift is also emerging as a strong contender, allowing customers to adapt their systems to a more cloud-native infrastructure that is AI-ready. These alternatives provide flexibility and modernization opportunities that many customers find attractive while navigating the shifts initiated by Broadcom's strategies.

Market Dynamics and Customer Sentiment

Recent data indicates a dramatic shift in spending preferences among virtualization customers, with Nutanix experiencing a rise in adoption while VMware sees a decline. VMware's net spending momentum has dropped significantly, suggesting customers are moving away, driven primarily by the changes introduced by Broadcom. The analysis of spending patterns reveals that while some smaller accounts are leaving, larger accounts remain, albeit with concerns about value and ROI. Managed service providers and other partners are positioned to benefit from the dissatisfaction of VMware customers by offering support and alternatives during this transitional period.

Breaking Analysis with Dave Vellante

Assessing Broadcom VMware Eight Months On

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Quick takeaways

Deep dives

Customer Reactions to Broadcom's Changes

Broadcom's Strategy Post-Acquisition

Emerging Alternatives for VMware Customers

Market Dynamics and Customer Sentiment

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