UPDATED 16:44 EDT / JUNE 06 2024


Study finds fears of post-Broadcom VMware customer flight may be overblown

Forecasts of mass abandonment of VMware Inc. customer defections to other virtualization technology providers in the wake of Broadcom Inc.’s $61 billion acquisition of the virtualization giant may be overblown, according to a study released today by CloudBolt Software Inc. in partnership with Amazon Web Services Inc.

CloudBolt surveyed 300 information technology executives with responsibility for VMware-related purchases last month and found that while 76% described themselves as extremely or very concerned about the acquisition’s impact of their business, most are taking their time in evaluating their options. The top two of those are keeping some VMware products (cited by 43%), remaining fully invested in VMware (40%), moving more workloads to the public cloud (38%), migrating to an alternative hypervisor (34%), and moving entirely to public cloud (33%). Acknowledging an option did not equate to an intention to act on it.

Just 5% have already decided and an additional 87% plan to do so within the next 12 months. The study didn’t note which option those 15 companies had chosen.

Broadcom has made several sweeping changes to VMware’s sales and licensing plan since the acquisition was completed last November. They include discontinuing perpetual licenses in favor of subscriptions, withdrawing support for existing perpetual licenses and ending VMware’s partner program that served thousands of mostly small businesses. Although price increases haven’t been announced, many VMware customers fear the worst, given Broadcom’s track record from previous acquisitions.

Very disruptive

The survey found that 46% of respondents believe the acquisition will be very or extremely disruptive to their IT strategy. Just 5% expected no disruption. Nearly three-quarters expect price increases of more than 100%, with 45% expecting jumps of more than 200%.

The survey didn’t ask about a timeframe for those expectations. Nearly 70% of respondents face the expiration of at least some VMware contracts within the next 12 months.

When asked what may prompt them to move to an alternative provider, an equal 36% cited uncertainty about Broadcom’s plans, support quality and partner relationships, while one-third said the shift to subscription licensing, anticipated price increases, negative experiences with Broadcom, and the company’s reputation from past acquisitions were factors.

The products they’re most likely to abandon are the vSphere hypervisor (cited by 39%), vRealize cloud management (37%), NSX networking (34%), Tanzu Kubernetes management platform (33%), vSAN storage (31%) and Horizon virtual desktop infrastructure (31%).

“With Broadcom’s recently reported move towards increasingly bundled ‘all or nothing’ licensing for VMware solutions, it’s expected that companies evaluating migration would likely need to abandon multiple products, not just individual components,” the study notes. “The fact that respondents indicate all major VMware offerings are nearly equally under consideration for replacement underscores the extensiveness of the potential upheaval.”

Photo: Robert Hof/SiliconANGLE

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