VMware woes continue as experts predict virtualization giant to lose 35% of workloads in three years
- Broadcom doesn’t want to use cloud hyperscalers to sell VMware
- They may only see it as a way to get new cloud customers anyway
- Broadcom says VMware success is boosting revenue
Gartner has predicted that Broadcom could lose over one-third of its VMware customers to other platforms as widespread dissatisfaction continues to plague the virtualization giant under its (not-so-)new ownership.
Research VP Julia Palmer explained (via The Register) that cloud hyperscalers can no longer sell VMware to customers, meaning that they now have to go via Broadcom and buy into one of its expensive subscriptions.
In summary, it means Broadcom doesn’t see hyperscalers as strategic partners, but rather as an extra step between it and profit.
Broadcom hasn’t had a success story with VMware
Palmer reckons the feeling could be mutual, with cloud giants seeing VMware more as an entry point to attract customers before enticing them to “proper cloud.”
“We are all addicted to hypervisors, and that needs to change,” Palmer explained. So far, Broadcom has made VMware expensive by means of removing perpetual licenses, removing lower-tier subscriptions and bundling products together to form more expensive subscriptions.
However, the VP also warned customers not to fully turn their backs on VMware – few platforms come near offering what it can, despite high prices and accusations of vendor lock-in strategies.
Nutanix, public clouds, Azure Local, Windows Server + Hyper-V, and Red Hat virtualization were among some of the suitable alternatives suggested by Gartner’s VP.
In its most recent quarter, Broadcom posted revenue of $15.95 billion, up 22% year-over-year. CEO Hock Tan attributed this growth to “custom AI accelerators, networking and VMware.”
The company doesn’t declare specific revenue for VMware, but Tan also partly attributed the prior quarter’s 20% YOY revenue rise to VMware too.
We do know that most of its 10,000 top customers have signed up for VCF, and there’s hope that a further 20,000-30,000 smaller companies will follow suit.
You might also like
