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Could You End up Paying 10X More for Your VMware Licenses?

A greedy man grasping stacks of dollar bills in front of microphones

Concerns about Broadcom’s acquisition of VMWare began almost immediately after it was announced. These concerns were primarily driven by Broadcom’s history of pushing through dramatic price increases after other acquisitions such as CA Technologies and Symantec.

Gartner analysts even went so far as to issue a warning noting that customers “should identify exit ramps for deployed VMWare products”. Recent changes to VMWare’s licensing model has proven those concerns were well founded. Some of the recent changes made include:

  • Bundling of product sets leading to 300-400% price increases on average (for example, you can't buy vSphere only anymore; you must buy a bundle). Many customers are reporting up to a 10x increase.

  • Service provider count going from 4500 to 500. It's possible your managed service provider won't exist in the near future.  

  • Removal of perpetual licenses to a new subscription-based model  

  • Termination of free ESXi hypervisor  

  • Removal of 56 products as standalone SKUs


Plotting a path forward

Current VMWare customers need to plot out a short and long-term plan to properly navigate these changes. We are seeing companies take one of four paths forward as they plan out how they are going to approach these changes.


Grin and bear it


The reality is many companies will deal with the price increase and continue with business as usual. This is what Broadcom is counting on.

In many instances companies are finding that the cost of lifting and shifting to a different solution would erode any savings they could achieve by making a change. They are looking at not only licensing costs but considering the costs of training their people in a different technology stack and the cost of reintegrating another solution into their larger ecosystem built around VMWare (monitoring, alerting, etc.).


Optimize your spend within a new bundle


Some companies have shifted their attention to getting the most out of the new bundles they are being shoehorned into. They are looking at how they can shift spend from non-VMWare products to VMWare equivalents that are already included in their new bundle.


If you are going to stay with VMWare, this would be our recommended route. While there will be soft costs associated with shifting away from these other products the tighter integration to a pure VMWare stack can offer benefits and you might as well use what you are paying for if there isn’t a compelling reason to stay on an equivalent non VMWare product. In most instances the functionality gap between VMWare and non-VMWare equivalents is small enough that making the move makes sense.


Switch to another product

Forrester reports that 20% of VMWare enterprise customers plan to migrate off the VMWare stack in the coming year. According to Forrester analysts, VMWare customers "are exhausted by significant price hikes, degrading support, and forced mandatory subscription to software bundles where some modules such as NSX and Aria Suite/vRealize Suite end up as shelfware."

The question is where you should go if you plan on making a move. There is an array of options available but according to a recent TechRadar survey “KVM-based and Xen-based hypervisor alternatives, which are both open-source solutions, account for more than two-thirds (70%) of all respondents’ preferred choices.” when it comes to moving away from VMWare.

Move to an as-a-service model

Many companies are seeing this as an opportunity to accelerate moving their infrastructure to either hyperscalers (AWS, Azure or GCP) or IaaS providers that use VMWare open source alternatives to power their offerings.

Pro tip: If you are considering moving to a hyperscaler, our recent blog is a must read Hyperscaler Hangover? Why Now May Be The Right Time To Reconsider Your Datacenter Strategy

The good news is that many of the IaaS providers that have open-source hypervisors are making incredible offers to VMWare customers to minimize the costs of making the change. If you are contemplating this move, now is the best time to take action.

No matter which path you choose Eclipse has the expertise to help you navigate the change. Want to maximize your new VMWare bundle? We can help with that. How about help making a move to open-source alternatives? We can help guide the path. Want to explore IaaS providers with open-source hypervisors? We can help find the right fit.

Contact us here to start the conversation.


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