VMware / Broadcom—Significant Update Affecting All VMware Clients

Let me preface the rest of my analysis by saying I believe everything I’m sharing is public and was received via channel updates and by working on in-flight customer transactions. We are a 20+ year VAR of their products with extensive knowledge of their license models. We love VMware, use it every day, and I am trying to provide unbiased advice and analysis here. CAVEAT – the situation is evolving, and I have incomplete info as new details are coming out by the day. I’ve done my best to make informed assumptions. Feel free to correct me or provide your opinions on the subject.

SO WHAT DOES THIS MEAN?

I’ve dealt with two types of customers – naked vSphere ENT+/vCenter shops and vSphere ENT+/vCenter plus other product (i.e., VSAN, NSX, vRealize/Aria) shops. If you fall outside these, where vSphere Standard or Essentials is where you run your business – those still exist, you’re fine, everything is fine.

I am one of the 99% of the enterprise IT market, and run vSphere Enterprise Plus. DO I HAVE A CHOICE?

Not to my knowledge. The old SKUs are no longer available effective in a few weeks, including from OEMs such as Dell, HPE, or Lenovo.

I think clients have 3 immediate choices when their renewal comes due:

1. Buy vSphere Foundation or VMware Cloud Foundation subscriptions;
2. Downgrade to vSphere Standard, eliminating the H/A capabilities that are table stakes in the enterprise; or
3. Migrate hypervisors or to the Cloud.

Option 1 is where I’m doing a ton of analysis right now, more info below. Option 2 is not viable for most of my clients.

Option 3 – TL/DR on that: On-prem, there are only two enterprise-class alternatives in my opinion – Nutanix’s Acropolis HyperVisor (AHV) and Microsoft’s Hyper-V. For cloud, 99% of our clients will go either AWS or Azure. We have done countless migrations between these options (on-prem between hypervisors, and to/from cloud) and as a result, we’re Nutanix’s 2023 SLED Partner of the Year, an Azure Gold Partner, and an AWS Select Partner.

THE MORE LIKELY OUTCOME – PROCEEDING WITH A RENEWAL UNDER THE NEW MODEL.

While we are happy to advise you on migration plans, since most clients need to pull the trigger on their renewal in the next 1-12 months, I personally believe 90%+ of our clients will proceed with a purchase under this new model. Broadcom’s prices for the amount of software you are getting are truly fantastic and lock you into a new 3-year Broadcom agreement ensuring no increase in pricing in the near term.

Proceeding with the new license model can either:

1. Buy you time to fully embrace the new VMware and its associated technologies, including software-defined storage and networking; or
2. Buy you time to create a comprehensive migration plan so in 3 years you have moved to your new destination.

Keep in mind – vSAN is included in EVERY RENEWAL. Getting ahead of this can save you on any planned storage investments over the next 12-24 months. As everyone who has analyzed a storage Bill of Materials knows, the most expensive part of a storage purchase is the storage software (it’s been that way for 10+ years), not the hardware. You’re now getting some portion of that as a vSphere ENT+ client, no matter what.

IS THAT GOOD NEWS? IS THERE OTHER GOOD NEWS? YES. YOU MAY SAVE A TON OF MONEY.

So… I am 50-60% done with our first actual client analysis, for a vSphere ENT+ client that also runs NSX, Aria/vRealize, and some other VMware products, and it looks like the new Broadcom model is GOING TO SAVE THEM A TON OF MONEY. Like – a MASSIVE AMOUNT. Back of the napkin, I’m estimating 20-30% less for their VMware ELA, for 2X the software. This software can then reduce their storage costs substantially. Total Estimated ROI: $200K on VMware, plus $500K-$1M in additional storage and value-oriented savings over the next 3 years…

Want the details and more analysis? We are analyzing 5 actual client scenarios now. Assuming I don’t get barred from posting more on this subject, stay tuned, and I will be doing subsequent articles and LinkedIn posts on each customer we analyze. WE ARE LOOKING TO PROVIDE FREE ANALYSIS FOR YOU, TOO! Please CONTACT US to have your environment analyzed. All data shared on socials will, of course, be anonymous and with your consent.

Follow along as more details develop and as we complete customer scenarios and analysis!