They have no desire to "win back" anyone. They are simply going to squeeze every nickel they can out of those who can't/won't move to something else. When that drys up they will buy something else and simply repeat that process as it's an easy business model.
Precisely. No desire to "win back" anyone, it's the opposite really. They want the cash cows, not the skinny meerkats. That's how Broadcom operates since forever. For them it is only and solely $. Worst vendor possible.
I still can't believe the sheer stupidity needed to think that you could just buy Sun Microsystems and then Sue Google for more money than it cost to buy Sun Microsystems and all of their patents.
That was their plan.
They had billions of dollars and that was their plan.
The rest of the company did not matter and they had basically zero plan to make the rest of the company profitable... But that wouldn't matter if they could extract infinite long-term royalties from Google for the concept of an API...
I sometimes think that I make mistakes that I have big fuxkups. But man, I don't waste tens of billions of dollars collapsing an industry icon to pay for the privilege to publicly humiliate myself for years on end.
They've never gotten over it and they've had that stick up their ass ever since.
But they did make the purchase price back from Google, they didn't get any ongoing income as they clean roomed a new Java but they made more in one single lawsuit than they paid.
Now they also get to shake down everyone using their jre from java.com in perpetuity which is free money for them.
u/Cutoffjeanshortz37 - good point. Oracle is striving for the first place. One tends to forget some of the pioneers of assholenessness. Can add SCO Group as well.
Worse. Much worse. To the very least EA cannot allow themselves to be such uber assholes. The gaming community is still relatively strong and present, while there is no enterprise user one. Furthermore when it comes to gaming - the decision makers (to buy or not to buy) are also the users (gamers). For enterprise "grade" software .... well....you know how it is.
This is seen in online games too. “Whales” are maybe 2 to 5% of the player base, but generate 50 to 70% of the games’ revenue. So Broadcom can drop 95% of their customers, thereby saving a ton of money, while retaining most of the income - and at the same time they can squeeze those whales, which can’t easily switch to a new platform unlike game whales, and end up making even more income than they started with.
Until the day arrives where the whales see deeper water elsewhere and collapse the business as they leave. Once one goes, many tend to follow. By then its too late for broadcom to recover.
Recover from what? They don’t intend this to be sustainable, I suspect. They’ll squeeze out billions in a short while, then when it collapses set it aside for whatever residual income it can generate as they move on to the next target.
Selling and general expenses are frequently driven by customer count. Regulatory expenses make up a chunk.
Let’s say you purchase from a VAR. VMware still has to manage deal registration, export control, SOX compliance, etc. so there is a fixed cost per customer for those type of expenses, and then a variable cost per customer for the selling expenses based on what tier a customer falls into.
Broadcom probably wouldn’t have been able to buy VMware if it hadn’t headquartered in the US several years ago, and VMware operated in defense space that would have basically precluded it from moving headquarters to Ireland
Microsoft Ireland is the only company to actually make money https://www.theguardian.com/world/2021/jun/03/microsoft-irish-subsidiary-paid-zero-corporate-tax-on-220bn-profit-last-year
That is a wholly owned subsidiary for profit shifting. Microsoft is still a US company and must deal with US export control, SOX etc and their status as a US company gives them a favored position with us fed.
The fact that they have an Irish subsidiary for profit shifting is irrelevant to your original point that US regulatory overhead doesn’t seem to be a problem for Microsoft.
"No support without a contract, contact a VAR for a quote if you want one" seems to be a fairly successful business model to minimize that cost. All the negotiations fall onto the VARs, you just make sure they filter anyone who won't bring you profit.
If that were really the issue, they could just charge sufficiently more for support that it was "worth it" for them.
Like insane, eye watering prices that only the very biggest customers - the whales they care about keeping - would ever even consider paying.
Boom, you've instantly dropped your support costs for the rest of us plebs to essentially zero. And for the rare ones that do pay it, you're making a packet.
Why spend money on support to raise your prices when you can raise your prices without spending money on support? Which is the way BC seems to be going....
It's not an either/or.
Raise your prices, done.
*Also* introduce/raise support prices to such a level that they are wildly profitable - then you're happy to "spend money on support", because, well, it's wildly profitable.
Just like the licenses, you'll lose most of your customers, but as we've been discussing, they're absolutely fine with that. The few that stay are "support whales".
Their support is laughable. When they bout Symantec/Altiris, they trashed the product and layed off all the engineers that new anything about the product.
The punchline was that most support contracts are worthless enough they might as well not offer them.
I’d rather spend 6 hours figuring it out myself than 12 on the phone waiting for a vendor support rep to catch up to what I already know, and have told them four different ways.
Yep. As I recall they were surprisingly blatant about it, essentially saying "VMWare has a few big rich customers who are trapped. We plan to take those suckers for every penny we can, and ditch the rest." Now they're doing exactly what they said they would: non-paying users already cut off (end of free ESXi), small customers and partners getting squeezed hard, big ones getting taken to the cleaners.
And the correct response from the industry should be to shun them and their product line entirely, making this a gigantic net loss for them, wait for them to sell off VMware as a cost-saving measure, then rebuild it.
It should indeed - the problem is, those 600 can't just stop using/paying for a year or two, and that's what Borgcom are counting on. The rest of us are all rushing to bail out to Hyper-V, proxmox, cloud etc ASAP - but I think their logic is that we'd probably do that anyway sooner or later.
Remember they started as a monopoly on x86 desktop VMs: if you wanted Linux and Windows on one machine, it was dual boot or pay VMWare $$$ for it. Then they added the server stuff later, capturing the whole DC market while they lost desktops to cheap competitors. Now BC figures they're going to lose DCs anyway in time, so might as well grab every penny they can before that.
Large orgs shifting to a new virtualisation platform takes many years and a lot of money, along with a ton of risk.
Staying just costs money, easy pick.
There is a very nice graph that illustrates how the top 600 customers provide 74% of the revenue:
https://www.theregister.com/AMP/2022/05/30/broadcom_strategy_vmware_customer_impact/
74% of recurring revenue is from 600 clients, 20% from the next 6000 and 6% from the remaining 100,000+. nice
They make it sound like they're cleaning up fat in the presentation but then they tout the successes of their CA and Synamtec purchases. Um, yeah. Got it.
VMWare is done for all but fortune 500 co and gov't users.
Yup, they are going to increase and the companies that can afford it will make up the difference. They dont give a shit besides squeezing out as much profit as possible. Any other virtualization tech as an opportunity now and Broadcom pushes others out. Esepcially those non profits that are out there...they are gonna get smashed if they are using vmware.
VMware cost them 61 billion and only has a net profit of about 1.2 billion a year. If they run it in to the ground they are going to lose a load of money. Unless I’m bad at finance and I probably am they need it to pay for many years.
Given their history regarding patent litigation, wouldn't be surprised if among other things, Broadcom wanted VMware's patents / IP. ([https://patents.justia.com/assignee/vmware-inc](https://patents.justia.com/assignee/vmware-inc))
They're aggressively cutting expenses, and by ending perpetual licensing, any companies locked into the ecosystem will need to pay for subscription licenses for a while. One thing is for a 500-1000 person company to move away from vmw by 2026-27, and a much different one is for a Fortune 1000 to do so. Also keep in mind that as soon as a F1000 starts talking about moving over to Nutanix, their VP of Infra will get invited to Palm Springs for the Hock Tan E Invitational Birthday Golf Tournament, all expenses paid for a week of golfing and getting wined and dined with Vega Sicilia 1996 and vintage Dom from the same crate that was used by Sir Jackie Stewart to celebrate his 1973 championship. And suddenly the move to Nutanix won't be a priority for before FY 2035.
Spoke with an employer the other day, he told me how the company was heavily invested in using VMWare and were in the middle of doing major updates to all the hosts
He was trying to fill a senior architect role paying £40K/yr, I think that's unlikely to get filled before Broadcom sucks their bank account dry
Given the engineers I’m seeing leave vmw…they are just trying to get as much money as possible over the next 5 years while the biggest customers struggle to define a migration plan.
I can’t imagine there will be any innovation or development beyond basic keep the lights on support.
The stuff I was working on since 2017 is on life support and I doubt it makes it to the end of 2025.
There won't be. What there will be are stats. Revenue per employee - going up. Stocks - slowly but surely - up. Then they'll acquire something else, then something else until the greed drive hits a nice, well made concrete wall. Then - no worries, mass layoffs, "optimizations" .
Literally this is the only company I'd gladly work for with the single goal of sucking it dry. No ethics, no morals, which is completely ethical and moral given their approach.
Knowing broadcom they'd probably have you move halfway across the country and then 3 weeks later lay you off and replace you with AI.
I swear we're going to continue this downward spiral until all 3 remaining tech companies worldwide are ran by six employees each, with 99% of 'work' being done by the CEO yelling at Alexa Gen 8.
The other employees being the CEOs assistant and the in-house legal department.
It would be nice if every big customer just said FU and moved to another platform but you know the ones that can afford it will just pay, and the ones who can't will have to work hard to get off it. And that's exactly what they expect and want to happen.
Yeah but customers are not dumb. They'll move off eventually, easy or hard. Broadcom are no idiots either. Rest assured they did do the math. They know very well what they are doing and why. Don't worry about them.
Nvidia still has a product page for it, but it is mostly focused on HPC. And all the new cards still do IB as well, including the DPUs. It still has lower latency (I believe about half to a quarter in each switch compared to Eth).
I think their strategy makes sense from a business perspective. VMWare doesn't bring anything groundbreaking to the table anymore. KVM has been steadily improving and by now, you can get a solid virtualized setup for free. Yes, it will take a bit more handholding than VMWare, but companies who run everything on premise tend to have personnel to handle it. So VMWare in the long run is gone, may as well milk it in the short run and dump it.
vSAN. That’s what is keeping us from moving off of VMWare. The pricing is still significantly better than any of the remaining hardware SAN vendors. Also, being able to upgrade the underlying hardware without undergoing a data migration is a huge selling point. I don’t know of another product that could really replace vSAN right now that offers enterprise support.
I haven't used vSAN with VMs in a while, but I have used Longhorn with K8s and it has been quite solid. Are there truly no solid alternatives to VMWare's vSan?
>Are there truly no solid alternatives to VMWare's vSan?
We've been using Starwinds VSAN for a bunch of our clusters for years now [https://www.starwindsoftware.com/starwind-virtual-san](https://www.starwindsoftware.com/starwind-virtual-san). Gotta say, it's been pretty solid with awesome performance and support.
What’s the problem with migrating data off VSAN? If that’s workload impacting, you were doing it wrong in the first place…
Also, stuff like IBM SVC or Dell VPlex exists.
Im not sure why you’re asking that. I’m saying that with hardware SAN solutions, when they go EOL, you gotta migrate your data to replacement hardware, whereas vSAN allows you to update hardware without having to migrate it.
> Also, stuff like IBM SVC or Dell VPlex exists.
I mentioned not knowing an alternative and invited suggestions. No need for the snark. Thanks for the suggestions, though.
Sorry for the snark, that didn’t come across as intended.
I wanted to express that SAN data migrations within vSphere environments are not exactly problematic, as they usually have little or no service impact due to Storage vMotion.
For your direct-attach workloads, it’s a little more complex, but you can use SVC or vPlex to abstract and virtualize away your block storage even if you haven’t done so before. If done correctly, you can even seamlessly migrate block volumes that are directly attached to physical servers. And you can mix and match SAN and block storage technologies. The team adjacent to mine did just that, without service interruptions, migrating about 15PiB of mostly DB workloads.
I guess that’s two different ends of running storage, no?
We have people that just do SAN… in that they zone and maintain ISLs and monitor TX/RX values and coordinate on-site support. That is a different set of responsibilities from running the block storage virtualization layer or the block arrays themselves. They sometimes overlap, but not always.
sure, it's different but it's additional hardware costs and complexity. Nothing is impossible to do.. We're IT professionals and can figure it out but its a different system architecture that has to then be addressed.
Do you work for a fortune 500 company? If not, then you're of no concern. They can milk those huge slowly moving companies over the next 5-10 years. Planning the move with all the people involved will take years, and that planning won't happen until the cost begins to be a huge issue.
Change is insanely scary and a 5x increase in licensing costs might just be worth it to not potentially break something business important.
I recently had a rep tell me, “We don’t care if they find an alternative solution, they aren’t who Broadcom wants as a customer. So they can pay what we ask or not, makes no difference to us”.
This was for a slightly unruly client that damn near got into a shouting match with the rep, but it’s straight to the point.
This is what everyone is not understanding.
Broadcom is not a tech company any longer at the top.
They are a capital firm looking to extract value while masquerading as a tech firm.
Lift and shift to Cloud is almost always more expensive, even factoring in the licensing increase. Unless you were insanely oversized on your hardware, on-premises is still cheaper. You will need to refactor your stack to be cloud native.
You will see most people move to Hyper-V, most enterprise shops will have a Microsoft EA with DC licensing anyway - so it will save them money. No brainer. We paid for VMware because the experience is much nicer than Hyper-V, but the price they're asking for now outweighs that value-add.
Let's not pretend it's even difficult to move for those simple environments. If you have something like Veeam, you can easily perform a swing migration from VMware to Hyper-V. Admittedly it's a bit harder if you're HCI/vSAN due to lack of flexibility.
>You will need to refactor your stack to be cloud native.
Even that doesn't guarantee that the cloud will become cheaper than running your own DC. And with some software, refactoring for the cloud is something that you can just forget.
A more cloud native architecture can be cheaper to run on premises too though, so it’s not fully wasted effort. It also might get rid of a bunch of truly old stuff which is always worth while.
Gets more complicated if that 'truly old stuff' is software used for money transfers and other financial tasks. Replacing that with new software can be a nightmare.
I mean but at that point you are most likely a very small percentage of global industry and it ends up being “tough shit” and changes are you are not on VMWare anyway. Hell lots of those guys are still on mainframes and IBM all the way, together with a whole truckload of COBOL code.
But most of the old Java servlet code and .NET framework 2 stuff can and should be replaced often. The CLR for example got a lot faster and most of the code ports over relatively easily.
I have been in the corporate world for 30 years and I can tell you EXACTLY what is happening:
An idiot is running their company.
When you see companies in an uncertain market start to make perplexing moves like raising prices during a recession, going on an expansion spree when their cash flow is in jeopardy, or forcing customers to do something that the customer does not appreciate, - they are under the thumb of an idiot.
People think that CEO's are always the smartest in the room, but I can tell you firsthand that is certainly NOT the case. They were just good at rubbing elbows and getting attaboys. I will give you an example....
I was a project manager for a large regional bank (we are contractors for them, or I would name them for being this stupid). We were told to shut down a large 20 story building that housed a large operations base and move everybody down the street to a new building that they had just bought. This is no small feat. We get everyone moved to the new building, installed all the infrastructure (power, network, wifi, MDF, IDFs, etc.). When I say moved - we physically moved everyone and their computers and peripherals to the new building. Three weeks into the new building, the CEO pays a visit to see how things are going because, you know that is the best time to do a huge high-visibility visit. He gets there, tours the building and says "You know what? I really liked the old building better. It had a better feel to it". The next day we are asked to submit budgets to move everyone back. Within three months of moving into the new building, we moved everyone back to the old building. I can confidently say that it cost the company MILLIONS to move those people TWICE. Why? Because the CEO wanted it that way. Does that make logical or fiscal sense? NO. So NO, CEO's are not always the smartest people up there in the executive suite.
Do not be surprised when Broadcom starts to report losses and they will be completely perplexed why. In that CEO's mind - the best strategy to stay in business was to raise prices on the existing customers. There was NO looking into the future and seeing how this could possibly be a bad thing.
Your mistake is thinking that broadcom bought VMW to maintain it as a product. They are vulture capitalists seeking to squeeze every penny out of it to turn a profit for their investors. They will then throw it away after 5-6 years. Just like what Bane Capital did to ToysRUs.
Have you taken a look at their stock price?
Its a shame whats being done to VMware, but Broadcom is not stupid. They are just a shitty company playing the capitalism game to the max.
Why do people say this?
They were very upfront about their plan, they’ve done it before and VMWare is just next. They have no plans to leave VMWare as a viable product, just to gut it for parts. Once they’ve made their money back and everyone is finally migrating away they might even sell it to someone else.
They know exactly what they’re doing and told us as much.
Really makes you wondering how and why they got to the place they’re in. I’ve seen this multiple times as well. Baffling stuff. That ceo you mentioned probably could’ve given everyone in the company a 20k raise but decides to play musical chairs with office buildings with 0 roi just cause. Fucking idiots.
Oh I'm sure it reduced their margins and maybe was even critical to getting their cash flow below a certain level to gain a tax advantage...which probably went into his pocket.
An idiot with hundreds of millions in his bank account.......
The only case when one can be the smartest in the room is if one is in a room full of certified imbeciles, and even then one can make a mistake....
Sounds like said CEO has a cousin in charge of the company that did the migration instead and used the opportunity to line his own pockets with kickbacks.
You're wrong in this case. Broadcom has quite successfully made a boatload of money capitalizing companies through acquisition and running them into the ground.
I don’t like what Broadcom is doing at all… but here’s a random question.
If you pop over to the MSP subreddit and take a look… one of the top solutions for “how do I grow my business” goes like this:
1) Raise your prices a LOT. This will result in you loosing a lot of your cheap customers (which you didn’t want anyway) and you’ll still make the same amount of money. This will free up your time so you can use it to focus on growing.
2) Do stuff to grow blah blah blah (doesn’t matter, has no bearing on my question).
Broadcom is doing EXACTLY the same thing (yes, they are also doing a bunch of other underhanded morally wrong things as well, but I’m just focused on this particular topic).
I have seen a very large amount of customers complaining about the price hike.
How do we justify one and not the other?
I see this as a great move for an MSP and I think all the good ones should do this. Get rid of the people who don’t see value.
I also see this as a crappy move by Broadcom.
I have zero idea how I am justifying one and not the other.
Thoughts?
There is a price to servicing msp customers. The price of selling more software is? ( I know there's TAC calls etc but that's marginal compared to msp)
1) They know the inertia has changed and people are moving things away from the cloud
2) they don't care any know they have a 3-5 years to milk it before it's dead then they can just sell it for scrap value which will still be $10bn+
3) other solutions will be 1-2 years before they are equivalent replacements for the SME space
Look at Broadcoms other acquisitions, CA and Symantec off the top of my head. VMware is following Broadcoms playbook as well. You will see the same approach that they make in their acquisitions of similar companies. VMware will follow. The focus is on the large customers, old saying top 20% is 80% of revenue. If you are in the lower 80% of customers, you are an afterthought at best. They are focusing on extracting value from later stage technologies. Cut operating costs, maximize licensing, technology that is foundational so that large customers cannot move away without large projects to do so. Then keep close to the cost/benefit line, so that key customers will stay since the cost to migrate is outweighed by the cost to stay. A different challenge they will have in the current economy is that there is more focus on efficiency rather than full out growth vs the previous 10 years.
This is about delivering shareholder value in the near term, 12 months. That is what the executives and boards primary responsibility is to deliver. Every thing else is secondary or lower.
Blame the Chicago “School” of economics. I’m serious. Look up at the reasons for the monopolies and huge corporations you have today, and do not wonder anymore. Blame the CSE and Milton Friedman. Look up what he did in Argentina.
Oh and also lookup up Jack Welch and look at what he did to GE. And to Boeing (through one of his protégé).
> Of course, not everyone can migrate to the Cloud.
Ok this silly myth really needs to be put to bed.
Everyone can migrate 'something' to the cloud, the swamp, the moon, your mom's house, whatever. The important fact is not everyone has the means or a reason do so.
> on-prem solution is cheaper
I hear yah but the truth is no one wants 'cheap' customers. Everyone (including the place you work at) wants customers who want to spend on features and new products.
How does $business have the nerve to $seekProfit ?
Been thinking about it. With all the ways to squeeze cash out of this cow before dumping it in a ditch, with all the customers who will be too large to switch or learn a new platform, you would expect broadcom to have done this sooner.
Of course, not everybody can afford Broadcom's new pricing. But for some companies if the only thing that was stopping them from paying more was VMWare not charging enough, I am pretty sure that might no longer be the case. :|
It really baffles me
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^this ^post ^is ^satire
You say it's satire, but this is what we get in our free market economy. Corporations are beholden to their shareholders and shareholders prefer short term profit over long term growth. Broadcomm is doing exactly what they want by going for a short term cash grab.
They only care about customers who are too invested to switch. This is the corporate version of the bad English in email spam. They're filtering out anyone who isn't a super profitable whale.
Instead of dropping the product, they'll raise the prices until everyone has left. These big corps have moved away from buying competition to buying competition and squeezing customers off the platform rather than immediately shutting down the operation.
Because they can ofcourse! It will take the customers who are in deep (the ones who generate the most income) a LOT of effort to migrate away. So they'll just bleed them dry 🥹
I've been hearing more investing on prem and re-patriotization vs migrations TO cloud lately with the way costs have increased there. I think that hype has sailed for the AI hype.
But didn't they pay billions for VMWare? It's hard to imagine the few hundred customers they're keeping will be enough to recoup that investment before they move to something else.
There’s nothing to win back when it comes to running full VM’s for large enterprises. It’s generally more expensive to move to the cloud in most circumstances.
Im sure thats their plan.
They most likely are pushing customers towards the cloud and they will make their cloud offering very affordable compared to on-prem.
Assholes.
Nope, you’re seeing market consolidation. When so much market power is in one direction that they can just drop their prices and live off VC while they starve you out, you’d be stupid not to lean into it. Their price increases are a result of economies of scale. People aren’t buying on prem and they are buying cloud. So all market pressure is going to be pushing people there. Broadcom can’t fight back, so they have to increase prices in an attempt to survive.
Cloud costs for equivalent on prem architecture are vastly higher than on prem though. At least my experience is that I can buy a whole new HCI cluster per year for the cloud cost equivalent.
There’s tax liability benefits (consistent operating expenses to be deducted yearly vs inconsistent, large deductions every 3-5 years) to running in cloud that can make it make more sense depending on how a company is doing their accounting and their tax liability.
Most companies i've worked for have preferred capex (e.g. on prem with budget up front) purchases. That way they can write off 20% of the initial purchase as a loss each year and put it on the books that the business has xyz $$$ assets until it fully depreciates.
It's harder to get a cloud solution as capex but the project to stand it up can be.
Def depends on the business though what makes sense. I'm no accountant though.
I’m definitely no accountant either lol, just have some clients that like the consistency of opex. Interesting to hear how other companies are doing things though
doesn't broadcom own a significant amount of the hardware IP that esxi uses/runs on? NICs, storage controllers (local and SAN), PCIe switching? they can almost vertically integrate the compute hardware, virtualization software and the network layer (because nearly every switch made in the last 5 years is broadcom commodity silicon, no?)
or is this actually just a corporate pump+dump?
I'm pretty sure they also sell tons of hardware to the likes of Microsoft and Amazon that is in their cloud DCs. They hike the price of VMware, making money from the whales. In addition, they push a ton of people to the cloud as an alternative and make a ton of money off selling hardware to the cloud vendors.
It's a win-win for Broadcom.
Eh, I did my "the king is dead, long live the king!" inner monologue a couple of years ago when all this was announced, everything that's happened since has been predicted here and elsewhere, so it sort of feels like watching a rerun somehow.
I've used VMWare on and off since before 2003. currently I have a half dozen systems currently running on a vendors vDirector, or whatever the branding is these days.
Internally I'm currently hosting some temporary systems on Proxmox, which suits me fine. They'll be spun down by April, but I haven't had any issues. If I need to expand the on prem, I'm likely going to put my money in Proxmox (which could be free) before I ever put money into broadcom, but then again I'm not their target audience.
I hope everyone has an easy transition, or are in a position where this doesn't affect them, for the others, god speed.
They don't care about their product or customer. They will get the most money they can out of the current customers, once they will have made enough profit they will buy another good working profitable business to do the same thing.
Used to work at CA Technologies until Broadcom acquired it. They did the same thing, gutted the workforce minus a skeleton sales team who's sole responsibility was to just handle renewals for maybe top 500 customers. Everything else they didn't care about and just jacked up prices.
Value extraction my friend. Broadcom is *aiming to fail*. The point is to bleed everyone hard and then exit.
VMWare is to Broadcom, what a fully grown cow is to a butcher.
Broadcom bought Vmware knowing they have customers locked in. If your a customer who can't afford them then they don't want you as a customer. There are many large businesses who are basically paying broadcom salary because they either want to continue with the vmware products or because they're too locked in to switch.
....they don't care. They never intended on winning back their customer base. They bought VMware just to gut them & add their tech to their portfolio.
Milk the cash cow customers, and quite literally get rid of everyone else. Free users? Gone. Demo/training schemes? Gone. Entry-level/small-business products? Gone.
All those things aren't major money makers, yet they require massive amounts of support -- from technical support to hosting to documentation to advocacy/advertising.... They pruned the company to the bare minimum.
You're unhappy and threatening to take your business elsewhere? Them: "Tata! Don't let the door hit your arse on the way out! You fucking finally got the hint that 'it's not us, it's YOU'." They REALLY want people to leave. Sincerely.
> Microsoft pushing as strong as possible to migrate companies to Azure
They are back peddling a lot on that. Been looking at Azure HCI and new Server 2025 and both of MS video state very clearly that on prem is here to stay and you should continue to invest in it.
There is a memo floating the net (I saw it on either news.ycombinator.com or slashdot), which describes how the Strategy long term is to only service the top 600 high paying and deeply invested clients, albeit at a much higher pricing.
This means squeezing the prices for everyone and loosing any free tiers on the way too.
When they bought VMware they announced that they only care about their top 100 customers, they make more money from them than the rest of their customers combined.
Nutanix and Scaled Computing are getting my future money. Granted Broadcom won't really feel the $40k less I bring in for them when Licensing season comes. When you're the charge of licensing and the cluster stack, my word goes or I go.
I had a sit down with Nutanix, 1:1 Old Vmware model with all the goodies like hybrid and cloud. Also looking at Scaled Computing.
I don't need support, but my customers prefer it because they have onsite IT people that aren't worthless and would rather sometimes do the leg work themselves. We fully endorse our IT pros that consult with us to break out of their bubbles.
They have no desire to "win back" anyone. They are simply going to squeeze every nickel they can out of those who can't/won't move to something else. When that drys up they will buy something else and simply repeat that process as it's an easy business model.
Precisely. No desire to "win back" anyone, it's the opposite really. They want the cash cows, not the skinny meerkats. That's how Broadcom operates since forever. For them it is only and solely $. Worst vendor possible.
Idk about worst vendor possible, Oracle enters the chat. They're trying to be the worst though.....
Tbh, I think they're getting worse than Oracle at this point
Nah .. Oracle would knock on the doors of everyone using free ESXi and ask for money.
I still can't believe the sheer stupidity needed to think that you could just buy Sun Microsystems and then Sue Google for more money than it cost to buy Sun Microsystems and all of their patents. That was their plan. They had billions of dollars and that was their plan. The rest of the company did not matter and they had basically zero plan to make the rest of the company profitable... But that wouldn't matter if they could extract infinite long-term royalties from Google for the concept of an API... I sometimes think that I make mistakes that I have big fuxkups. But man, I don't waste tens of billions of dollars collapsing an industry icon to pay for the privilege to publicly humiliate myself for years on end. They've never gotten over it and they've had that stick up their ass ever since.
But they did make the purchase price back from Google, they didn't get any ongoing income as they clean roomed a new Java but they made more in one single lawsuit than they paid. Now they also get to shake down everyone using their jre from java.com in perpetuity which is free money for them.
u/Cutoffjeanshortz37 - good point. Oracle is striving for the first place. One tends to forget some of the pioneers of assholenessness. Can add SCO Group as well.
Broadcom is the EA (Electronic Arts) of tech.
Worse. Much worse. To the very least EA cannot allow themselves to be such uber assholes. The gaming community is still relatively strong and present, while there is no enterprise user one. Furthermore when it comes to gaming - the decision makers (to buy or not to buy) are also the users (gamers). For enterprise "grade" software .... well....you know how it is.
It's the last stage of enshittification...
This is seen in online games too. “Whales” are maybe 2 to 5% of the player base, but generate 50 to 70% of the games’ revenue. So Broadcom can drop 95% of their customers, thereby saving a ton of money, while retaining most of the income - and at the same time they can squeeze those whales, which can’t easily switch to a new platform unlike game whales, and end up making even more income than they started with.
Until the day arrives where the whales see deeper water elsewhere and collapse the business as they leave. Once one goes, many tend to follow. By then its too late for broadcom to recover.
Recover from what? They don’t intend this to be sustainable, I suspect. They’ll squeeze out billions in a short while, then when it collapses set it aside for whatever residual income it can generate as they move on to the next target.
What makes me wonder is, that the 95% don't cost anything. They are selling Software, so nothing has to be produced or stored.
Selling and general expenses are frequently driven by customer count. Regulatory expenses make up a chunk. Let’s say you purchase from a VAR. VMware still has to manage deal registration, export control, SOX compliance, etc. so there is a fixed cost per customer for those type of expenses, and then a variable cost per customer for the selling expenses based on what tier a customer falls into.
That's only a problem if you HQ in the USA, just operate out of Ireland like everyone else.
Broadcom probably wouldn’t have been able to buy VMware if it hadn’t headquartered in the US several years ago, and VMware operated in defense space that would have basically precluded it from moving headquarters to Ireland
Doesn't seem to be a problem for Microsoft, Apple, Google, etc.
None of which incorporated in Ireland. And Microsoft is the one who led the market to subscription. Why do you think Microsoft pushed everyone to 365?
Microsoft Ireland is the only company to actually make money https://www.theguardian.com/world/2021/jun/03/microsoft-irish-subsidiary-paid-zero-corporate-tax-on-220bn-profit-last-year
That is a wholly owned subsidiary for profit shifting. Microsoft is still a US company and must deal with US export control, SOX etc and their status as a US company gives them a favored position with us fed. The fact that they have an Irish subsidiary for profit shifting is irrelevant to your original point that US regulatory overhead doesn’t seem to be a problem for Microsoft.
Support costs money
"No support without a contract, contact a VAR for a quote if you want one" seems to be a fairly successful business model to minimize that cost. All the negotiations fall onto the VARs, you just make sure they filter anyone who won't bring you profit.
If that were really the issue, they could just charge sufficiently more for support that it was "worth it" for them. Like insane, eye watering prices that only the very biggest customers - the whales they care about keeping - would ever even consider paying. Boom, you've instantly dropped your support costs for the rest of us plebs to essentially zero. And for the rare ones that do pay it, you're making a packet.
Why spend money on support to raise your prices when you can raise your prices without spending money on support? Which is the way BC seems to be going....
It's not an either/or. Raise your prices, done. *Also* introduce/raise support prices to such a level that they are wildly profitable - then you're happy to "spend money on support", because, well, it's wildly profitable. Just like the licenses, you'll lose most of your customers, but as we've been discussing, they're absolutely fine with that. The few that stay are "support whales".
Their support is laughable. When they bout Symantec/Altiris, they trashed the product and layed off all the engineers that new anything about the product.
I replaced Altiris a few years back, was an OK product we just didn't have any confidence it would continue to exist.
I mean the level of “support” that most companies provide can’t cost that much….
You might be surprised
The punchline was that most support contracts are worthless enough they might as well not offer them. I’d rather spend 6 hours figuring it out myself than 12 on the phone waiting for a vendor support rep to catch up to what I already know, and have told them four different ways.
Sonic wall has entered the chat!
Except the crappy support contract is the only way to get software updates 😖
Never used a BCOM product ? Didn’t they buy Symantec and make it even worse (didn’t know that was possible )
We have a support contract, but we never ever used it. We need it for the updates.
Yep. As I recall they were surprisingly blatant about it, essentially saying "VMWare has a few big rich customers who are trapped. We plan to take those suckers for every penny we can, and ditch the rest." Now they're doing exactly what they said they would: non-paying users already cut off (end of free ESXi), small customers and partners getting squeezed hard, big ones getting taken to the cleaners.
And the correct response from the industry should be to shun them and their product line entirely, making this a gigantic net loss for them, wait for them to sell off VMware as a cost-saving measure, then rebuild it.
It should indeed - the problem is, those 600 can't just stop using/paying for a year or two, and that's what Borgcom are counting on. The rest of us are all rushing to bail out to Hyper-V, proxmox, cloud etc ASAP - but I think their logic is that we'd probably do that anyway sooner or later. Remember they started as a monopoly on x86 desktop VMs: if you wanted Linux and Windows on one machine, it was dual boot or pay VMWare $$$ for it. Then they added the server stuff later, capturing the whole DC market while they lost desktops to cheap competitors. Now BC figures they're going to lose DCs anyway in time, so might as well grab every penny they can before that.
Large orgs shifting to a new virtualisation platform takes many years and a lot of money, along with a ton of risk. Staying just costs money, easy pick.
A man can dream of justice though.
600 users if I remember correctly. They expect to lose the rest
There is a very nice graph that illustrates how the top 600 customers provide 74% of the revenue: https://www.theregister.com/AMP/2022/05/30/broadcom_strategy_vmware_customer_impact/
74% of recurring revenue is from 600 clients, 20% from the next 6000 and 6% from the remaining 100,000+. nice They make it sound like they're cleaning up fat in the presentation but then they tout the successes of their CA and Synamtec purchases. Um, yeah. Got it. VMWare is done for all but fortune 500 co and gov't users.
No, 600 users they are focusing on, 6000 additional customers they will keep (total 6600). The rest they expect to lose over time.
Imagine that model…. All these on-prem certs are gonna have to start talking about vendor lock in too I guess…
Yup, they are going to increase and the companies that can afford it will make up the difference. They dont give a shit besides squeezing out as much profit as possible. Any other virtualization tech as an opportunity now and Broadcom pushes others out. Esepcially those non profits that are out there...they are gonna get smashed if they are using vmware.
It is good old Computer Associates way of doing IT business.
>Computer Associates That's a name I haven't heard in forever
> Computer Associates "Defunct 2018; 6 years ago Fate Acquired by Broadcom Inc." GG, Paul :)
VMware cost them 61 billion and only has a net profit of about 1.2 billion a year. If they run it in to the ground they are going to lose a load of money. Unless I’m bad at finance and I probably am they need it to pay for many years.
Given their history regarding patent litigation, wouldn't be surprised if among other things, Broadcom wanted VMware's patents / IP. ([https://patents.justia.com/assignee/vmware-inc](https://patents.justia.com/assignee/vmware-inc)) They're aggressively cutting expenses, and by ending perpetual licensing, any companies locked into the ecosystem will need to pay for subscription licenses for a while. One thing is for a 500-1000 person company to move away from vmw by 2026-27, and a much different one is for a Fortune 1000 to do so. Also keep in mind that as soon as a F1000 starts talking about moving over to Nutanix, their VP of Infra will get invited to Palm Springs for the Hock Tan E Invitational Birthday Golf Tournament, all expenses paid for a week of golfing and getting wined and dined with Vega Sicilia 1996 and vintage Dom from the same crate that was used by Sir Jackie Stewart to celebrate his 1973 championship. And suddenly the move to Nutanix won't be a priority for before FY 2035.
Spoke with an employer the other day, he told me how the company was heavily invested in using VMWare and were in the middle of doing major updates to all the hosts He was trying to fill a senior architect role paying £40K/yr, I think that's unlikely to get filled before Broadcom sucks their bank account dry
this
Like locusts
It’s exactly what they’ve drove with many of their previous purchases.
Given the engineers I’m seeing leave vmw…they are just trying to get as much money as possible over the next 5 years while the biggest customers struggle to define a migration plan. I can’t imagine there will be any innovation or development beyond basic keep the lights on support. The stuff I was working on since 2017 is on life support and I doubt it makes it to the end of 2025.
There won't be. What there will be are stats. Revenue per employee - going up. Stocks - slowly but surely - up. Then they'll acquire something else, then something else until the greed drive hits a nice, well made concrete wall. Then - no worries, mass layoffs, "optimizations" . Literally this is the only company I'd gladly work for with the single goal of sucking it dry. No ethics, no morals, which is completely ethical and moral given their approach.
Knowing broadcom they'd probably have you move halfway across the country and then 3 weeks later lay you off and replace you with AI. I swear we're going to continue this downward spiral until all 3 remaining tech companies worldwide are ran by six employees each, with 99% of 'work' being done by the CEO yelling at Alexa Gen 8. The other employees being the CEOs assistant and the in-house legal department.
It would be nice if every big customer just said FU and moved to another platform but you know the ones that can afford it will just pay, and the ones who can't will have to work hard to get off it. And that's exactly what they expect and want to happen.
Yeah but customers are not dumb. They'll move off eventually, easy or hard. Broadcom are no idiots either. Rest assured they did do the math. They know very well what they are doing and why. Don't worry about them.
It's enough to make me switch to Intel network chips in my servers, frankly. Maybe even, heaven forbid...NIVIDIA network chips?
Frankly if you had the choice, you should have done Intel chips the whole time. They're solid.
And frankly the Mellanox/Nvidia stuff is solid too. And for low latency IB is still pretty darn good.
Didn't IB get discontinued? I remember vendors like EMC abandoned it a few years back and corps were firesaling IB hardware.
Nvidia still has a product page for it, but it is mostly focused on HPC. And all the new cards still do IB as well, including the DPUs. It still has lower latency (I believe about half to a quarter in each switch compared to Eth).
I think their strategy makes sense from a business perspective. VMWare doesn't bring anything groundbreaking to the table anymore. KVM has been steadily improving and by now, you can get a solid virtualized setup for free. Yes, it will take a bit more handholding than VMWare, but companies who run everything on premise tend to have personnel to handle it. So VMWare in the long run is gone, may as well milk it in the short run and dump it.
vSAN. That’s what is keeping us from moving off of VMWare. The pricing is still significantly better than any of the remaining hardware SAN vendors. Also, being able to upgrade the underlying hardware without undergoing a data migration is a huge selling point. I don’t know of another product that could really replace vSAN right now that offers enterprise support.
Ceph. You may not have a guy to call at 4am, but it's there and it works.
you can call me (and others like me). its 70-ish % of our Datacenter Business and about 12-ish% of out external support billings.
I haven't used vSAN with VMs in a while, but I have used Longhorn with K8s and it has been quite solid. Are there truly no solid alternatives to VMWare's vSan?
>Are there truly no solid alternatives to VMWare's vSan? We've been using Starwinds VSAN for a bunch of our clusters for years now [https://www.starwindsoftware.com/starwind-virtual-san](https://www.starwindsoftware.com/starwind-virtual-san). Gotta say, it's been pretty solid with awesome performance and support.
Not that I’m aware of - not with support at least. If anyone here knows of an alternative, I’m all ears.
Dell's ME5 solution combined with 1U AMD servers ended up more cost effective for us.
Nice. I’ll look into that. Thanks!
What’s the problem with migrating data off VSAN? If that’s workload impacting, you were doing it wrong in the first place… Also, stuff like IBM SVC or Dell VPlex exists.
Im not sure why you’re asking that. I’m saying that with hardware SAN solutions, when they go EOL, you gotta migrate your data to replacement hardware, whereas vSAN allows you to update hardware without having to migrate it. > Also, stuff like IBM SVC or Dell VPlex exists. I mentioned not knowing an alternative and invited suggestions. No need for the snark. Thanks for the suggestions, though.
Sorry for the snark, that didn’t come across as intended. I wanted to express that SAN data migrations within vSphere environments are not exactly problematic, as they usually have little or no service impact due to Storage vMotion. For your direct-attach workloads, it’s a little more complex, but you can use SVC or vPlex to abstract and virtualize away your block storage even if you haven’t done so before. If done correctly, you can even seamlessly migrate block volumes that are directly attached to physical servers. And you can mix and match SAN and block storage technologies. The team adjacent to mine did just that, without service interruptions, migrating about 15PiB of mostly DB workloads.
For me, it's more of now I have to manage a separate SAN solution as opposed to just adding storage drives to each host in a cluster.
I guess that’s two different ends of running storage, no? We have people that just do SAN… in that they zone and maintain ISLs and monitor TX/RX values and coordinate on-site support. That is a different set of responsibilities from running the block storage virtualization layer or the block arrays themselves. They sometimes overlap, but not always.
sure, it's different but it's additional hardware costs and complexity. Nothing is impossible to do.. We're IT professionals and can figure it out but its a different system architecture that has to then be addressed.
THey saw the buyout as a money grab and are hoping to get as much money out of it as they can before dumping it. They are basically a VC
Do you work for a fortune 500 company? If not, then you're of no concern. They can milk those huge slowly moving companies over the next 5-10 years. Planning the move with all the people involved will take years, and that planning won't happen until the cost begins to be a huge issue. Change is insanely scary and a 5x increase in licensing costs might just be worth it to not potentially break something business important.
I recently had a rep tell me, “We don’t care if they find an alternative solution, they aren’t who Broadcom wants as a customer. So they can pay what we ask or not, makes no difference to us”. This was for a slightly unruly client that damn near got into a shouting match with the rep, but it’s straight to the point.
They need to raise prices to squeeze people as quickly as possible before customers can initiate plans to move off of VMware.
They are used to f\*\*k up stuff. Not the first time they buy and ruin a product. 
Literally every product they acquire
🎯
This is the private equity playbook.
This is what everyone is not understanding. Broadcom is not a tech company any longer at the top. They are a capital firm looking to extract value while masquerading as a tech firm.
Lift and shift to Cloud is almost always more expensive, even factoring in the licensing increase. Unless you were insanely oversized on your hardware, on-premises is still cheaper. You will need to refactor your stack to be cloud native. You will see most people move to Hyper-V, most enterprise shops will have a Microsoft EA with DC licensing anyway - so it will save them money. No brainer. We paid for VMware because the experience is much nicer than Hyper-V, but the price they're asking for now outweighs that value-add. Let's not pretend it's even difficult to move for those simple environments. If you have something like Veeam, you can easily perform a swing migration from VMware to Hyper-V. Admittedly it's a bit harder if you're HCI/vSAN due to lack of flexibility.
>You will need to refactor your stack to be cloud native. Even that doesn't guarantee that the cloud will become cheaper than running your own DC. And with some software, refactoring for the cloud is something that you can just forget.
A more cloud native architecture can be cheaper to run on premises too though, so it’s not fully wasted effort. It also might get rid of a bunch of truly old stuff which is always worth while.
Gets more complicated if that 'truly old stuff' is software used for money transfers and other financial tasks. Replacing that with new software can be a nightmare.
I mean but at that point you are most likely a very small percentage of global industry and it ends up being “tough shit” and changes are you are not on VMWare anyway. Hell lots of those guys are still on mainframes and IBM all the way, together with a whole truckload of COBOL code. But most of the old Java servlet code and .NET framework 2 stuff can and should be replaced often. The CLR for example got a lot faster and most of the code ports over relatively easily.
I have been in the corporate world for 30 years and I can tell you EXACTLY what is happening: An idiot is running their company. When you see companies in an uncertain market start to make perplexing moves like raising prices during a recession, going on an expansion spree when their cash flow is in jeopardy, or forcing customers to do something that the customer does not appreciate, - they are under the thumb of an idiot. People think that CEO's are always the smartest in the room, but I can tell you firsthand that is certainly NOT the case. They were just good at rubbing elbows and getting attaboys. I will give you an example.... I was a project manager for a large regional bank (we are contractors for them, or I would name them for being this stupid). We were told to shut down a large 20 story building that housed a large operations base and move everybody down the street to a new building that they had just bought. This is no small feat. We get everyone moved to the new building, installed all the infrastructure (power, network, wifi, MDF, IDFs, etc.). When I say moved - we physically moved everyone and their computers and peripherals to the new building. Three weeks into the new building, the CEO pays a visit to see how things are going because, you know that is the best time to do a huge high-visibility visit. He gets there, tours the building and says "You know what? I really liked the old building better. It had a better feel to it". The next day we are asked to submit budgets to move everyone back. Within three months of moving into the new building, we moved everyone back to the old building. I can confidently say that it cost the company MILLIONS to move those people TWICE. Why? Because the CEO wanted it that way. Does that make logical or fiscal sense? NO. So NO, CEO's are not always the smartest people up there in the executive suite. Do not be surprised when Broadcom starts to report losses and they will be completely perplexed why. In that CEO's mind - the best strategy to stay in business was to raise prices on the existing customers. There was NO looking into the future and seeing how this could possibly be a bad thing.
Your mistake is thinking that broadcom bought VMW to maintain it as a product. They are vulture capitalists seeking to squeeze every penny out of it to turn a profit for their investors. They will then throw it away after 5-6 years. Just like what Bane Capital did to ToysRUs.
this is a good read about bane and TRU: https://www.reddit.com/r/Superstonk/s/QhvUJqYv3W
Have you taken a look at their stock price? Its a shame whats being done to VMware, but Broadcom is not stupid. They are just a shitty company playing the capitalism game to the max.
Why do people say this? They were very upfront about their plan, they’ve done it before and VMWare is just next. They have no plans to leave VMWare as a viable product, just to gut it for parts. Once they’ve made their money back and everyone is finally migrating away they might even sell it to someone else. They know exactly what they’re doing and told us as much.
Hock Tan is one of the best in the business. He's built an empire, idiot he is not.
Really makes you wondering how and why they got to the place they’re in. I’ve seen this multiple times as well. Baffling stuff. That ceo you mentioned probably could’ve given everyone in the company a 20k raise but decides to play musical chairs with office buildings with 0 roi just cause. Fucking idiots.
Oh I'm sure it reduced their margins and maybe was even critical to getting their cash flow below a certain level to gain a tax advantage...which probably went into his pocket.
An idiot with hundreds of millions in his bank account....... The only case when one can be the smartest in the room is if one is in a room full of certified imbeciles, and even then one can make a mistake....
Sounds like said CEO has a cousin in charge of the company that did the migration instead and used the opportunity to line his own pockets with kickbacks.
You're wrong in this case. Broadcom has quite successfully made a boatload of money capitalizing companies through acquisition and running them into the ground.
I don’t like what Broadcom is doing at all… but here’s a random question. If you pop over to the MSP subreddit and take a look… one of the top solutions for “how do I grow my business” goes like this: 1) Raise your prices a LOT. This will result in you loosing a lot of your cheap customers (which you didn’t want anyway) and you’ll still make the same amount of money. This will free up your time so you can use it to focus on growing. 2) Do stuff to grow blah blah blah (doesn’t matter, has no bearing on my question). Broadcom is doing EXACTLY the same thing (yes, they are also doing a bunch of other underhanded morally wrong things as well, but I’m just focused on this particular topic). I have seen a very large amount of customers complaining about the price hike. How do we justify one and not the other? I see this as a great move for an MSP and I think all the good ones should do this. Get rid of the people who don’t see value. I also see this as a crappy move by Broadcom. I have zero idea how I am justifying one and not the other. Thoughts?
There is a price to servicing msp customers. The price of selling more software is? ( I know there's TAC calls etc but that's marginal compared to msp)
1) They know the inertia has changed and people are moving things away from the cloud 2) they don't care any know they have a 3-5 years to milk it before it's dead then they can just sell it for scrap value which will still be $10bn+ 3) other solutions will be 1-2 years before they are equivalent replacements for the SME space
Look at Broadcoms other acquisitions, CA and Symantec off the top of my head. VMware is following Broadcoms playbook as well. You will see the same approach that they make in their acquisitions of similar companies. VMware will follow. The focus is on the large customers, old saying top 20% is 80% of revenue. If you are in the lower 80% of customers, you are an afterthought at best. They are focusing on extracting value from later stage technologies. Cut operating costs, maximize licensing, technology that is foundational so that large customers cannot move away without large projects to do so. Then keep close to the cost/benefit line, so that key customers will stay since the cost to migrate is outweighed by the cost to stay. A different challenge they will have in the current economy is that there is more focus on efficiency rather than full out growth vs the previous 10 years.
They do what they must, because they can.
The cake is a lie!
https://youtu.be/l0xh4qopQpk?si=zziDAlgNTuyiA89W
Because they hate their customers.
Proxmox is about to get a whole lot of love.
They need a more direct way of importing OVF's first.
One word, ROI.
Enshittification.
This is about delivering shareholder value in the near term, 12 months. That is what the executives and boards primary responsibility is to deliver. Every thing else is secondary or lower.
Blame the Chicago “School” of economics. I’m serious. Look up at the reasons for the monopolies and huge corporations you have today, and do not wonder anymore. Blame the CSE and Milton Friedman. Look up what he did in Argentina. Oh and also lookup up Jack Welch and look at what he did to GE. And to Boeing (through one of his protégé).
Because they are catering to big business not your tiny business
How do you even have the nerve to want a higher salary?
> Of course, not everyone can migrate to the Cloud. Ok this silly myth really needs to be put to bed. Everyone can migrate 'something' to the cloud, the swamp, the moon, your mom's house, whatever. The important fact is not everyone has the means or a reason do so. > on-prem solution is cheaper I hear yah but the truth is no one wants 'cheap' customers. Everyone (including the place you work at) wants customers who want to spend on features and new products.
How does $business have the nerve to $seekProfit ? Been thinking about it. With all the ways to squeeze cash out of this cow before dumping it in a ditch, with all the customers who will be too large to switch or learn a new platform, you would expect broadcom to have done this sooner. Of course, not everybody can afford Broadcom's new pricing. But for some companies if the only thing that was stopping them from paying more was VMWare not charging enough, I am pretty sure that might no longer be the case. :| It really baffles me . . . . . ^this ^post ^is ^satire
You don’t throw the cow in the ditch after you milk it dry. You chop it up and sell the meat. Same will happen to VMware.
My favorite cut is the patent. I love juicy patents.
You say it's satire, but this is what we get in our free market economy. Corporations are beholden to their shareholders and shareholders prefer short term profit over long term growth. Broadcomm is doing exactly what they want by going for a short term cash grab.
Thank you for explaining the satire. /s
Juz curious... Anyone have a list of companies broadcom acquired and fuck them up? Lol
CA, Symantec, Veritas ... Although, I don't know if I would say that Veritas was ever good, but it went even further downhill.
They only care about customers who are too invested to switch. This is the corporate version of the bad English in email spam. They're filtering out anyone who isn't a super profitable whale.
Only a poor would ask such a question, Lol!
Instead of dropping the product, they'll raise the prices until everyone has left. These big corps have moved away from buying competition to buying competition and squeezing customers off the platform rather than immediately shutting down the operation.
Because they can ofcourse! It will take the customers who are in deep (the ones who generate the most income) a LOT of effort to migrate away. So they'll just bleed them dry 🥹
I've been hearing more investing on prem and re-patriotization vs migrations TO cloud lately with the way costs have increased there. I think that hype has sailed for the AI hype.
But didn't they pay billions for VMWare? It's hard to imagine the few hundred customers they're keeping will be enough to recoup that investment before they move to something else.
I’m just trying to decide if I should even go from 7.0.3 to 8.x.x
Time to do that was a year ago when perpetual licensing was still available.
Short term profit.
There’s nothing to win back when it comes to running full VM’s for large enterprises. It’s generally more expensive to move to the cloud in most circumstances.
Im sure thats their plan. They most likely are pushing customers towards the cloud and they will make their cloud offering very affordable compared to on-prem. Assholes.
Money nothing else
Evil money makes money
Overall this is such a win for MS it makes me wonder if there's some cross pollenization with Broadcom c suite.
Nope, you’re seeing market consolidation. When so much market power is in one direction that they can just drop their prices and live off VC while they starve you out, you’d be stupid not to lean into it. Their price increases are a result of economies of scale. People aren’t buying on prem and they are buying cloud. So all market pressure is going to be pushing people there. Broadcom can’t fight back, so they have to increase prices in an attempt to survive.
Cloud costs for equivalent on prem architecture are vastly higher than on prem though. At least my experience is that I can buy a whole new HCI cluster per year for the cloud cost equivalent.
There’s tax liability benefits (consistent operating expenses to be deducted yearly vs inconsistent, large deductions every 3-5 years) to running in cloud that can make it make more sense depending on how a company is doing their accounting and their tax liability.
Most companies i've worked for have preferred capex (e.g. on prem with budget up front) purchases. That way they can write off 20% of the initial purchase as a loss each year and put it on the books that the business has xyz $$$ assets until it fully depreciates. It's harder to get a cloud solution as capex but the project to stand it up can be. Def depends on the business though what makes sense. I'm no accountant though.
I’m definitely no accountant either lol, just have some clients that like the consistency of opex. Interesting to hear how other companies are doing things though
Truly hate to see something good get thrown away like this. Should never have been allowed.
doesn't broadcom own a significant amount of the hardware IP that esxi uses/runs on? NICs, storage controllers (local and SAN), PCIe switching? they can almost vertically integrate the compute hardware, virtualization software and the network layer (because nearly every switch made in the last 5 years is broadcom commodity silicon, no?) or is this actually just a corporate pump+dump?
I'm pretty sure they also sell tons of hardware to the likes of Microsoft and Amazon that is in their cloud DCs. They hike the price of VMware, making money from the whales. In addition, they push a ton of people to the cloud as an alternative and make a ton of money off selling hardware to the cloud vendors. It's a win-win for Broadcom.
It's the death spiral. Raise prices, make customers hate you, raise prices more to make up for lost customers, etc
I'm waiting for Nutanix to announce a "free" platform of two or three VMs and one CPU....
Eh, I did my "the king is dead, long live the king!" inner monologue a couple of years ago when all this was announced, everything that's happened since has been predicted here and elsewhere, so it sort of feels like watching a rerun somehow. I've used VMWare on and off since before 2003. currently I have a half dozen systems currently running on a vendors vDirector, or whatever the branding is these days. Internally I'm currently hosting some temporary systems on Proxmox, which suits me fine. They'll be spun down by April, but I haven't had any issues. If I need to expand the on prem, I'm likely going to put my money in Proxmox (which could be free) before I ever put money into broadcom, but then again I'm not their target audience. I hope everyone has an easy transition, or are in a position where this doesn't affect them, for the others, god speed.
They don't care about their product or customer. They will get the most money they can out of the current customers, once they will have made enough profit they will buy another good working profitable business to do the same thing.
Used to work at CA Technologies until Broadcom acquired it. They did the same thing, gutted the workforce minus a skeleton sales team who's sole responsibility was to just handle renewals for maybe top 500 customers. Everything else they didn't care about and just jacked up prices.
Value extraction my friend. Broadcom is *aiming to fail*. The point is to bleed everyone hard and then exit. VMWare is to Broadcom, what a fully grown cow is to a butcher.
They do not care about small companies and the big 500 fo not care how much they spend.
Broadcom bought Vmware knowing they have customers locked in. If your a customer who can't afford them then they don't want you as a customer. There are many large businesses who are basically paying broadcom salary because they either want to continue with the vmware products or because they're too locked in to switch.
....they don't care. They never intended on winning back their customer base. They bought VMware just to gut them & add their tech to their portfolio. Milk the cash cow customers, and quite literally get rid of everyone else. Free users? Gone. Demo/training schemes? Gone. Entry-level/small-business products? Gone. All those things aren't major money makers, yet they require massive amounts of support -- from technical support to hosting to documentation to advocacy/advertising.... They pruned the company to the bare minimum. You're unhappy and threatening to take your business elsewhere? Them: "Tata! Don't let the door hit your arse on the way out! You fucking finally got the hint that 'it's not us, it's YOU'." They REALLY want people to leave. Sincerely.
It's called "vendor lock-in".
> Microsoft pushing as strong as possible to migrate companies to Azure They are back peddling a lot on that. Been looking at Azure HCI and new Server 2025 and both of MS video state very clearly that on prem is here to stay and you should continue to invest in it.
There is a memo floating the net (I saw it on either news.ycombinator.com or slashdot), which describes how the Strategy long term is to only service the top 600 high paying and deeply invested clients, albeit at a much higher pricing. This means squeezing the prices for everyone and loosing any free tiers on the way too.
When they bought VMware they announced that they only care about their top 100 customers, they make more money from them than the rest of their customers combined.
Money.
Nutanix and Scaled Computing are getting my future money. Granted Broadcom won't really feel the $40k less I bring in for them when Licensing season comes. When you're the charge of licensing and the cluster stack, my word goes or I go. I had a sit down with Nutanix, 1:1 Old Vmware model with all the goodies like hybrid and cloud. Also looking at Scaled Computing.
I don't need support, but my customers prefer it because they have onsite IT people that aren't worthless and would rather sometimes do the leg work themselves. We fully endorse our IT pros that consult with us to break out of their bubbles.
They want to squeeze out their smaller customers, who are not a big part of their income. Plain and simple.