CloudBolt Report: 99% of VMware Users ‘Concerned’ About Broadcom’s Actions

Nearly all (99%) of the people responding to Wakefield’s inquiry said they are concerned about the way Broadcom is handling VMware.

Of that majority, a little more than three-quarters (76%) noted that they are “extremely” or “very” concerned, Wakefield found.

However, as CloudBolt and Wakefield noted in the report, “widespread apprehension” does not mean organizations are abandoning their VMware environments en masse.

In fact, most probably can't, at least not without a mapped-out strategy over some years. They’re hemmed in not only by contractual obligations but also by (often) decades-long reliance on VMware technologies. Despite the crush of vendors moving in earlier this year to “rescue” VMware channel partners and their customers, migrating away from VMware remains a tall order and not one easily fulfilled.

Being the industry disruptor can be a good thing. In this case, according to survey respondents, not so much.

Nearly all (95%) directors polled by Wakefield said Broadcom’s VMware purchase has disrupted their IT strategies. Almost half (46%) said the deal is “extremely” or “very” disruptive.

Those views come as little surprise, especially when considering that Broadcom took over the best accounts, now bundles software in mandated ways, removed perpetual licensing and increased prices. 

Organizations planning a partial or total shift away from VMware can expect “severe” short-term disruption, Wakefield analysts said. 

Every single respondent told CloudBolt via Wakefield that they expect Broadcom to hike VMware prices. Following on that point, nearly three-quarters (73%) predict that Broadcom will raise prices by more than 100%, a threshold Wakefield dubbed as “steep.”

Those findings corroborate “numerous anecdotal reports,” CloudBolt and Wakefield said. Indeed, they also align with what Channel Futures has reported and heard. Many VMware channel partners have been working since before the Broadcom deal closed to prepare their clients for this eventuality. Either it’s time to move to a different cloud environment or brace for higher payments.

Wakefield found that 69% of the companies it surveyed will see their VMware contracts expire within the next 12 months.

This could prove a make-it-or-break-it opportunity for Broadcom — if it’s genuinely keen to grow VMware rather than manage it like a private equity portfolio company and take it down to bare-bones operations.

Considering all the changes Broadcom has imposed onto VMware, Wakefield found that respondents are weighing their options.

So far, only 5% have actually decided how they will progress in response to the VMware acquisition, the study found. Meantime, another 59% will decide within six months, or by about the end of this year, while 87% will decide within the coming year. 

The timeline varies because organizations “must contend with navigating these choices amid a still evolving and uncertain landscape,” Wakefield analysts wrote.

All in all, it looks as though most respondents are eyeing a mix of VMware and other solutions for their cloud environments.

To be sure, VMware technologies have their place and, given contracts, skills and infrastructure in place, many organizations hesitate to take a rip-and-replace approach. As such, here’s what Wakefield found survey respondents are considering:

As for the top drivers spurring these considerations among respondents? Wakefield uncovered the following motivators:

“Broadcom’s established playbook from past acquisitions has VMware customers justifiably worried about a wide range of factors that could negatively impact the relationship,” CloudBolt and Wakefield noted in their report. “However, many also recognize that the current disruption marks the beginning of a prolonged period of uncertainty and change if they choose to remain with Broadcom.”

VMware (and other) channel partners may want to absorb all of that information and proceed accordingly.

As for which VMware solutions organizations might be scrutinizing for replacement in the post-acquisition era? 

The answer, per Wakefield’s findings, is all of them.

Even so, vSphere and vRealize topped respondents’ lists. After that, the rest, including NSX, Tanzu, Horizon and others, all received more than 30% likeliness to abandon, Wakefield said.

“The fact that all major VMware offerings are under consideration for replacement underscores the extensiveness of the potential upheaval; it is increasingly all or nothing,” CloudBolt and Wakefield wrote in their report.

As for which VMware solutions organizations might be scrutinizing for replacement in the post-acquisition era? 

The answer, per Wakefield’s findings, is all of them.

Even so, vSphere and vRealize topped respondents’ lists. After that, the rest, including NSX, Tanzu, Horizon and others, all received more than 30% likeliness to abandon, Wakefield said.

“The fact that all major VMware offerings are under consideration for replacement underscores the extensiveness of the potential upheaval; it is increasingly all or nothing,” CloudBolt and Wakefield wrote in their report.