VMware Users Expect Broadcom to Raise Prices More, Eyeing Options

Nearly 100% of VMware users already use or will switch to hypervisor alternatives as they anticipate Broadcom to raise the brand’s prices even more over the coming year and beyond.

That’s according to the latest vendor-commissioned report, “Insights and Strategies on VMware: Navigating the Evolving Hypervisor Market,” around the fallout from the year-old, $61 billion acquisition of VMware. 

Per Rimini Street, a third-party software support provider for Oracle, SAP and VMware, 98% of the 111 VMware users responding to its survey say they will migrate to alternatives. 

Much of their rationale ties to Broadcom’s policies around perpetual licensing. Almost 80% (79%) told Rimini Street their current perpetual arrangements met their business needs. Nearly all − 99% − of VMware users in the report said they would keep their perpetual licenses running if they could find support (which, again, Rimini Street provides). 

“Giving up control over perpetual licenses due to forced vendor subscription models is like turning in keys to your paid-off home to rent the same house from a landlord,” Rodney Kenyon, group vice president of Rimini Custom, a division of Rimini Street.

Ramini Street's Rodney Kenyon

Recall that, just days after closing the VMware deal, Broadcom trimmed and repackaged the VMware portfolio. It further instituted the move to subscription licensing, widely viewed as more lucrative than perpetual contracts; while that model has grown common in the software sector, many VMware users have reported soaring expenses ever since. Some even say their VMware costs have risen by 1,000% or more.

Related:The Broadcom VMware Acquisition: A Complete Timeline

But, despite desire to get help operating their perpetual-license environments, VMware users say they’re under budget constraints. As such, many are considering doing the support work themselves. That approach comes with its own risks around technical expertise and time-to-resolution, as the report notes.

Meanwhile, 71% of respondents said changes in the hypervisor market overall make them want to keep those perpetual licenses for as long as possible so there’s time to explore VMware options. Cloud-native solutions remain the top choice for those VMware users, especially as AI hits its stride.

VMware Users List Top Hypervisor Alternatives

In terms of which alternatives VMware users say they’re considering, the list features most of the usual suspects. Most respondents − 69% − are eyeing Microsoft Hyper V, while 51% see Oracle VirtualBox as a replacement. Another 45% point to Red Hat Virtualization. The numbers drop from there. A little more than one-quarter (26%) of VMware users told Rimini Street they’re weighing Citrix Hypervisor. From there, it’s Nutanix at 19%; the hyperscalers at 13%; KVM and Proxmox at 11% and 10%, respectively; and finally, “other,” at 1%.

Related:VMware Cloud Marketing Head: Broadcom Changes Mean Business ‘Will Only Get Better’

Rimini Street conducted its survey in the third quarter; the report doesn't indicate that it carried out its interviews or calculations through an independent research firm. 

Ever since Broadcom wrapped the VMware purchase, changed the product lines and pricing terms, and disrupted channel partner programs, rival vendors have leaped into action. They’ve launched incentives for both VMware users and partners, created all-new programs focused on VMware migrations and generally ramped up their marketing, releasing self-funded reports such as the latest example from Rimini Street.

Those efforts come as VMware by Broadcom faces legal challenges from some VMware users − most notably, AT&T − and as Broadcom has done an about-face on its decision to take the top 2,000 strategic accounts away from partners. In recent weeks, the company whittled that figure down to 500, in addition to reinstating back-end rebates and making several other, more channel-friendly moves that could appease some disgruntled VMware partners.