VMware's breadth and depth impresses, but is it still a safe bet?

At the recent VMware Explore conference in Barcelona, there was an elephant in the hall: Broadcom. VMware execs spoke about the $61bn acquisition positively, confidently even. It would be business as usual, yet with extra financial backing, seemed to be the main theme.

So what could all this mean for VMware users, and for IT execs and professionals at large?

It’s true that, if all goes as planned and VMware becomes Broadcom’s new software division, there are significant opportunities. Sure, they have to sort out the overlaps between Symantec, Carbon Black and VMware’s other security software, but overall it enlarges VMware’s endpoint capabilities.

More important will be the mainframe modernisation/integration and DevOps expertise from the former CA group. This could prove very useful to VMware in two key areas: reaching the platform and developer teams that are increasingly important in the modern cloud-native software world, and adding vital weight and nuance to VMware’s own mainframe modernisation story – there’s a strong sense that VMware has in the past only wanted to kick mainframes out, instead of welcoming and building on them.

Follow the money…

Some scepticism remained, however. Broadcom is spending a lot on this acquisition and will want to get a return on its money. Given that there’s already anecdotal reports of former CA customers seeing significant price hikes from Broadcom, it was no surprise to hear some VMware users expressing the fear that price rises might be inevitable.

Rolled into this is VMware’s focus on growing the subscription and SaaS parts of its business. Our research with CIOs has consistently shown two things in this area: a preference for choice and flexibility in their purchasing options, and significant frustration with pricing models that appear only to benefit the vendor and not the customer. If VMware can confidently and persuasively explain the move from perpetual licensing to subscriptions, then fine. If not, then it risks losing trust.

Leverage a comprehensive ecosystem – but keep one eye on the door

Back to my original question, then: what could or should this all mean to VMware users and the industry at large? For VMware’s rivals, there is clearly an opportunity to feed – or at least, build on – that fear and uncertainty. And users do need to be aware of the risks of lock-in. Have you got an alternative strategy in case of unacceptable cost increases, for example? Bearing in mind, of course, that one CIO’s “Unacceptable” is another’s “It’s still cheaper than reskilling!”

That said, one of the most striking take-aways for me from VMware Explore 2022 was that the company’s infrastructure offering appears rather broader and more comprehensive than when I last saw it in the round, at VMworld in 2019. The Tanzu story, in particular, is both more convincing and much better articulated now, as are the network security and “cloud smart” strategies.

Does all that make Broadcom CEO Hock Tan more believable when he says he wants to get value from the VMware deal not by raising prices, but “by offering more and better products so customers are using more of our entire portfolio of technology products, rather than just one or two“? Well, yes – although $61bn is a lot to make up from upselling…

Still, it does mean that getting deeper into the VMware ecosystem will make perfect sense for many organisations, especially for those with deep investments in vSphere training and experience. It will make it harder to plan to avoid or escape lock-in, of course, but in these days of containers, serverless and microservices, it should never be impossible. Good luck!

Bryan Betts

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Bryan Betts is sadly no longing with us. He worked as an analyst at Freeform Dynamics between July 2016 and February 2024, when he tragically passed away following an unexpected illness. We are proud to continue to host Bryan’s work as a tribute to his great contribution to the IT industry.