VMware by Broadcom:
Should You Stay or Should You Go?

A CTO’s Advice for Navigating the
New Licensing Models

_Author

Ryan Szporer

_Contributor

Juan Orlandini

VMware by Broadcom: Should You Stay or Should You Go?

Any change — especially a significant one in IT — is hard to navigate.

Exhibit A: Broadcom’s acquisition of VMware in late 2023. At $69 billion, it’s the largest technology acquisition to date. VMware by Broadcom significantly changed the way it bundles, sells, and supports their products, and more changes (read: enhancements) are likely on the way.

More than six months later, customers are still determining how to pivot strategically. The changes to VMware’s bundling impact customers’ foundational data center services — and most notably, their budgets.

We won’t waste time trying to persuade you to move away from VMware or not. That’s a highly individualized decision based on your own unique environment. What we will do is lay out the brass tacks of the changes and share our professional — and technical — insights about the short- and long-term impacts.

Let’s start with our top three pieces of advice to help you navigate the changes.

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Simplification of VMware’s offerings began in December 2023. Now, a clearer picture of the new VMware has emerged, especially following the VMware Explore conference this summer. We have a better understanding of how the acquisition impacts an organization’s technology strategy. However, the situation remains fluid. Several changes were announced in August 2024 at the VMware Explore conference. Some notable updates include:

A clear migration to offering internal IT systems as true private cloud (as Cloud Native Computing Foundation (CNCF) defines it)
Creating a sophisticated set of services to build private AI capabilities
The maturation of the containerized services and platform engineering tooling built on top of that

“The strategy from VMware is evident: bundle lots of capability into their licensing model,” says Juan Orlandini, chief technology officer, Insight North America. “The clear intent of that bundling is to bring you closer to the vision of a software-defined data center as envisioned by Broadcom. The more of that vision that you consume and leverage, the more value you will extract out of the bundled offerings. Leverage enough of that and your investment in the Broadcom technologies will make more sense. If you choose not to leverage enough of the portfolio, but end up paying for it anyway, well that’s simply not going to add up.”

Broadcom has already introduced operational efficiencies to reinforce VMware as a strategic solution provider. In the first 60 days, Broadcom moved from a perpetual to subscription model, which VMware had been planning for two years. Intended benefits to customers include predictable payments and better foresight to help them further innovate.

Another important change is that support is now included in the new bundled pricing.

Approach big virtualization changes carefully and strategically.

Knee-jerk reactions to the new bundles sent many IT decision-makers looking for a way off VMware. While hypervisor/non-hypervisor VMware alternatives exist, according to Orlandini it’s not as simple as switching providers on the fly.

“There is not a one-for-one replacement for VMware technology,” he says. “A wholesale lift of a data center and moving it to anything else is not an easy proposition.”

Migrating from VMware to an alternate technology or location — like cloud — is possible. But it’s not something that should be done lightly or with little planning. Doing such a migration will affect just about everything in your environment: management tooling, monitoring, any scripting and automation, security tools/systems/controls, infrastructure, and more.

And don’t forget, this will also require significant re-education of your staff, which is probably the long pole in the tent.

When you factor it all up, staying with VMware might prove to be the more cost-effective and valuable option. Again, it’s a case-by-case scenario. But for the sake of weighing all the options, let’s review the positives.

VMware wants to empower customers to roll out private on-premises data centers to support developers (instead of the typical approach, to operate infrastructure). Tanzu, which enables CNCF development and can run traditional virtualized workloads, is one of three key pillars there. The others are application networking/security and software-defined edge, specifically for environments such as factories, remote offices, retail locations, etc. VMware is unifying all three pillars under a single business unit for maximum efficiency in seeing that vision through.

That’s all cause for optimism.

Orlandini cautions that regardless of which path you end up taking — re-platforming to a new hypervisor stack, moving to a cloud provider, or staying with VMware — the decision must make fiscal sense. Your best friend for that is the growing practice of FinOps. Make sure that your FinOps team is mature and able to operate across all of the locations where you will be doing your compute. At the same time, confirm that your technology provider gives your FinOps people all the tools they need to be successful.

Insight is uniquely positioned to help VMware customers.

Multiple VMware partner-of-the-year awards
More than 60 VMware-certified consultants and architects

Considering a switch to another virtualization solutions provider? Insight has deep partnerships with leaders across the IT sector.

Find the right partner to guide you.

Insight is already navigating clients through the change. The goal is to ensure you get the most out of your investments and maintain business continuity across your environments.

We have a large team of licensing experts who are adept at navigating the licensing process. Additionally, we have a skilled technical team well-versed in the intricacies of the portfolio, including hypervisor technologies, networking solutions, security considerations, hybrid models, and competitor landscapes.

Our team ensures that you have a comprehensive understanding of your options, avoiding hasty decisions that could potentially worsen your position. With extensive industry knowledge and close collaborations, we leverage our technical expertise to support your decision-making process effectively.

How will you take the next step?

Start with an evaluation of current consumption, deployment, and usage needs and concerns. Examine your investments in technology, people, and processes. Continue with strategizing, building, and deploying solutions for transformational business outcomes, beyond a specific VMware situation.

All options are on the table. Approach this sanely and measure three times, cut once.

Juan Orlandini, CTO, Insight North America

Next steps include exploring answers to burning questions, which loom large for each organization affected by the acquisition. To assess your organization, start by asking some basic questions:

Which VMware tools do you use?

Which VMware offering makes the most sense?

What does the licensing model change for you?

VMware accounted for 40% of market share for HCI systems in 2022 — more than the next four vendors combined.

Orlandini’s biggest advice is to be “methodical and approach this with calm rationality.”

And through a methodical approach, he’s already seen clients uncover some compelling details about their IT environment.

“During one client conversation, they had a moment of realization,” Orlandini explains. “They discovered they were running a whopping 6,000 applications and started questioning the necessity of each one. Some were receiving minimal traffic, like front-end websites with just one hit per week.”

The discovery made them rethink the technical debt associated with maintaining all their apps. They are now streamlining operations and improving efficiencies. While this process can be challenging, it’s a necessary step driven by a clear need for change, not just a nice-to-have initiative.

Indeed, sometimes your best first move is to take a step back.

“So, let’s talk about what VMware is doing and innovating and bringing to the table and see if you can take advantage of it. If you can, your value proposition is going to change,” he says. “That’s the conversation.”

The task at hand is to optimize the required solution for your specific needs. The acquisition can help improve your environment, whether with VMware or to accommodate an alternative.

“Perhaps in the past, you didn’t choose to leverage all [VMware] capabilities because it didn’t make sense for you back then. Losing the core capabilities, because you don’t want to use some of the other stuff, might actually hurt you more than buying the incremental capabilities that VMware brings to the table — leveraging those for the value that they bring and keeping what you found valuable in the original place,” says Orlandini. “All options are on the table. Approach this sanely and measure three times, cut once.”

Companies are currently taking advantage of VMware strategy sessions from Insight to address their specific burning questions, potential solutions, and best practices. From there, after they’ve made the right decision regarding their virtualization needs, they can take the next steps in their overall digital transformation.

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