1 in 5 VMware customers plan to jump off its stack next year
Forrester predicts exodus from Virtzilla following Broadcom takeover
Updated Forrester reckons that up to 20 percent of VMware enterprise customers plan to escape its extensive virtualization stack in the coming year.
In its predictions for 2024, the global IT market researcher said the impending $61 billion acquisition of VMware by telecoms giant Broadcom has "cast a shadow on an already beleaguered VMware customer base."
Broadcom has promised that the mega merger will "close soon" in a new dawn for VMware, but in its infrastructure forecasts for next year, Forrester said it might be the end of the line for many customers.
"Many are exhausted by significant price hikes, degrading support, and mandatory subscription to software bundles in which some modules such as NSX and Aria Suite/vRealize Suite end up as shelfware," a blog by principal analysts Michele Pelino and Naveen Chhabra said.
As Reg readers may remember, VMware pushed through a double-digit price increase on its core perpetual licensing and support last year, effective from August 2022. This included a 10 percent hike on vSphere, vCloud, vSAN, NSX, vRNI, and VCF.
Customers are worried about further upward movement in prices after Broadcom completes its buy of VMware, with the closure of the deal currently delayed by China's market regulators, who are still inspecting the proposed $61 billion purchase.
Despite the signs of economic turbulence next year, Forrester said companies would turn to technology to differentiate themselves from the competition.
The analyst house believes that many of VMware's enterprise clients are exploring alternatives to its virtualization, cloud management, end user computing, and hyperconverged infrastructure products despite the company's dominance in these technologies. In 2024, Forrester predicts that 20 percent will begin their escape.
- As uncertainty swirls, VMware closes its home for experimental software
- Fears China could trash Broadcom's VMware nuptials as revenge for sanctions
- VMware staff reportedly told job cuts may start before Broadcom acquisition
- Here's how VMware hopes to spend $1B Broadcom R&D budget boost
Meanwhile, the virtualization giant has been striving to broaden its appeal. Earlier this week, it announced plans to develop a foothold in the data services market. Last year it launched VMware Data Services Manager to which it has just added Google's AlloyDB, the PostgreSQL compatible front end to the Chocolate Factory's RDBMS.
Among Forrester's other predictions, Lee Sustar, principal analyst, said that demand for AI-related workloads would drive at least ten major accounts to "redirect significant spend to OCI, bringing over at least $100 million in annual cloud spend each."
It might be good news for Oracle's Cloud Infrastructure biz, but it is a drop in the ocean. Worldwide end user spending on public cloud services is forecast to grow to around $597.3 billion in 2023, according to Gartner.
Forrester also predicted cloud hyperscalers will announce 30 new regions in anticipation of sovereignty concerns. "By the end of 2024, public cloud vendors will have announced and/or launched at least two geographically separated regions in every significant market to stay ahead of sovereignty requirements, climate change challenges, and risks connected to geopolitical tensions," Sustar said. ®
Updated to add on November 9:
A VMware spokesperson has been in touch to respond: "We continue to see our multi-cloud strategy resonate strongly with our customers who remain committed to our technology portfolio.
"In the case of these Forrester Predictions, we have an open enquiry to discuss the validity of the commentary offered in the blog."