Broadcom throws VMware customers on perpetual licenses a lifeline

Meanwhile, Gartner predicts massive market share loss and European regulators start asking questions

Broadcom has blinked, and made a couple of changes to support VMware customers who don't want to move to its new software bundle subscriptions.

In a Monday post, Broadcom CEO Hock Tan restated his belief that VMware's portfolio was too complex, and too poorly integrated, for the virtualization giant to represent true competition for hyperscale clouds. Broadcom's injection of R&D cash, he insisted, will see VMware's flagship Cloud Foundation suite evolve to become more powerful and easy to operate.

He also admitted that customers aren't enjoying the ride.

"As we roll out this strategy, we continue to learn from our customers on how best to prepare them for success by ensuring they always have the transition time and support they need," he wrote. "In particular, the subscription pricing model does involve a change in the timing of customers' expenditures and the balance of those expenditures between capital and operating spending."

Customers also told Tan that "fast-moving change may require more time, so we have given support extensions to many customers who came up for renewal while these changes were rolling out."

That's one of the changes – Broadcom has previously not publicly suggested such extensions would be possible.

"We have always been and remain ready to work with our customers on their specific concerns," Tan wrote.

The other change is providing some ongoing security patches for VMware customers who persist with their perpetual licenses instead of shifting to Broadcom's subs.

"We are announcing free access to zero-day security patches for supported versions of vSphere, and we'll add other VMware products over time," Tan wrote, describing the measure as aimed at ensuring that customers "whose maintenance and support contracts have expired and choose to not continue on one of our subscription offerings." The change means such customers "are able to use perpetual licenses in a safe and secure fashion."

The changes were announced on the same day Reuters reported that European antitrust authorities have questioned Broadcom about its licensing changes.

That action was called for by Euro-cloud consortium CISPE in March – a call that was then repeated by four European tech-buyer trade associations in April. It is unclear if the action reported by Reuters was in response to the above lobbying.

Another reason for Broadcom's changes could be analyst firm Gartner predicting that that VMware's share of the hyperconverged infrastructure (HCI) market is set to plunge.

"The 30 percent of the non-VMware full-stack HCI installed base that exists in 2024 will increase to 60 percent by 2029," declared a Gartner "Market Guide for Full-Stack HCI Software" published last week.

The Market Guide doesn't explain why the market will move, other than in the observation that "vendor dynamics result in a third of the private cloud infrastructure looking to revirtualize the incumbent vendors – especially as virtual storage and network increase bundling and costs – and drive potential change to the HCI vendor dynamics."

Interestingly, Gartner's document lists three Chinese HCI providers – ArcherOS Software, Sangfor, and SmartX – as "representative vendors" in the field, a designation that the analyst firm uses to sketch the market rather than to make an exhaustive list of players.

Microsoft, Nutanix, Oxide, and SoftIron also rate a mention. ®

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