VMware by Broadcom: Current situation as seen by Michal Hampl

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I wrote about the changes and expectations resulting from Broadcom’s acquisition of VMware a few weeks ago. Today, I am proud to announce that Geetoo Technology officially belongs among the 500 cloud partners worldwide that VMware by Broadcom has recognized as significant, becoming part of its new Broadcom Advantage Partner Program as a VMware Cloud Service Provider.

In the following paragraphs, I would like to show the other side of the coin to the above-mentioned public debates and hopefully calm some cloud service consumers on the VMware platform by demonstrating that the situation is stable and the cloud continues to thrive.

Transition to Subscription Model

The transition to a subscription model should not be shocking. VMware had announced this intention a while back (earliest mentions I found are from 2022). Veeam had switched to subscription licensing years ago. Similarly, Microsoft prefers licenses in the form of a lease in CSP compared to traditional sales. 

Subscriptions are becoming the B2B and B2C standard today. At work, we commonly use the M365 office suite or creative tools from Adobe. Privately, we have subscriptions to Spotify or Netflix, and we do not panic or switch to competitors whenever there are changes in terms, including financial ones, as it’s only a matter of time before competitors adapt to the trend as well. 

Pricing policy

In recent years, there has been a price increase for most products and services. For some providers, this is a quietly accepted rule. If a provider wants to legally obtain a license to operate public cloud services, they must commit to the subscription model and accept the possibility of price increases, regardless of the virtualization platform and software manufacturer.

Yes, there are various special scenarios where a customer, for example, optimized the HW configuration of servers (processors) to save on licensing conditions of other operated products (such as various database servers), and now such optimization will not entirely work in their favor. Certainly, there are smaller cloud service operators who do not use fully equipped servers or run smaller dedicated projects that are not ideally configured for the new licensing model, and the price increase will be more noticeable for them.

However, in most cases, it will be about standard environments that operators build to achieve optimal cloud operating costs (i.e., optimal use of data center space, electricity, network technologies, efficient management, and maintenance). For such server configurations, which we also have at Geetoo, and the average workload, the new licensing model comes out the same or, in some cases, even better than the original one. And if you also use advanced technologies, very useful for operating large clouds (such as VMware Aria monitoring tools) or a broader stack of VMware products, you can save money. 

Looking ahead with confidence

This experience is not unique to us at Geetoo. In recent weeks, we have been in contact with various cloud service providers across Europe, encountering those where the new model led to price increases and those where the new model is similarly or even cheaper. However, these entities do not feel the need to publicly comment on the model change and their experience with it.

This brings me to the last point – Broadcom certainly does not deny any cloud service operator the possibility to continue using VMware software, just changes the way to cover smaller partners from the original model.

As early as January, there were initial information that the new cloud program would continue to include the possibility of white-label collaboration. This option is not widely known but was part of the original cloud program, and Geetoo has utilized it in collaboration and support of other cloud providers in the local market for the last few years. 

Currently, we are in contact with dozens of similar partners mainly from the Central and Eastern European region, negotiating closer terms of this collaboration. In many cases, we are close to signing a contract. We are making maximum efforts to be able to ensure the necessary licenses and service for their cloud services to continue operating without any interruption from April 1st. 

Conclusion

Customers who consume VMware cloud services and find this platform optimal have nothing to fear. Catastrophic scenarios in the public space are only trying to attract attention but have nothing to do with the reality, which we definitely do not perceive negatively.

We welcome customers whose current service provider will be ending with VMware and do not want to go through the rapid learning and tuning of one of the open-source alternatives. Similarly, providers operating VMware cloud services who are unsure of the future steps from April 1st can turn to us. Together we will find a solution.