back to article Broadcom to 'focus on rapid transition to subscriptions' for VMware

Broadcom has signaled its $61 billion acquisition of VMware will involve a “rapid transition from perpetual licenses to subscriptions.” That's according to Tom Krause, president of the Broadcom Software Group, on Thursday's Broadcom earnings call. He was asked how the semiconductor giant plans to deliver on its guidance that …

  1. Anonymous Coward
    Anonymous Coward

    Hock Tan doesn’t really know anything about software

    He’s a financial vampire. But deliberately limiting your number of customers while keeping the products on life support is insane.

    1. tip pc Silver badge

      Re: Hock Tan doesn’t really know anything about software

      Given Broadcom profits continue to rise I don’t see how his strategy is insane.

      I agree it’s not good for the long term

      1. Anonymous Coward
        Anonymous Coward

        Re: Hock Tan doesn’t really know anything about software

        Not good for the short term either. It's already spooked a few and we're already transitioning off VMWare products; and hoping to be gone before the next renewals.

        1. Anonymous Coward
          Anonymous Coward

          Re: Hock Tan doesn’t really know anything about software

          We were thinking of transiting to VMware, but that is obviously totally out of the question now. We're a small lab, our budget doesn't allow us to pay (through the nose) over and over again for the same infrastructure.

          Oh well, it's not like it will hurt them. They will be able to milk those who can't quit to cover all losses, and reduce their support expenses by pruning the smaller, less profitable clients like us.

    2. DougMac

      Re: Hock Tan doesn’t really know anything about software

      Sounds exactly like Oracle.

      Financial vampire, cater to only a handful of the largest whales.

      Not exactly a great business environment around Oracle.

  2. Anonymous Coward
    Anonymous Coward

    How to piss off your customers in one easy lesson

    Rule 1

    Tell your customers that 'we the corporation' are going to gouge more £££/$$$$ etc.

    Rule 2

    See Rule 1

    Don't the schmucks know that business confidence is dropping?

    Trying to get more blood out of a stone is not going to go down well with customers.

    I'll be making this change known to my bosses this morning. They won't be happy as we use VMware a lot in testing. It looks like it is back to Virtualbox even though I suspect that Oracle will see this and do exactly the same...

    1. CrazyOldCatMan Silver badge

      Re: How to piss off your customers in one easy lesson

      It looks like it is back to Virtualbox

      Or you could look at something like Proxmox - cluster-capable linux specialised virtualisation (using QEMU and KVM) distro.

      I've been using it for years.

  3. Anonymous Coward
    Anonymous Coward

    As with Libre Office… you only buy VmWare because you want to. Plenty of alternatives are available….

    1. VoiceOfTruth Silver badge

      While I use LibreOffice personally, its database is very weak. And if you happen to need a desktop database like Access, it is not really an alternative.

      VMWare was concentrating on products which people pay for, LibreOffice was concentrating on telling people about free software.

      1. Doctor Syntax Silver badge

        As regards the LibreOffice database I agree with you.

        However I get the impression that desktop database products as a whole are aimed at those who have finally realised the shortcomings of spreadsheets as databases and contrive to reassure by looking as much like spreadsheets as possible. Kex looks more like Access than does LO Base but from an old Informix hand this is damning with faint praise. In particular I'd prefer the approach of "dump controls for the columns of a single from the table(s) I've selected on a new form, provide a menu control for CRUD*, forward & backward and let me take things from there". And I wish they wouldn't devise their own database engines; just use Sqlite for a strictly one user, local data source or ODBC to link to any well-known engine.

        * Create, Retrieve, Update, Delete.

    2. Anonymous Coward
      Anonymous Coward

      you only buy VmWare because you want to

      You also buy it when you need a relatively easy to install and run bare-metal hypervisor, and can't afford to hire some IT whizz guy who could assemble and maintain a working system out of open source solutions.

      We know open source solutions exist, because we actually use them right now. But when you don't have money for a dedicated IT department, beyond a given level you're forced to try to simplify things by going for commercial solutions: The half a day you wasted browsing through contradicting online forums for a solution is half a day you didn't do the actual work you're paid for. Sad, but that's life.

      1. thondwe

        Don't think you get that far with VMware and no I.T. Wizard (or Hyper-V, etc) - but yes OpenSource needs more effort...

      2. Anonymous Coward
        Anonymous Coward

        If you can’t afford an IT department, then you really don’t want to see VMware’s price list!

        1. fax4voice3

          Too bad if you're not on the internet

          Our product is a turnkey system based around a single decently powered server. What we pay for a perpetual ESXi license on that server is about what an IT guy would bill us in a month. But here's the fun part: Our product goes into secure locations on private, air-gapped networks. We absolutely cannot be put in a position where VMware has to phone home periodically to check if the bill's been paid.

      3. Kurgan

        Try Proxmox VE. Even simpler than vmware for small installations. And free.

  4. b0llchit Silver badge

    Broadcom intends to buy a cow and is already announcing the milking procedure. In such scenario you know that the dairy products will become very expensive and only available for limited time. Time to find another product; this beef is cooked.

  5. Potemkine! Silver badge
  6. tip pc Silver badge

    Market churn

    Thanks VMware for all the virtualisation innovations

    Time for the new innovators to make their mark.

    1. Dimmer Bronze badge

      Re: Market churn

      I remember when they started.

      Hardware failed, new hardware requires new OS that requires new app software that requires new drivers that don’t support anything u have.

      Lots of churn.

      Hardware fails, it is a VM so move to another piece of hardware. Done. No churn.

      That was worth something, but the cat is out of the bag and we have choices.

      The no churn is Bad for the industry. So force it:

      1. Buggy software, churn

      2. Security issues (see #1), churn

      3. “ end of life /support”, churn

      4. And the latest - “supply chain issues” , churn

      1. ecofeco Silver badge

        Re: Market churn

        All of this. Across almost every industry.

        I keep telling people that most markets are artificial and gamed and I keep getting downvoted. No real mystery why, though.

  7. Trigun

    Software as service once again

    "Software as a service" strikes again. We've already moved away from VMware along with many of our customers.

    1. TReko

      Re: Software as service once again

      What are the alternatives?

      - VirtualBox

      - MS Hyper-V

      Neither are as good as VMWare in my opinion.

      1. Anonymous Coward
        Anonymous Coward

        Re: Software as service once again

        What are the alternatives?

        Proxmox ?

        1. Kurgan

          Re: Software as service once again

          i use Proxmox and it's perfectly fine. Not more buggy and quirky than vmware.

          1. CrazyOldCatMan Silver badge

            Re: Software as service once again

            i use Proxmox and it's perfectly fine

            Indeed - likewise. Although my 2nd server in the clusder just failed (RAID array controller has gone doo-lally and can't see the drives any more..) but that's hardly the fault of Proxmox.

      2. Tom Womack

        Re: Software as service once again

        KVM? Xen? AWS is Xen, Azure is HyperV, Google Cloud is KVM ...

      3. thondwe

        Re: Software as service once again

        Careful with "Alternatives" - think scale - we're still running some 700 VMs across two sites with site to site failover - ProxMox is KVM/Containers underneath - it's the management toolset that makes it useful, but to what scale?

        So main players are VMware/Microsoft Hyper-V/SCVVM (ugh) /OpenStack (Complex) I guess - though VMware probably has most clever tricks in the bag. VMware's main competitor now has to be Azure/AWS?

      4. Anonymous Coward
        Anonymous Coward

        Re: Software as service once again

        oVirt. The upstream (opensource) free version of Red Hat Virtualization (RHV). KVM under the hood.

        It mostly follows the VMware vCenter/ESXi model, e.g. oVirt has the Engine (front end for command and control, like vCenter), and Nodes (hypervisor systems, like ESXi).

        Based on Linux, typically CentOS or RHEL, which figures since it's Red Hat-sponsored. Personally I'd prefer Alma or Rocky these days. Or, really, Debian, but if you want that Linux family under the covers your best bet might be Proxmox.

        I played with both oVirt and Proxmox a while ago in the lab, both were decent. Nice enough front-ends with GUI and VM console etc. like you'd expect. Again, KVM doing the hypervisor work.

        For small labs (e.g. 1 hypervisor, maybe a dozen VM's or so) I would probably use Proxmox these days, or stock KVM+qemu+libvirt and stitch together the associated extras I might want.

        For multi-hypervisor server setups I'd check out oVirt. I don't know what Red Hat's RHV $$ version gets you beyond oVirt, presumably paid support; I've never looked into it, merely assumed it's like RHEL from a licensing and support etc. standpoint.

  8. Mike 137 Silver badge

    "Whether it's perpetual or subscription, frankly, it's the same," Tan added.

    Not to the user. Lifetime cost of availability will go though the roof. Plus there's the permanent sword of Damocles in case a subscription renewal fails. I've personally witnessed this with certificates, and Equifax lost the decryption certificate on their IDS for the same reason, leading to one of the largest data breaches on record.

    The bean counters take command yet again. IT is no longer there to support the user - it's there to maintain the vendor's revenue stream. I wonder why the phrase 'protection racket' keeps flashing through my mind.

    1. Anonymous Coward
      Anonymous Coward

      Re: "Whether it's perpetual or subscription, frankly, it's the same," Tan added.

      That would be Vanguard Capital. They are being payied $25m because of the stock they hold in both Broadcom and in VMware.

  9. SirWired 1

    Well, the experience of Symantec hasn't been encouraging

    I've been trying to buy a simple license upgrade for a Symantec security appliance, and not only has Broadcom been mind-blowingly incompetent, they've been *actively hostile* and stubbornly refuse to lift a finger to solve the problem they've created. (Okay, they've lifted the middle finger.) This was also a transition from perpetual to subscription licensing, and it's turned my H/W product into a brick in lieu of a $$$$ payment covering the whole company.

    Brocade has still been okay, but that's an old-line H/W business.

    1. This post has been deleted by its author

  10. Anonymous Coward
    Anonymous Coward

    Amazon/Google/Microsoft/others rub hands

    They must be looking forward to everyone accelerating their cloud migrations.

    Iterestingly I was in a meeting today to talk about investigating Tanzu. I wonder if that will be put on hold.

  11. Anonymous Coward
    Anonymous Coward

    The VMware Tax

    Paying money to VMware is already seen as protection money to maintain the status quo, like the Microsoft tax. Moving to a subscription model makes is more explicit.

  12. G40

    Desktop virtualisation winner

    Has to be VirtualBox no?

  13. Anonymous Coward
    Anonymous Coward

    Admission of strategy error?

    "Krause also repeatedly said Broadcom .... is pleased to be acquiring a sales organization and channel relationships that give it reach Broadcom does not currently enjoy."

    They flushed the sales organization & channel relationships which came along with Symantec. Maybe they are now realizing how important that is to the software business?

  14. Throatwarbler Mangrove Silver badge

    So much fail

    So, let's get this straight: the one major advantage that VMware offered over going to the cloud, perpetual licenses, is going to get pulled away in favor of subscription. Why do I think this will accelerate some large enterprises' move to public cloud?

    1. Anonymous Coward
      Anonymous Coward

      Re: So much fail

      Capex vs opex - companies are often happier with ongoing opex. They are probably paying a yearly support fee anyway, so it's just how the pricing breaks down.

      There are a number of public clouds that depend on VMWare - if the subscription pricing is sensible, this actually encourage using it within a data centre.

      There are already other virtualisation products that have a subscription pricing model - some of them based on Open Source technologies.

  15. rnturn

    Everybody want to be part of the rentier class...

    ...with their hand in your pocket monthly/quarterly/annually with the threat of shutting your business down hanging over your head if you don't like it. Customers have options.

    1. ecofeco Silver badge

      Re: Everybody want to be part of the rentier class...


    2. Doctor Syntax Silver badge

      Re: Everybody want to be part of the rentier class...

      "Customers have options."

      "Not if we have anything to do with ti." - the tech industry.

  16. Anonymous Coward

    Whale thought process

    Cost of annual VMWare sbscription + cost of new platform + cost of moving to new platform = stick with VMWare.

    It's the equation that beancounters and suits like.

    It's also the equation that keeps Oracle in business.

  17. man_iii

    SuSE and others

    Rancher and SuSE are making improvements to KVM and containers has been making strides to convert traditional shop customers and if VMware goes mstax that will drive customers to other pastures!

    1. Anonymous Coward
      Anonymous Coward

      Re: SuSE and others

      Rancher has nothing to do with KVM and SUSE hasn't done a lot for KVM either (you can't even get a supported version of Cockpit for SEL or openSUSE Leap, although for some reason they do one for rolling release openSUSE Tumbleweed).

      RHEL and derivates (Rocky/Alma/Oracle Linux) make a much better virtualization host out of the box than SUSE. So does Ubuntu, actually.

  18. 43300 Silver badge

    "Whether it's perpetual or subscription, frankly, it's the same,"

    Is it indeed? Well if it is then it'll be unlike every other subscription service, which end up costing more than a perpetual license when spread over the lifespan of the equipment it's installed on. Not to mention, of course, the continual stream of new 'features' which we don't want and which sometimes break other things (Microsoft's specialism).

  19. Randall Shimizu

    Big challenges & opporutnities for Broadcom

    There is big challenges & opportunities for Broadcom. VMware is overpriced today and many organizations don't see a good ROI. So Broadcom will have to adjust VMware's pricing model if they hope to gain & retain market share. Now that said I don't think a subscription model is necessarily a bad thing for Vmware. Doing so could potentially callow customers more flexibility to choose the products & features they need. The other challenge is to show companies the value proposition for VMware. The potential is there. But the cost is simply to high for many organizations. Private cloud management is probably the real opportunity for VMware.

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