back to article The self-created risk in Broadcom's big VMware kiss-off

It looked like the most cynical corporate move of the last couple of years, at least in IT. A year and a half after it was announced, so it has proved to be. Broadcom's $61 billion buyout of VMware was expected to follow a familiar formula – price hikes, product abandonment, complete ecosystem devastation – and the creation of …

  1. StimpyKat

    My organisation is looking to move

    I have absolutely no say in this, but the relevant teams are in the process of finding a suitable alternative. We're an Enterprise, but just feel that the software is now poor value for money.

  2. BinkyTheMagicPaperclip Silver badge

    Emulation of hardware? Not any more

    This is possibly nitpicking, but it's important in some cases : 'Virtualization's entire purpose is to vanish entirely by precisely mimicking hardware' was never true and increasingly is only a vague relation to the truth, but it doesn't matter much any more.

    The early virtualisation products were 'good enough' emulations of hardware that if you squinted a bit looked like it probably was a real PC, but even then there were gaps - OpenBSD failed on one virtualisation product because it used a particular unemulated network card feature no other OS did.

    Qemu (which is both an emulator by itself and also used by some hypervisors to create a device tree) has a few separate PC types : Q35, 440FX, and ISA. These are all old, from 2010, 1996, and potentially 1981 respectively. There are some very unusual PCs out there, particularly in the industrial PC arena, but seeing a 2023 CPU hanging off a 1996 host chipset is more than a little odd.

    it doesn't matter, however. Emulation and virtualisation by being a close hardware representation is also wasteful, and as virtualisation popularity grew the operating system vendors started modifying their operating systems to specifically support virtualisation. Today there are both optimisations when operating systems realise they are running inside a VM, and virtual hardware drivers that bear a passing resemblance to real hardware but have efficiency and convenience far over precisely emulating the real item.

    It's a mature market [1] so whilst migrating VMs can to some extent be a hassle, the architecture is generally understood, and there are tools to assist the process. Broadcom may have some ability to lock in VMWare customers due to their management tools, but also face the danger with all system migrations that an audit naturally tends to occur at the same time not infrequently reducing the amount of required licences and leading to re-evaluation of the solution.

    [1] There are established vendors such as VMWare, Xen, Microsoft, and cloud providers. Most other operating systems also feature hypervisors with varying degrees of functionality and operating system support - a serial console, network adapter, and storage are all that's required to get some useful work started. Then there are emulators such as Qemu that are sometimes hardware assisted, that run almost everywhere, and moving into specific domain support such as DOSBox 'looks like DOS enough to run games, but not much else' and DOSBox-X 'accurate enough it should run DOS/Win9x business apps'.

    I don't see guaranteed PCI passthrough support without a hardware compatibility list working any time soon though. Too many dependencies, hardware bugs, and configuration issues.

  3. Doctor Syntax Silver badge

    There's another long term problem for term If they may think they're losing the small fry they don't care about but among those are the not-yet big fish who they'd want eventually. Of course if you think in quarterly figures that's not an issue but that in itself should be enough to ensure their competitors outgrow them.

    I wonder how many of those who saw it coming were already making their plans or actually migrated well before the announcement.

    1. Anonymous Coward
      Anonymous Coward

      Only small fry could move in time. We have 150000 cores to pay for and still don't have the costs, discounts and how all features are billed. 1 month before the new licensing starts.

    2. BinkyTheMagicPaperclip Silver badge

      We did, although it was more for platform consolidation and ongoing costs than VMWare's behaviour as far as I'm aware. For historic reasons we had a large VMWare on-prem system that was costing us a lot of money. Requests to migrate started early 2023 if not before, and were repeatedly followed up throughout the year.

      I completed the migration in my area prior to the end of the year. Some of the VMs were old and in need of a little spring cleaning that it was easier to re-provision, copy data and setup, rather than upgrade and live migrate.

      We are largely a Windows shop. There's also a lot of legacy but that's being effectively migrated. As such it makes sense to go to Hyper-V, and from an end VM user point of view rather than VM management there's no discernible difference between VMWare and Hyper V VMs. If anything it's better now.

  4. Kurgan

    I was lucky

    I have been lucky. Working in a very small business environment I have used Vmware once, and after that only Proxmox (KVM). Since I'm a Linux expert, it has been quite an obvious choice. Now I have at least one less problem than a lot of other sysadmins: no Vmware to migrate away from.

    Still I don't expect that a lot of people will migrate away from Vmware and to open source solutions: I think that while most will remain with Vmware, the ones that will migrate will choose Hyper-V.

    1. thondwe

      Re: I was lucky

      We were lucky too - already on Subs model and renewal was cheaper - go figure! Still looking at options though as underlying tin is on it's last legs!

    2. Anonymous Coward
      Anonymous Coward

      Re: I was lucky

      Not everyone wants to use open source so Microsoft and Nutanix will surely pick up customers. Some of those difficult to migrate legacy workloads will probably also be modernized and moved to AWS as well now that the cost/benefit equation has been completely upended. A world where Proxmox is the de facto hypervisor stack of choice for small outfits and new admins playing around at home doesn't seem completely unreasonable. Broadcom killing ESXi all but guarantees the VMWare talent pipeline is done for. In 5-10 years hiring VMWare admins will be like finding someone to run your mainframe today. That's a lot of risk even if VMWare is ideal for your needs.

      1. Charlie Clark Silver badge

        Re: I was lucky

        Open source has long since ceased to be a problem for businesses if they can get: support contracts, trained users and management software.

  5. Rgen

    We have already working on a plan to move away.

  6. A Non e-mouse Silver badge

    The core problem isn't virtualisation (as you mention, that's a solved problem.) The real problem is management.

    Having a management system that can managed 10s/100s of physical hosts and 1000s of VMs. That's why people paid the VM tax as their management tools were good.

    1. J. Cook Silver badge

      If I could upvote you twice, I'd do it in a heartbeat.

      We are not what you'd consider a large shop- 25 hosts, and ~400 VMs. I have zero problems with migrating over to ProxMox (Cisco's appliances apparently support being run on it), but setting up the clustering, high availability, and load leveling is the real spice that makes life easier for us.

      In order to set up a hyper-V based cluster? lots and lots and lots of licenses, which means an equally sized railcar of money, and a radically different approach on how things work on it.

      1. Michael Duke

        If you are already a 400VM Windows shop less licensing than you might think.

        If they are all Linux VM's then yes.

  7. Kevin

    Business writers, please stop comparing market value to GDP

    Please stop.

    1. Anonymous Coward
      Anonymous Coward

      Re: Business writers, please stop comparing market value to GDP

      That's the stupidest argument I've heard in quite some time. Or are you insinuating that we should be dividing GDP by 365.24 before making the comparisons?

      1. yetanotheraoc Silver badge

        Re: Business writers, please stop comparing market value to GDP

        I'm another person who considered complaining about the specious market cap to GDP comparison, so I want to hear _why_ you think the argument was stupid. I don't agree with every point made in the linked article, but the overall conclusion seems reasonable: Comparing unlike things is the opposite of educational. And no, dividing by 365.24 is just muddying the waters. What is market cap per calendar day supposed to represent? In raw numbers Broadcom's yearly gross income is about 1/16 of its market cap (quick yahoo finance search). Yearly gross income also might not be the correct thing to compare to GDP, but it's getting warmer.

      2. Kevin

        Re: Business writers, please stop comparing market value to GDP

        Divide by 365?? Tell me you don't understand the difference between a company's revenue and value without telling me... In all seriousness, a country's GDP is like a company's revenue, NOT a company's value. Comparing the two makes no sense.

  8. JohnSheeran

    It's not really a single thing that Broadcom has planned/is doing that's the problem. It's the laundry list of bad things they are doing/planning that is pissing off corporate customers. That coupled with the fact that these same corporate customers have already been through a similar problem with Broadcom on the mainframe side is what will really be their demise. I work at a Fortune 100 company and we're in the process of moving to something else. It's not a question of "if", it's a question of "when".

    1. JohnSheeran

      What's the thumbs down for this? If you're going to give it, at least defend it.

  9. NickHolland

    Product replacement must be part of any product selection process

    People don't like to hear this, but critical to any product selection process has to be a "What do we do *when* this product becomes no longer viable to us for any reasons?" -- and that has to be BEFORE the purchase or commitment is made.

    How do you get your documents out of an old document imaging system? How do you get your data out of an old backup system? How do you migrate your e-mail out of the new e-mail server you are looking at to some future product? When OS whatever becomes undesirable, how to you migrate to another OS? Open Source HELPS, but only to a degree, as RedHat has shown. This is really getting more critical with the "software as a service" and cloud service providers, where you may not even have physical access to your data -- what do you do if the service provider suddenly closes their doors? The vendor will always say, "We won't do that" -- but that's the same thing every company that has closed up suddenly has said at one point.

    A lot of VMware's customers have been around a lot longer than VMware has been. Nothing lasts forever, few things in IT last, period.

    Also...a product replacement plan just helps with OS upgrades, too. If you can deal with swapping out product X for product Y, you can deal with upgrading the OS to the next version.

    1. Rich 2 Silver badge

      Re: Product replacement must be part of any product selection process

      Where I work, we have recently moved over to using Bitbucket. I asked what the plan was if/when it all goes pear-shaped. One person on the Teams call laughed and said “well that will never happen”

      Yea. Right

      …and no - I’m still not at all confident that there is any real plan in place. But that’s not my problem :-)

    2. Anonymous Coward
      Anonymous Coward

      Re: Product replacement must be part of any product selection process

      This is why I have my NAS backing up everything from my Google account. Assuming everything around today will be around forever is foolish. The only thing I can control is my local data.

  10. TaabuTheCat

    Brilliant strategy?

    Don't confuse caring about the life of a product - even a good one - with making money. I don't think Broadcom gives a shit about VMware. I think they were just quicker than other PE sharks to realize they could extract ransom-sized renewals long enough to make lots of money and then dispose of the corpse once it's bled dry. Welcome to end-stage capitalism, captured regulators and companies that actively do everything possible - legal and illegal - to stymie competition. Enshitification? You bet.

    1. Richard 12 Silver badge

      Re: Brilliant strategy?

      Except they have basically no chance of actually getting that money.

      When you increase prices that much, everyone leaves as fast as possible. Broadcom appears to be betting that it will take long enough for them to recover the acquisition costs.

      It won't, because they've raised the price too far. Everyone knows you boil the frog slowly!

      If you increase my costs by $200,000pa, then it is cheaper for me to hire someone permanently to deal with any limitations of an alternative than to pay the license fee. I'll save in the first quarter.

      If you increase my costs by $50,000pa, then it is probably cheaper for me to pay a consultant to transition, as I'll be saving in a couple of years.

      Of course, the execs who authorised all this will have already banked their bonuses and left. It does appear that the larger the corporation the shorter term its behaviour.

    2. Fred Daggy Silver badge

      Re: Brilliant strategy?

      End stage capitalism? Watch "Wall Street" again.

      This is mid-late 80s asset stripping all over again.

  11. Anonymous Coward
    Anonymous Coward

    Who among the little people knows how to operate in our multibillion-dollar paradise?

    That would be all the Home Labs setup by IT professionals to test, evaluate and learn.

    Won't catch me doing that with VMware again.

  12. Enormous Crowe Turd

    Damn, I liked vmWare - shame it's as good as dead now - 3 years, maybe 5?

    1. Michael Duke

      I am not sure it is going to take that long.

      VMWare under Broadcom is going to slip from ~80% market share to low 30's IMHO. Broadcom will not tolerate that level of revenue drop and will slash heads ASAP.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like