back to article Broadcom boss Hock Tan acknowledges 'some unease' among VMware community

Broadcom CEO Hock Tan has rated his enterprise's first hundred days as the owner of VMware "a strong start," but also acknowledged the rapid changes at the virtualization giant have been hard for some to digest. "While much work remains, we've made substantial progress as we build the world's leading infrastructure technology …

  1. An_Old_Dog Silver badge

    "The Industry Standard"

    From TFA: "We've changed how and through whom we will sell our software. And we've completed the software business-model transition that began to accelerate in 2019, from selling perpetual software to subscription licensing only – the industry standard," he added.

    I suspect that far more software is sold via perpetual license (pay once and you're done; you might or might not get some free upgrades) than is sold via subscription, although there's a lot more talk and print (in other words, "hype") about software subscriptions.

    It's a lot easier to find ten people willing to pay you ten dollars for a software package than it is to find one person willing to pay you a hundred dollars for that same software package. But it's a lot easier to achieve customer lock-in with subscriptions. They may start with a reasonable price, or even a loss-leader price, but after the customer has converted to using that, and their data have been moved to "the cloud", the rate-hikes begin.

    Our company had an IBM mainframe, but at some point, our expanding needs and IBM's pricing structure made it cheaper for us to go with Plan B: we got an Amdahl V6 (IBM mainframe work-alike). It was relatively-easy for us to do that, as we had all our data physically on-prem, on our discs, and on our tapes. Had our data been "in the cloud", we would have been boned.

  2. Anonymous Coward
    Anonymous Coward

    Way to go : Tan

    Around here, your changes are dirt. You are going to lose a lot of SME's who trialed new software in a few VM's. My clients loved that low risk approach. Now? The plans are for VirtualBox to replace VMWare in almost all my clients. Your [redacted] way of doing business has pissed off a lot of former customers.

    Subscriptions are a real PITA for my customers. It is far too easy for some beancounter to decide 'we don't need that subscription going out every month' and cancel it. At least with old software it didn't suddenly stop working. For many of my customers, forking out every 1-2 years a small amount for a VMWare license was manageable. Those $10/month, $20/month and more soon mount up if you aren't careful.

    As a former VMWare fan, I hope that your company dies a slow death. Whatever happened to 'The customer is always right?'.

    1. druck Silver badge
      Black Helicopters

      Re: Way to go : Tan

      Remember the extension pack which makes Virtual Box actually useable is chargeable for commercial use, and means paying Oracle and being subjected to their audits.

      1. RAMChYLD

        Re: Way to go : Tan

        Agreed. Look into migrating to KVM or Xen.

      2. Jon 37

        Re: Way to go : Tan

        You might not need it. The extension pack was essential for USB support, but that is built in to more recent versions of VirtualBox.

        1. Aitor 1

          Re: Way to go : Tan

          It also covers sound, and more critically remote desktop.

    2. Anonymous Coward
      Anonymous Coward

      Re: Way to go : Tan

      Yeah, former VMware peep here.

      1. VMware to Virtualbox : laughable. (Oh and it's owned by Oracle - that's a safe bet on uncertainty)

      2. Subscriptions are not paid monthly

      3. vSphere was under priced for years. - This is just like SunMicro - never fully monetized their assets (Java) or priced the value of it's rock solid infrastructure solution. (Solaris - how many Solaris SPARC boxes had uptime measured in years - that in large part built the majority of 199x-2007 (commercial) internet sites. Cost? for all intents, zero - packaged with the (also very robust) hardware.

      4. Many are running to the cloud for effectively IaaS only - if they stopped their best of breed hardware bullcrap, and would pick an integrated stack and be more cloud like with low/zero provisioning BS for their application dev/users they'd save money (even with the expense of per core and subscription) compared to running long term workloads in the cloud. (but burst workloads in cloud good...)

      5. And perhaps like Sun - it's time/tech as come and is on it's way out (maybe K8s will take off big time - you're average developer is not working at Meta, and so far sucks at container/agile app dev)

      The *market* eventually figures this out and will extract it's value for it's investors. Don't like it - stay private. Or be like Dell and bounce in and/out and make tons of cash doing it.

      1. K

        Re: Way to go : Tan

        Software is only worth as much as customers are willing to pay.. as an IT Manager, if VMWare was more expensive, then we'd have rolled with other solutions - i.e. Hyper-V and Xen would have gotten a bigger slice of the pie.

        These days, there are more viable alternatives, which might not have the polish and shine of vSphere.. but companies will flock to these, which will in turn feed more investment and better products.

        The only 1 outcome from this, is broadcom will milk the largest clients, and that boon will only last as long as it takes those clients to migrate away, and many will... and at the same time, they're giving up their dominance of the on-premise market.

        Can't afford to play? Sure, but why buy Rolls Royce, when a Kia will do..

        1. mevets

          Re: Way to go : Tan

          I appreciate people who embrace the downscale market.

          What is the point in quality when users have a refresh button?

          Sure, some will never use your services again when you charge them for undelivered items, etc....

          But they are only a small percentage of your base.

          What company ever went wrong with hugging the fat middle of the curve?

    3. Lennart Sorensen

      Re: Way to go : Tan

      I gave up on vitualbox. The random packet corruptions on the virtual network interface that has been going on for years if reports are anything to go by just doesn't work for me. I need it to work reliably all the time. Having an image fail to install 10% of the time because virtualbox corrupted a packet is not acceptable. KVM on the other hand works great and has more features too.

      1. hammarbtyp

        Re: Way to go : Tan

        We moved to virtualbox. It wasn't so much cost, more the obscure configuration of vmware player which does not seem to be documented anywhere

        the difficulties of configuring TPM and secure boot was particularly challenging

    4. Robert Halloran

      Re: Way to go : Tan

      >> The plans are for VirtualBox to replace VMWare in almost all my clients.

      a) VirtualBox is meant as an end-user product b) Broadcom has announced the end-user products are being sold off to ??? c) Businesses using ESXi are generally looking at Proxmox or Nutanix as alternatives

  3. Shred

    We've acted decisively to increase customer value since we closed the acquisition in late November,"

    LoL wot?

    Our licensing price has just gone through the roof for absolutely nothing in return, other than continuing to use the same VMware product with the same features.

    Another month or two and the new Azure HCI cluster will be bedded in nicely and then it is “bye bye VMware and good riddance to Broadcom”.

    1. druck Silver badge

      Yes because Microsoft have never gouged anyone with their entirely fair and transparent licencing.

      1. Piro Silver badge

        Microsoft is shit.

        But, if you have an estate of Windows servers, you have to deal with them anyway.

      2. Donn Bly

        Yes, and it says a lot when Microsoft is the lesser of two evils

    2. Crypto Monad Silver badge

      > “We've acted decisively to increase customer value since we closed the acquisition in late November,"

      > LoL wot?

      By "customer value" he means what the customers are worth to Broadcom in terms of revenue - not the value of VMware software and services to customers.

      1. Phil Koenig

        Yeah I was thinking just the same.

        How do you provide "value" to customers by ballooning the prices and chaining them to a perpetual rental property whose attributes you can change on a moment's whim?

        Kinda like the value of a web-ad-clicking nameless human who is only valued for their clicks.

      2. Jay 2

        Yep, was going to say exactly the same thing.

        They've already lost some potential sales at my place. And I suspect the higher ups are more than likely to decide that in the next 18 months or so our VMware estate will shrink somewhat.

  4. hx

    They lost the entire Fortune 1000

    You know, as much as I hate marketing people, perhaps a marketing person could have helped here by telling bosses "you friggin morons these customers you're trying to exploit through lockin are the ones that are actually most able to leave because they have the manpower and they were already moving everything to the cloud because the only thing they want to own are their employees"

    1. Anonymous Coward
      Anonymous Coward

      Re: They lost the entire Fortune 1000

      Almost exactly right.

      Except the companies generally don't want to own their employees either -- most of them prefer to rent contractors which can be paid like a reoccurring expense, without pesky benefits, and cut loose with minimal effort.

  5. train_wreck

    Tan can get Hocked. The ~60K seat healthcare conglomerate I’m at has been actively investigating alternatives since the announcement earlier this year. I will be very interested to see where my company (and from street talk many others) lands.

  6. mevets

    RIP: VMware

    VMware was an exceptional company.

    In Technology, they were the only? pure systems software shop going.

    They made crazy virtualization technology work, even when there was little hardware support.

    They made assisted virtualization better than the underlying technologies supported.

    They were the leader; everybody else followed with grim, hacky copies of what they had.

    So, Hock, how many of the *monitor* team are still with you?

    They were, of course, targeted for retention, yet have been showing up at interviews for the last 6 months.

    It is terrible that these raiders can slash and burn.

    There will not be another VMware.

  7. Anonymous Coward
    Anonymous Coward

    LOL. Lol lol lol lol lol.

    I never gave them a penny, I've been pirating for years. My personal servers had keygen'd 'enterprise' vsphere.

    But I directed actual money to VMware for my clients. And now I'm migrating my stuff to Proxmox. They screwed up, and screwed up bad.

  8. Vulture@C64

    Broadcom might very well make a lot of money from this venture over the next few years, there's no doubt about that, but nobody forgets being shafted, even the CEOs and CFOs of the Fortune 100 don't like it, no amount of stock options or salary or benefits make up for being made a public looser in the finance game. They won't forget and the industry won't forget.

    The world is also a much smaller place than you think when it comes to the people who have the authority/money/position to spend millions of $ on IT infrastructure and they won't forget this either ! We can't stop it happening but we can make better decisions in the future.

    We've abandoned VMware for XCP-NG, not just because of the cost increase, but primarily because we don't want to do business with a bunch of rancid vultures who think so little of their customers that they think they can walk all over us and then offer us scraps of white label product from the tables of the second tier partners.

    Broadcom don't need me or our money, they will survive from the 1000 largest customers VMware has and they will think it's great and as per their plan.

  9. Rgen

    It is beyond fixing now. It will slowly bleed. Time to for you to look another company to screw with.

  10. xyz123 Silver badge

    basically VMWare is a dead product and a dead company. No free version, subscriptions not being renewed. the entire product line is being bricked, and comes to a screeching end with the end date of the longest enterprise customer.

    1. hoola Silver badge

      There will be a hard core group of customers will continue to pay.

      That is their choice, we may not agree but wherever you look there is always a group that are locked in to something for whatever reason. It is often not genuine technical reasons but usually management or high-level techies using features comparison charts to protect their favourite product, skills, certifications, job etc (delete as appropriate).

      I suggest that for the foreseeable future there will be enough people pay Broadcom for VM subscriptions to make things work. I mean, you can buy it as a service in Azure now. It is not going to disappear quickly.

  11. Randall Shimizu

    HockTan seems oblivious and callous to customer concerns.... VMware is now beginning to realize that customers will not put up with this.

  12. Anonymous Coward
    Anonymous Coward

    Nobody is mentioning the elephant in the room.

    The main reason companies IT people are scratching to get rid of VMware is due to it now operating under Chinese law. As China has the most prolific industrial/government/military hacking against US and its allies, it is flat out expected that vmware will turn sour, become spyware and likely malicious as a weapon of war - brick your adversaries tech, and or maintain that back door.

    Moved to subscription - to maintain a connection, or it shuts down.

    Same as we had to remove other products do to geopolitics, you don't let an adversary own or host the tech you are dependent on.

    It's a mater of time - tic tok, tic tok,,,

    1. Anonymous Coward
      Anonymous Coward

      Re: Nobody is mentioning the elephant in the room.

      Wait, what?

      How is Broadcom operating under Chinese law? Can you please explain?

      Broadcom is headquartered in California (USA).

  13. Anonymous Coward
    Anonymous Coward

    yes it has an office in CA, and it used to be a US company. It is ownership is currently Singapore, while not being in china, however is fully compliant/subservient to china law.

    Wikipedia page has been blocked from being updated since 2013. It does not show current data. You can research this with ease.

  14. Anonymous Coward
    Anonymous Coward

    They just lost us

    We have been a dedicated VMware partner for over 15 years. We host VMWare machines for customers and it has been the default virtualization product we have sold to clients.

    After an email we received from them this week, basically telling us we have 2 weeks to completely change our business model and tripling our costs we will now no longer sell any VMWare products and will be migrating away from them internally as soon as possible. Fortunately, we have already been experimenting with other products so have options.

    The way they are treating partners who have been the biggest evangelists for their products is simply appalling.

  15. Anonymous Coward
    Anonymous Coward

    Clueless Tan?

    Another clueless CEO that have not engaged with any of his customers or vendors or listened to his employees (that are not scared to tell him the truth). We started POC other hypervisors. We will just not except paying 300% more for exactly the same functionality (does not matter how much lipstick you put on the bulldog)...

  16. Alan_67

    How to lose customers...

    It's been 2 weeks since I contacted Broadcom for support for our VMware products. Account is still not set up, support still not available... I thought BT had the title for worst customer service in History but having now experienced Broadcoms support (and I use the word support loosely), I think the title has now been passed over.

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