Broadcom says VMware is a better money-making machine than it hoped Broadcom has told investors its integration of VMware is all but done, ahead of schedule, and that it has turned the virtualization giant into an even more prolific money machine than it hoped would be possible. Speaking on the giant conglomerate's Q4 2024 earnings call today, Broadcom CEO Hock Tan told investors VMware's …
I mean it's not like it's difficult to swap your hypervisor cross-org. If people didn't like these price increases they'd have bought something else. They certainly wouldn't be plotting a 12-18mth horizon in which they leveraged themselves off the platforms that had been chugging along for years by using these price increases to light a fire under a board and make it a priority activity in the short term meaning this action might collectively tank VMWare income from late 2025 and see it collapse wholesale from late 2026? No, definitely not. This is a sound business decision I'm sure.
It is certainly easier than for example moving between Oracle and SAP, but it still isn't an overnight job.
You would need a new host computer, install the new hypervisor on that, sort out your backup routine and software on it, migrate the vms one by one, and each individual vm might be an overnight job, once you've tested the migration on a less critical vm that you can easily roll back.
Yes, well, like the article says, the VMWare revenues will not be reported separately from now on.
So any future deterioration of profits of the company as a whole can be blamed on global economy headwinds, or tariffs, or whatever. Nobody needs mention VMWare again if there are bad news. But this quarter it's looking great!
"VMware renewal costs are in, boss. They've gone up by 200%."
"OK, renew it for this year, we have little choice, then start a migration project to get us off VMware by next year."
"Already on it..."
Short-term accounting will kill anything it touches, but especially IT products.
GJC
Completely overlooking the fact that customers are currently pinned in because they can't get off the driverless bus towards a cliff in the short term.
Rest assured those same customers are probably all bringing migration away to the top of the to-do list.
When that time comes to pass, Broadcom will see VMWare revenue drop off the proverbial cliff with the bus, but the passengers will be safely off it.
And knowing quite a number of others who effectively have PTSD from working there, I'd heartily recommend having nothing to do with them, either as a purchaser or as a place to work.
You will likely NEVER come across an ex-Broadcom employee who isn't happier now they have left. Some of the stories I hear are frankly unbelievable and possibly even criminal.
IF they get their return on investment plus "cost of money" in those three years, he did the job he was paid to do.
IF IT managers learn to not hang their company's infrastructure around one product/brand, he did a job that needed to be done.
I'm not praising Broadcom (and I've had a dislike for VMware long before Broadcom), I'm just marveling about how companies -- in business to make money and maximize profit -- don't comprehend that their vendors are in business for the EXACT SAME PURPOSE. Just as a change in management at your employer can change a workplace from great to unpleasant (or unpleasant to great, presumably, though I'm lacking hard data here), a change in management at a vendor can have the same effect. Some people show more blind devotion to their vendors than they do to their spouses.
So a further reduction in costs, getting rid of $1.2 billion in a quarter. Well, that's confirmation from Broadcom that the higher paid devs have been let go or walked out. Maybe most of them ? With cuts like this there is no way VMware will be a viable product in 3+ years time, who is developing and researching it, building it for the future. Nobody.
Kodak
“Gross margins on film ran close to 70%... And then, in 1981, along came digital.”
https://www.cam.ac.uk/research/news/the-rise-and-fall-of-kodaks-moment
VMWare
... and margins have gone from below 30 percent to 70 percent.
And then, customers started to bail
I liked VMWare awhile ago, they had the free version you could download and muck around with. The problem was that it ran as a Windows app, and Windows is a flaky shaky corporate environment that Microsoft owns and tends to give an almighty shake every once in awhile whenever they feel they need more money.
I moved to Ubuntu and run virt-manager instead, which is based on qemu.
I don’t miss VMWare.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2025
