After two years of restructuring absolutely everything, Broadcom seems to have finished its complex preliminary strategy to begin launching the new VMware. The transfer of clients to competing companies continues to occur, but the firm led by Tan Hock is confident that its roadmap in which perpetual licenses are dispensed with in favor of a subscription context will bring greater benefits and fewer costs. And there all the spotlights shine on VMware Cloud Foundation (VCF9).
The changes in Broadcom’s strategy with respect to VMware could be seen from the first minute. Not only did the business model change, but also the partner strategy and even the events changed. Thus, the traditional VMware Explore that had been taking place in Barcelona for years has been replaced by smaller one-day meetings around some European cities.
Byte TI attended the Paris event held last week in which the main benefits of VCF9 were put on the table. Given that the portfolio has been simplified, this strategy of smaller meetings, with a main event that continues to be organized in the US, seems a more than correct decision. But, going into another matter, the truth is that there are still doubts about the new strategy on the part of some channel partners, as this publication was able to verify during the meeting.
The news from VCF9
Changing the traditional licensing model for a subscription model and doing so at a higher price does not seem, at first, to be a brilliant idea. Or at least, many of the customers did not appreciate it as such. So VMware’s speech at the meeting focused on touting the advantage of VCF9 as a platform that promises to not only transform data centers into a private cloud operating model, but also solve the historical frictions slowing businesses down.
As Joe Baguley, CTO EMEA at Broadcom, explained during the keynote, “VCF9 is a software-defined platform for running all application workloads, tightly integrating compute, networking and storage around the goal of the private cloud.” With it, the traditional frictions that are affecting companies are eliminated.
The first of them is the classic antagonism between “developers versus IT”. What became clear is that developers do not want to think about the infrastructure and its administration, while the IT department has to put in place the necessary limits on development to secure the environment. According to Baguley, “VCF9 allows companies to achieve a perfect balance that does not affect the speed of development and at the same time allows them to have control of IT.”
Another point of friction is related to the speed to comply with the time to market versus security. The growing number of cyber threats has made companies increasingly concerned about this section, but in many cases organizations are not willing to give up speed. According to Baguley, “VCF9 allows us to balance both priorities by being everything integrated and on a totally secure cloud platform.”
Finally, under the vision of VMware, companies have a highly complex environment that slows down IT departments. “They want to do the new, but they have to keep executing the old,” said Broadcom’s EMEA CTO. The advantage of VCF9 is that VCF enables the private cloud and the modern hybrid cloud model, eliminating this traditional problem.
After highlighting the main problems that companies have, it is time to explain why VCF9 is perfect for solving this series of challenges. And although it was not specifically mentioned, it does serve as a justification for the change in strategy that has caused so many rivers of ink to flow. Fundamentally, those that refer to the increase in prices.
In this sense, Krish Prasad, Senior VP and General Manager of the Cloud Foundation division, stressed the importance of Broadcom’s acquisition of VMware: “we could not have released VCF9 if we were only VMware. The development of this platform has required a tremendous investment that has only been possible thanks to the fact that VMware belongs to a company that has a capitalization of more than a billion dollars. Broadcom has allowed us to put together all the pieces we needed to create a platform built for the future whether it be containers or future AI workloads and other types of processors.”
The first private cloud platform
VMware’s relationship with the cloud has changed over time. Since Broadcom took control, it is time to be the maximum defender of the private cloud. In this sense, Mario Derba, Managing Director for Italy and Area Sales Leader for Iberia and Italy at Broadcom, stated in a meeting with the specialized press that “there is a resurgence of the on-premise model due to the problems that have arisen from implementations in the public cloud and that are fundamentally those related to costs, security and regulatory compliance.”
The manager noted that the rising wave of Artificial Intelligence (AI) is also accelerating this return, as critical business data cannot afford to remain in the public cloud indefinitely.
Given this, VCF9 is “the first modern private cloud platform designed to solve the complexity of on-premise deployment and internal organizational conflicts. With VCF9 you can break down silos, ensuring that server, networking and storage teams use the same tools and talk to each other. The goal is to provide the private cloud with the same agility and scalability that you get from the cloud public, but with full control over governance and security.”
But what about the price of VCF9?
The benefits of the platform seem clear, but the issue of price and subscriptions remains latent among partners and clients. Complaints extend not only to the change of model, but even to the impossibility of having adequate support, when a company decides to change providers and migrate to another platform. Something that has already earned him some ruling against it.
Broadcom claims that VCF9 is the first modern private cloud platform that resolves the complexity of on-premise deployment and internal organizational conflicts.
When asked by Byte TI, Derba defended the new business model, pointing out that the software sector has moved from perpetual licenses to annual subscriptions.
For the manager, “the problem in the case of Broadcom is that the new subscription price, which includes the updated software and up to 19 products in the case of VCF, is being compared with the old support cost that represented only a fraction of the total perpetual price. The reality is that, if the mathematics is done correctly, Broadcom is less expensive than VMware was. In this sense, the TCO analyzes that we have carried out with clients They point out that right now, with VCF9, savings of between 40% and 50% can be achieved in infrastructure, as long as the platform is implemented and silos are eliminated.”
The manager did not shy away from any issue. Not even when he valued another of the most widespread statements that claim that Broadcom is not interested in smaller clients and that it only focuses on those that are larger since they provide them with a greater margin. In this sense, the manager stated that “this rumor has circulated, possibly due to what happened with other acquisitions, but the reality is that we have not refused to work with smaller clients. Without going any further, from Iberia and Italy we manage around 200 strategic clients directly while the rest of the clients are served through the channel.”
Derba also noted that “the adoption of VCF9 requires a lot of internal work at the customer, such as eliminating organizational silos, and that paying a higher price forces customers to implement the solution completely and not just with isolated applications to obtain the return on investment.”
