Cloud computing shifts up a gear:
Broadcom’s acquisition of VMware – a sales perspective.
According to Forbes*, the acquisition offers Managed Service Providers like Kyocera the opportunity to redefine the technological landscape in the burgeoning era of virtualisation and cloud computing. How so?
In November 2023 Broadcom completed its acquisition of the virtualisation giant VMware. Broadcom’s entry into the VMware ecosystem brought change, leaving customers and partners grappling with uncertainty. Several customers were quick to reach for the phone with questions, seeking guidance, airing concerns, and eager to understand what their future with VMware looked like.
I’d like to share three particular challenges that abruptly presented themselves to my customers. These were genuine phone calls from concerned customers who didn’t know which way to turn, and this event took me back to 2011 when the industry giant Oracle acquired a storage start-up Pillar Data Systems.
Pillar were an innovative SAN storage provider who were created with funding from Larry Ellison, the CEO of Oracle Corporation. I had just sold a system into a wealth management business, so was surprised one morning to learn our account management team had all been made redundant and were asked to re-apply for their roles in the new Oracle business. Many didn’t take up the offer, and we faced the next few months with ‘deck chair changes’ as we found our feet in the behemoth that is Oracle.
As a partner with no plans or need to become an Oracle partner our short stint with Oracle came to an end. I don’t quite know what happened to the AXIOM product line but assume if found a home within the Oracle hardware portfolio somewhere. I do recall my customers internal IT team found themselves engaging with a different support team that was a vastly different to the experience with Pillar. But the system performed well for many years before being retired.
This experience is not too dissimilar to the Broadcom acquisition of VMware, and in fact, I would say it went even further. Let me share these experiences:
Perpetual Licenses to Subscription
Broadcom’s decision to terminate long-standing perpetual licenses led to significant frustration. The shift to a subscription-based model is not a new event, however, it seems many customers are still accustomed to the traditional licensing approach.
While monthly or annual renewals may offer flexibility and align with industry trends, this abrupt transition left some customers feeling uneasy and dissatisfied that they were not given the choice. This is a key point for me, I don’t believe we would have seen such a backlash if customers were given the choice – perhaps a longer window to come to terms with the transition, may have been more acceptable.
I had an enterprise customer commencing a new project with capex set aside. They were simply unable to shift that capex spend to opex, and simultaneously it was proving impossible to obtain clarity on what the impact of the subscription change would have on them in the future years. The choice was made to re-architect the solution and adopt an alternative platform for that specific project. Another customer, like many others, have infrastructure that is so entwined in the VMware stack that re-platforming is not so easy. In another example, a customer in a budget constrained environment was faced with a 450% increase in cost – they are moving to Hyper-V.
Portfolio Changes
VMware embarked on a portfolio slimming exercise with the goal to simplify its offerings and enhance value from bundling. Having worked with VMware for over 15 years the portfolio has certainly grown, with a set of innovative technologies. In my experience VMware consistently maintained its reputation for being solid, bullet-proof, and a well-supported technology.
However, with change comes challenge, and I noticed early on the rumour-mill swinging into operation. Rumour of VMware’s EUC business being spun-off and Aria networking being discontinued led to one customer putting a micro segmentation project on hold before eventually seeking an alternative technology to solve their problem.
People
As experienced back in 2011, it’s become a certain inevitability that acquisitions lead to the integration of departments and teams, resulting in duplication of roles. I have to say, it was hardly unexpected to see the loss of many talented people at VMware as they moved to pastures new. I have met many people from VMware over the years and have to say they are some of the best I have had the pleasure of working with in the industry.
Relationships are forged over many years and the loss of key contacts, particularly in front of house roles, can lead to loss in confidence. During this uncertain time customers expressed dismay that they were unable to obtain the level of support expected and a sense they were left in the lurch. I am adamant this was not the fault or intention of VMware staff who, in my experience, always had nothing but utmost dedication to their customers & peers.
So what now?
Despite Broadcom’s efforts to justify these changes, even today months down the road, customer frustrations persist, and I believe this will lead to retention issues.
Customers fear the unknown: Will prices increase? Sadly, this looks to be the case, even if the customer gets free extra bells and whistles. VMware has always had a reputation for outstanding support – will this suffer under the Broadcom regime?
Partners fear the unknown: Resellers and MSPs must have the utmost confidence in the platforms they recommend to customers to run their business-critical workloads on. If customers are feeling uneasy, it’s likely partners remain uneasy.
Licensing: Customers that relied on perpetual licenses must adapt swiftly. The transition to subscriptions requires financial planning. If you are on a traditional model and the future is uncertain, feel free to reach out and we will support where we can.
Re-platforming: I have seen a lot of talk about migration to alternative platforms, this is not always as straight-forward as it sounds. Kyocera has a wide breadth of customers, for those with a handful of nodes the transition may be easier, but for enterprise customers with multiple nodes woven into the VMware fabric that transition may be significantly harder to navigate. The Kyocera motto is “Do what is right as a human being”. If you are unsure, speak to us, and let us give you our impartial advise.
Bridging support: If you need support in the interim period, Kyocera offers technical support for VMware, providing comparable software support to the manufacturer with an improved and collaborative approach to review, advise, and resolve issues surrounding software, operating systems, and compatibility issues on your supported VMware devices. If might just buy you some time to consider your options.
Conclusion
At Kyocera, we offer a range of cloud solutions that offer flexible and tailorable capabilities to meet the demands of the modern working environment. Whether this be Private Cloud or Public Cloud our mantra has always been ‘Right Cloud, Right Workload’.
We aim to offer impartial advice at all times. Whether you want support with the move to subscription licences or want to re-platform, we will be there for you.
I hope you have enjoyed this blog, it’s my first ever, so hopefully shares some personal experience and insight – if you are shaking uncontrollably in a dark room know you are not alone. If anything in this blog resonates with you, please reach out.
Meet Ben Davis
Sales Consultant ICT
I’m an experienced ICT professional with a passion for leveraging technology to drive business growth and innovation. With a proven track record of delivering results, I specialise in developing and implementing cutting-edge solutions that optimise operational efficiency and enhance user experiences.
My expertise spans a wide range of areas, including hybrid cloud, network modernisation, cyber security, enterprise mobility, but doesn’t stop there. I am well-versed in industry-leading technologies such as Microsoft, Azure & Office 365, HPE, Lenovo, Fortinet, and Crowdstrike, and I have a solid understanding of ITIL best practices that helps me shape a range of ICT managed services.
