The changes in costs and partnerships that Broadcom VMware announced in May could open the market to competitors and could disrupt professionals trained in the digitization workflows, according to industry experts.
Broadcom, which announced its acquisition of VMware in 2022 and finalized the $61 billion deal in 2023, has come under fire multiple times. In early 2024, CEO and President Hock Tan wrote that “this level of change has understandably created some unease among our customers and partners.” Then, in the summer of 2024, IT Brew reported on an industry poll that suggested that customers were anticipating VMware to rapidly increase costs and claw back services, 95% of poll respondents reported that the acquisition was disrupting their IT strategy.
With VMware price increases of 800% to 1,500%, the company has once again landed itself in hot water with cloud service providers and partners.
Some customers, like AT&T and United Healthcare, have faced off with Broadcom in court as a result of its VMware acquisition. In late July, the Cloud Infrastructure Service Providers in Europe (CISPE) filed an appeal to the European General Court seeking to annul the European Commission’s approval of the acquisition.
“The dominance of VMware software in the virtualization market means that unfair new licensing terms enforced by Broadcom affect almost every European organization using cloud technology,” said secretary general of CISPE, Francisco Mingorance, in a release.
Plenty of fish. Industry leaders point to VMware client aggregation as an opportunity for other companies, such as Nutanix or Citrix, to step in and fill the gaps.
Chris Brill, Myriad360’s field CTO wrote in July about how Broadcom’s acquisition of VMware gave virtualization room to evolve and vendors a chance to provide services to customer niches within the market.
Myriad360, formerly known as Myriad Supply, became an enterprise partner with VMware in 2015. Brill confirmed via email that Myriad360 was a VMware partner until the middle of this year, when Broadcom removed a number of registered resellers. He said that the company currently has no status with VMware.
“We’re going to see fracturing in terms of the technologies that people are picking,” Brill said. “It really opened up the door for a lot of players to come in and carve out a specific focus based on the clientele that they’re trying to focus on.”
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Brill said that with the new price increases, engineers no longer have choice in running the software, which was once a safe bet.
“If you go into 90% of the companies out there, they’ve got VMware somewhere, and they’ve got engineers that had made careers out of that,” Brill said. “Overnight, they’re basically throwing their hands up in the air because their CFOs are saying, ‘we can’t afford this. We have to start looking at options.’”
Jack of all trades? For IT generalists, this might not be as big of an issue. For specialists, however, the tooling could look different than what they’re used to when it comes to moving away from VMware.
Specialists could, according to Citrix VP of platform marketing, Michael Von Kleef, cross paths into different hypervisors, or virtual machine monitors that can make and run virtual machines by sharing resources like processing or memory, as the principles are the same. Other facets of management and implementation would be different, however.
In a statement to IT Brew, Von Kleef advised specialists to be cautious about continuing to tie themselves to Broadcom VMware because of the chance that customers reevaluate their hypervisor strategy and accelerate transition to other solutions.
“Specialists should ensure they de-risk themselves from the changing demand,” Von Kleef wrote. “The good news is that many of these folks hold some very transferrable skills to other hypervisor and cloud platforms.”
Von Kleef said that there is an opportunity for IT pros to consider adjacent platforms, like XenServer or Microsoft Hyper-V, while still operating as someone who knows how to run infrastructure workloads—but signaled that professionals should remain agile through the changes.
“IT pros should always be looking for what’s next,” Von Kleef said. “It’s always important to just constantly be aware of what’s going to happen. Obviously this was a very disruptive change that perhaps people weren’t expecting as much as it happened.”