As the dust settles, VMware customers assess their future strategy 

9 min read
As the dust settles, VMware customers assess their future strategy

Following Broadcom’s acquisition of VMware in November 2023, VMware partners and customers have been confronted with numerous changes and been left feeling confused and uncertain about the future. First there was the news of consolidated SKUs, end of life of SaaS products, divestiture of the company’s End User Compute (EUC) division, and more recently it was announced that the VMware and AWS agreement to offer VMware Cloud on AWS had come to an end. 

As a consulting and managed services business with a rich legacy of delivering professional services to VMware customers, Xtravirt has seen first-hand the impact of these changes on businesses. Many have sought our professional opinion and guidance to help them understand what it all means for the supply, implementation and operation of VMware’s software portfolio, now and in the future, both in private and public cloud environments.  

Now that the dust has settled a little, this article aims to clear up some of the confusion and provide some clarity on what you and your organisation can do to navigate this new landscape in the most effective and efficient way possible, whatever your business goals and objectives. 

VMware by Broadcom Strategy

Following the acquisition, VMware by Broadcom has issued several go-to-market updates underpinning its overall strategy; from a technology point of view, these can be summarised by the following statement: “to promote adoption of VMware Cloud Foundation as the best subscription-based private cloud solution for innovation”. 

The market announcements have hinged around an intent to simplify its business model; under Broadcom, VMware has stated that it has: 

  • Completed the transition from traditional perpetual licensing to subscription-based offerings 
  • Significantly consolidated the software portfolio and product SKUs down to just three core products 
  • Reimagined the customer and partner programs to standardise the ecosystem 

The reaction to this from customers was a mix of confusion, anxiety and a not insubstantial sprinkling of anger. The situation was not helped by scaremongering from those looking to gain an advantage, or the spread of misinformation. Reports of customer tiers changing, products disappearing, support being pulled, 3, 4 even 5 times renewal costs, and mandated technology re-deployments were the norm for a while. 

Looking at the product portfolio today, customers are presented with three core subscription-only offerings to choose from, and subscriptions are now available to purchase on a per CPU core basis (a move away from previous socket-based licensing) and include: 

  • vSphere Standard* 
  • vSphere Foundation 
  • VMware Cloud Foundation (VCF) 

*A fourth offering, similar to vSphere Standard, called vSphere Essentials is also available for small deployments under 96 cores. 

The diagram below outlines, at a high level, the components included at each subscription level.

High-level points to consider are: 

  • vSphere Standard (and Essentials) provide customers with limited add-ons, namely disaster recovery and ransomware products 
  • Customers must be at least at vSphere Foundation level to leverage vSAN 
  • Customers must be at least at vSphere Foundation level to access advanced add-ons, such as Avi Load Balancing and Tanzu Mission Control 
  • vSphere Foundation customers receive 100GiB of vSAN per core included, VMware Cloud Foundation customers receive 1TiB per core, add-ons are available to support larger storage requirements 
  • For NSX capabilities and add-ons, customers must be subscribed to VMware Cloud Foundation 
  • Customers can consume a mixture of licenses across their different environments, such as vSphere Foundation and VMware Cloud Foundation, minimum 16 CPU cores. (With the exception of vSphere Essentials, vSphere limits customers to 96 cores across the entirety of their estate) 

More recently, we have learnt of further advanced services now offered, running on VMware Cloud Foundation, such as Data Services Manager (DSM) and Private AI with NVIDIA Enterprise which we expect to gather some significant traction over the next year. 

The introduction of DSM presents a compelling opportunity for VMware customers, as it allows them to run and operate opensource databases in their private clouds, in much the same way they would have done by deploying a database workload in a hyperscaler cloud today. The database platform is the native opensource version, with lifecycle management, scale and security services underpinned by VMware Cloud Foundation, providing comfort that functionality will be consistent with any other deployments. While DMS is included with VCF out-of-the-box, the option to add VMware-provided enterprise support for these databases is also available. This turns the opensource database platform into a supported and compliant enterprise component of the customer’s private cloud, reducing risk and accelerating adoption. These benefits all present themselves before the opportunities for licensing cost reduction are even considered.  

The following diagram highlights the capabilities of Data Services Manager running on VMware Cloud Foundation: 

What’s next for VMware customers? Your questions answered.

Hopefully the information so far has started to clear some of the mist, however, there are some inevitable and obvious questions yet to be answered. From speaking to customers and partners in our ecosystem, we are fielding questions in some common areas including: 

  • Products 
  • Support 
  • Procurement 

A snapshot of some of these FAQs is covered in the next section. 

VMware by Broadcom Product FAQs

VMware Site Recovery Manager is now part of the VMware Live Recovery suite as a subscription license add-on, the suite includes VMware Live Site Recovery (formerly SRM) and VMware Live Cyber Recovery (formerly VMware Cloud Disaster Recovery + VMware Ransomware).

For access to core NSXbacked networking infrastructure, customers must be at the VMware Cloud Foundation subscription level, and to access firewall capability (such as the Distributed Firewall) an additional add-on is required called Firewall. Firewall with Advanced Threat Prevention is also an available add-on. 

No. As part of the new licensing models, any versions of the vSphere ‘free’ edition are now End of General Availability (EOGA) without replacement. 

https://knowledge.broadcom.com/external/article/345098/end-of-general-availability-of-the-free.html 

VMware announced the end of life of its SaaS offerings in December 2023, meaning that when your existing subscription expires, the use of the SaaS versions of Aria will not be possible. The Aria Suite is part of both vSphere Foundation and VMware Cloud Foundation offerings (to different levels) but must be deployed within the data centre. More information about your options going forwards and how Xtravirt can support in this area can be found here: https://xtravirt.com/techfocus/blogs/vmware-aria-saas-eoa/ 

Originally, it was unclear what was going to happen to VCD, however, going forward it will be included in VCF, both in licensing and as part of the standard architecture and code.

In July 2024 global investment firm KKR officially confirmed it had completed the acquisition of the VMware EUC division from Broadcom. The former VMware EUC business now exists as a standalone company, named Omnissa, which continues to be led by its existing management team. Horizon and Workspace ONE product lines continue to be available and as a top tier partner to Omnissa, Xtravirt remain committed to supporting customers with their EUC strategy. Please see the procurement FAQs section below for more information regarding licensing. 

VMware by Broadcom Support FAQs

No. Support and subscriptions on existing perpetual licenses cannot be renewed.

VMware support will cease for the products included at the end of your existing support and subscription term. However, VMware will offer Critical Severity Security alerts for supported versions of vSphere. https://knowledge.broadcom.com/external/article?legacyId=97805 

This is an interesting point. Originally for VMware Cloud Foundation (VCF) the answer was yes in order to receive support from VMware, this is due to VCF being a prescriptive and traditionally greenfield-only product. VMware by Broadcom has since softened this approach, allowing for license subscriptions to be procured and support to be honoured without a full redeployment to a supported VCF architecture. In the latest VCF 5.2 offering, options around importing existing environments have also been introduced. 

https://blogs.vmware.com/cloud-foundation/2024/06/25/vmware-cloud-foundation-launch/ 

Yes. Xtravirt Managed Services (XMS) offers support for all VMware’s products ensuring that customers achieve the fullest benefits from the investments that they make. Many of our customers prefer our operational model for delivering managed services, compared to traditional outsourced services, since it allows them flexibility whilst they retain ownership and control of all of their products. Built on a “shared responsibility” basis, our approach, recognises that many customers need to continue operating some of their processes and management activities, but require our support or specialist skills in specific areas.  

For customers who have decided to pause their renewal decisions and have lost access to support provided by VMware, we offer escalated support which provides access to our skilled and experienced teams. When combined with the ongoing availability from VMware of critical patches for customers who make this choice, it provides a compelling offering while architecture and strategic direction is being reviewed 

VMware by Broadcom Procurement FAQs

Not necessarily. There are a lot of products and capabilities included in the new offerings. It is important to undertake an assessment exercise to ensure your environment will get the most value from your VMware investments and that it is procured as cost effectively as possible. Assessments should cover areas such as current and future strategy, existing technology deployments, hardware lifecycles, use cases, storage and compute sizing and possible consolidation. Xtravirt can help in these areas with our VMware Strategy Assessment, this will be touched on again further in this article. 

https://xtravirt.com/wp-content/uploads/2024/06/Xtravirt-VMware-Strategy-Assessment.pdf 

Strategic is the highest tier in Broadcom’s customer program. The early stance was that not only are enterprise customers to be managed directly via VMware by Broadcom, but also that strategic customers would only effectively be able to procure VCF. This stance has been softened somewhat to allow individual purchases of lower subscriptions (vSphere Foundation) in approved cases, and for strategic customers that have strong existing intrinsic partner relationships, then teaming agreements can be discussed allowing a partner to work with the customer and VMware by Broadcom in such circumstances.

The previous partner program was ended, with many former VMware service providers losing their partner status in the process. Xtravirt was invited to join Broadcom’s Partner Advantage Program and remains a top tier, Premier Partner, continuing to actively provide specialist VMware consulting, managed services and product and licensing support to organisations in the UK.

Shortly after acquiring VMware, Broadcom announced its intention to divest the VMware EUC business. In July 2024, leading investment firm KKR confirmed that it had completed its acquisition of VMware’s EUC division, with the new stand-alone business being rebranded, Omnissa.  

Broadcom and Omnissa have publicly confirmed their commitment to work together to maintain interoperability of technologies such as Horizon (with vSphere), as well as new license SKUs both with and without the infrastructure platform (vSphere and vSAN for example), to account for customers already licensed (such as via vSphere Foundation or VCF) as well as those who are looking to license their infrastructure via Omnissa instead. 

Xtravirt has a strong relationship with Omnissa and remains committed to the partnership and enabling success for EUC customers going forwards. 

https://xtravirt.com/news/welcome-omnissa/ 

VMware in the Cloud

With the renewed focus on VCF adoption as the private cloud for innovation (including the creation of its own single product division within Broadcom) and the end of life of SaaS products, it’s been unclear what the future of VMware’s public cloud strategy will be. News that ending the sale of VMware Cloud on AWS to ‘new’ customers took the market by surprise.

The current stance is that net new customers can’t officially purchase VMware Cloud on AWS, via any route. The exception to this is VMware Live Cyber Recovery customers, who can purchase VMware Cloud on AWS nodes on subscription (1 or 2 years unless by exception) to be pilot light hosts for recovery. There is a slight sting in the tail, as the on-demand host pricing option has gone, replaced by a just-in-time host pricing model with a minimum life of 30 days. This means that if customers need to scale beyond their base subscription (pilot light) for a DR test or real-world event, they will incur costs of the extra hosts they need for at least 30 days regardless of how long they are needed for.   

Moving away from VMware Cloud on AWS, it is clear that Broadcom’s main focus when it comes to public cloud will be VCF on hyperscaler, with Google being the first (with its Google Cloud VMware Engine) to have this architecture and license model, including portability from private clouds.

It is expected that this model will become common across other hyperscalers in time. Until then, the traditional alternatives for running VMware in the cloud are Microsoft’s Azure VMware Solution (the most mature of the offerings) and Oracle Cloud VMware Solution.

Put your IT strategy on the right path

As you can see, there is much to consider here, and whether your strategy is private cloud, public cloud or somewhere in the middle, there will undoubtedly be some complexity and challenges to overcome in order to move forward. 

Xtravirt can help you through this process in a variety of ways, including with our VMware Strategy Assessment, a work package designed to take a comprehensive snapshot of your organisation’s current environment and translate it to the new VMware by Broadcom portfolio. This offer is designed to provide organisations with a clear and actionable roadmap aligned to business goals, along with guidance on the commercial and operational factors required to support it.

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Head of Technical Pre-Sales