Considering all the hoopla surrounding Broadcom's purchase of VMware, you'd be forgiven for thinking Broadcom might experience some buyers' remorse and that partners and customers would be fleeing in droves. However, the reality, it turns out, is a lot different.
Cloud solutions and managed services provider OVHcloud surveyed 250 IT decision-makers, and it turns out that 91% of respondents said they plan to stay with VMware. A full 83% are happy with the change. A 15% price increase for some offerings impacted smaller customers the most, according to the research. Another key point: Many of those surveyed were already aiming to migrate to the cloud, and so Broadcom's vision for a simplified, unified VMware Cloud Foundations solution was well-received, according to the study.
"What we started to hear from our customers was a bit different from what we saw and heard in the media right from the very beginning," Pascal Jaillon, SVP of products and digital accounts, OVHcloud, told ChannelE2E. "So on one side, you saw the Reddit users who were like, absolutely mad at this development and had a very negative view of Broadcom, and then we had our customers, who were more wait-and-see attitude; asking questions and trying to understand where we were going with that. So we decided to see what the perception was from customers who are currently using VMware and get a better understanding of the situation," Jaillon said.
OVHcloud has been a VMware partner since 2011, Jaillon said, back before VMware even had a vision or truly understood the value of having a cloud-based version of its solution. Back then, the business model involved purchasing a license and then distributing through that license to end customers, he said. OVHcloud developed a tight relationship with the virtualization pioneer, and in 2017, even acquired the EMEA portion of the VMware vCloud Air business along with 250 employees and hundreds of end customers, Jaillon said -- which made Broadcom's VMware buy of incredible importance to OVHcloud. vCloud Air is VMware's former cloud offering based on the software-driven data center, designed specifically to meet enterprise needs and deliver a secure, hybrid cloud experience.
For them, the potential impact of the acquisition was a very big deal, which prompted them to commission the study. They were looking to accomplish three key things: Separate fact from fiction, determine what the future held for VMware customers and determine the impact of the acquisition on OVHcloud's own roadmap, Jaillon said.
Separating Fact From Fiction
First, Jaillon said, it quickly became clear that while many smaller customers were negatively impacted by the changes in price and licensing changes, the "silent majority" was not.
"We had heard 'Broadcom is killing VMware,' and yes, some smaller customers got impacted, but for our average customer -- bigger SMBs plus enterprise customers -- they were a bit less impacted," Jaillon said of the research findings. "Ultimately, we realized very quickly that the negative responses were kind of like the left side of a bell curve. And, ultimately, the majority is typically silent and it took this type of survey and research effort to get their opinions and their point of view. And overall, 91% of those we surveyed said 'We're going to stay.' And 83% said, 'We're actually happy about the change, though we'll wait and see how it goes later,'" Jaillon said.
Jaillon added the caveat that perhaps that was due to OVHcloud's having negotiated favorable terms with VMware, but the much-maligned price increases, at least from OVHcloud's perspective and that of their customers, was only moderate. For some solutions, like the larger capacity offerings, there was no price increase at all.
Where VMware is Headed
That said, Jaillon added that 46% of respondents did admit they'd have to make some changes. Broadcom CEO Hock Tan announced these at the North America VMware Explore conference, laying out a vision for the company's evolution that included a software suite that would allow seamless migration from on-premises to the cloud and back.
This hybrid and private cloud focus was a move VMware had been promising for a while, Jaillon said, but the company struggled to deliver.
"The reality is that they were struggling with a bloated product with a lot of features that, ultimately, did the same thing," Jaillon said. "The promise that Hock Tan made was that they would go to a single SKU for VCF, and that it would be super simplified. And of course, going to a subscription model," he said.
The fact that they'd purchased perpetual licenses did make many customers angry, but in 2024, it's hard to argue against the direction the rest of the software market is heading, Jaillon said. With subscriptions, you ultimately receive a better product in an ongoing manner as patches, updates, new features and capabilities are added, which delivers more value and doesn't require as much manual labor with regard to patching and installing updates, he said.
VMware or Bust
Of the 17% of respondents for whom the moves didn't make sense, some were already considering alternatives, the OVHcloud research showed, including 'home-brewing' a custom solution themselves with technologies like Kubernetes. Of those looking for alternatives, 51% said they considered Nutanix, but Jaillon cautioned that a different solution might introduce unanticipated challenges.
"Some will find an alternative solution, but they realize it's a full suite of products -- ultimately, the price may be even higher than Broadcom/VMware," he said. "And those who are the most advanced in their cloud migration, maybe they're saying, 'Hey, we may be able to do something in the public cloud; rework some of our applications and use this opportunity to build something ourselves' with a DIY approach."
The survey did highlight the growing shift toward SaaS-based cloud solutions, with 40% of on-prem VMware users aiming for the cloud, Jaillon said. OVHcloud plans to offer multi-tenant VMware solutions and align with Broadcom's new VCF platform.
Jaillon said one of the biggest misconceptions was that Broadcom/VMware end customers were stuck between the proverbial rock and a hard place -- 'trapped' with a vendor and a solution that would soon not work for them, but without the ability to move to a different vendor. That wasn't the case at all, according to OVH Cloud's research, he said.
"When we talked to VMware customers, it was very clear that they didn't just know one product, which is VMware -- they aren't this one vendor shop. What we saw was that many of the survey questions' answers added up to more than 100% because people had more than one vendor; more than one solution they were familiar with," he said. "That said to us that they are making a choice, an informed choice, to stick with VMware or not, because they know how public cloud works, how Citrix, Hyper V, Nutanix and the like work. These customers aren't 'trapped' -- they have other solutions. They have knowledge to understand and skills to build and move in a direction that's not VMware, if needed," he said.
