Broadcom's acquisition of VMware has introduced significant changes to VMware's licensing structure. Many VMware customers now face unexpected price hikes—sometimes as high as 30% or more at renewal. In fact, Broadcom offered AT&T a renewal with a 1,050% price increase, showing how significant these changes are becoming.
These changes have prompted organizations to explore their options, particularly those looking to manage costs while staying agile. Microsoft's Azure VMware Solutions (AVS) offers an alternative, allowing VMware customers to shift their workloads to a cloud environment that aligns with their budgets and modernization goals.
With AVS, businesses can reduce costs, gain flexibility, and avoid the complexities of traditional data center upkeep. This shift marks a pivotal moment for companies as they rethink their IT strategies, offering the potential for both immediate savings and long-term growth.
This article will explore what these VMware Broadcom changes mean for organizations moving forward.
Quick Takeaways
- Broadcom's acquisition of VMware has led to substantial licensing cost increases, often exceeding 30% at renewal, prompting customers to reconsider their options.
- Organizations are faced with three choices: staying with VMware at higher costs, migrating to Azure VMware Solutions (AVS) for immediate savings, or modernizing to native cloud platforms for long-term benefits.
- AVS offers an attractive alternative, enabling customers to migrate workloads seamlessly to Azure while enjoying lower, consumption-based pricing and avoiding hardware costs.
- Transitioning to proprietary hypervisors from AWS, Google Cloud, or Microsoft enables cost efficiency and modernizes infrastructure but presents challenges in compatibility and skills requirements.
- Protera supports businesses through the transition process by providing cost assessments, migration planning, and customized strategies tailored to each organization's specific needs.
Why VMware Licensing Costs Are Increasing
Broadcom's recent adjustments to VMware licensing costs are part of a strategic shift aimed at streamlining VMware's market presence and reducing operational expenses.
Since acquiring VMware, Broadcom has introduced substantial price increases, often 30% or more, when customers renew their licenses. By raising licensing fees, Broadcom appears to be encouraging organizations to move away from VMware, possibly to refocus resources and lower its own support and operational footprint.
For many businesses, this shift has created a problematic situation. Where VMware was once a cost-effective virtualization solution, these new expenses are compelling customers to reconsider VMware's suitability for their workloads.
The unexpected price hike has left organizations weighing the costs of staying with VMware versus transitioning to other platforms. As a result, businesses are now evaluating alternatives that can offer similar functionality without the financial strain, particularly cloud-based solutions that provide more predictable, consumption-based costs.
The Customer Dilemma – Stay, Move, or Modernize
Broadcom's price increases on VMware renewals have left many customers facing a tough decision, with renewal costs now eating into budgets and affecting long-term planning. The price increase has many organizations re-evaluating their infrastructure, with three primary paths to consider: staying, moving, or modernizing.
First, some businesses may choose to stay with VMware, absorbing the added costs to ensure continuity and avoid the complexity of migration. This option may seem simpler for organizations heavily invested in VMware's infrastructure, though it also means committing to higher licensing expenses.
Alternatively, many are considering migrating their workloads to other platforms or public clouds, such as Microsoft's Azure VMware Solutions. This option can provide a smoother path by allowing workloads to remain on VMware while benefiting from Azure's lower, consumption-based pricing. This model reduces the impact of Broadcom's licensing model.
Lastly, some organizations see this moment as a chance to modernize by moving away from VMware altogether. By adopting native hypervisors like AWS, Google Cloud, or Azure's virtualization technologies, companies can re-architect their environments to reduce reliance on VMware. Making this move can lead to further cost efficiencies and future flexibility.
The Rise of Azure VMware Solutions as an Alternative
Microsoft's partnership with Broadcom has introduced Azure VMware Solutions as a compelling alternative for businesses facing VMware's increased licensing fees. Through this collaboration, Microsoft offers AVS at lower licensing costs, enabling organizations to migrate their VMware workloads seamlessly into the Azure cloud while avoiding the financial impact of Broadcom's recent price hikes.
AVS brings several significant advantages. By shifting VMware workloads to Azure, businesses can enjoy reduced costs due to Microsoft's consumption-based billing model consolidating expenses and offering predictable monthly charges. In addition, companies eliminate the need for costly hardware investments and data center management, as Azure provides the necessary infrastructure.
In the long term, AVS delivers both savings and flexibility. With Azure's scalable environment, businesses can expand or reduce resources as needed, supporting growth without the traditional VMware model's limitations.
For those looking to modernize, AVS also provides a strategic stepping stone to fully embrace cloud-native solutions in the future, creating a path for gradual, controlled modernization.
Full Modernization to Native Cloud Solutions
Migration to Native Cloud
Moving to native cloud solutions means transitioning workloads from VMware to a cloud provider's proprietary hypervisor, such as AWS, Google Cloud, or Microsoft's platforms. This approach offers notable benefits because by using a provider's native environment, companies can unlock cost efficiencies and access specialized tools that drive modernization.
Native cloud platforms often have incentives, like optimized billing models and integrated security features. These features make it easier to scale resources and innovate without maintaining on-premises infrastructure.
This shift can also reduce the reliance on traditional data centers, allowing businesses to allocate more of their budgets to digital transformation and growth.
Challenges of Migration
Despite the advantages, migrating to a new hypervisor is not without challenges. Applications running on VMware may encounter compatibility issues when adapting to a cloud provider's native environment.
In addition, the transition requires skilled personnel familiar with the new platform, leading to retraining costs or hiring specialized staff. Ensuring business continuity and minimizing downtime during this shift also adds complexity, especially for organizations with critical workloads tied closely to VMware's ecosystem.
Addressing Skills and Resource Gaps
Need for New Expertise
As businesses move away from VMware due to Broadcom's price increases, they often need new skills to manage alternative platforms and hypervisors. This shift requires expertise in cloud-native technologies, whether transitioning workloads to Azure VMware Solutions, adopting AWS or Google Cloud hypervisors, or fully embracing native cloud solutions.
Adapting to these new platforms can be challenging for many teams familiar with VMware's environment.
Solutions for Transitioning
Companies can train current staff or consider external support to address this skills gap. Upskilling employees on new hypervisors is a solid long-term investment but requires time and resources. Alternatively, outsourcing to experts like Protera can provide immediate, seamless support.
Protera brings proficiency in VMware and Azure, enabling businesses to navigate the transition, ensure ongoing workload management, and achieve cost savings while minimizing disruption.
This flexible approach allows organizations to balance in-house training and professional guidance, aligning resources with modernization goals.
Protera's Role in Facilitating Smooth Transitions
How Protera Assists
Protera supports businesses in navigating the shift away from VMware by offering thorough cost assessments and migration planning. For companies exploring Azure VMware Solutions or native cloud platforms, Protera provides expertise in estimating both the immediate and long-term migration costs, providing a clear financial outlook.
With a range of support options, Protera assists through each phase, from initial planning and deployment to ongoing management. This service makes it easier for organizations to adapt to their new environments.
Customized Migration Strategies
Recognizing that each organization's needs are unique, Protera tailors its approach to suit specific goals. For some, this may involve a rapid transition to AVS; for others, it could mean a comprehensive migration to native cloud solutions.
Protera's customized strategies minimize business disruptions by managing resources, providing precise guidance, and offering ongoing support to ensure a seamless transition. This flexibility allows businesses to modernize at a pace that aligns with their operational and budgetary goals.
Combating Broadcom's Price Increases
Broadcom's licensing adjustments have driven significant cost increases, leaving many VMware customers to reassess their options. While some may stay with VMware, alternatives like Azure VMware Solutions offer immediate savings through lower licensing fees and simpler billing models. At the same time, native cloud solutions provide a path for long-term modernization and flexibility.
As businesses face these decisions, careful evaluation is necessary to optimize costs and operational efficiency. Consulting with experts like Protera can provide guidance as you navigate these changes.