3 min

Tags in this article

, ,

VMware customers with perpetual licenses will still be supported. Broadcom CEO Hock Tan says the changed policy is in response to feedback from customers.

Shortly after Broadcom acquired VMware in November 2023, it quickly became apparent that the move to subscription-only licenses was imminent. Perpetual licenses, where the software is purchased once and comes with security patches, were removed from the offerings. The transition was anything but flawless, allowing competitors such as Nutanix to make their move due to the resulting lack of clarity about VMware’s changed offerings and pricing policies.

Longer transition time than expected

Now Hock Tan admits that customers need a longer transition time than he expected beforehand. Therefore, the company is making two changes. First, “many customers” who wanted to renew the defunct support contract have been given extensions. Second, supported versions of vSphere are getting free access to zero-day security patches. Other VMware products will follow.

This should either give customers time to eventually switch to a VMware subscription or allow them to still ensure that their perpetual licensed product remains secure.

These steps are timely: this week, the European Commission’s antitrust unit already appeared to have asked Broadcom about the changed licensing policy. The commitments toward existing customers makes it more likely that the authorities will be satisfied.

Also read: Liveblog Broadcom/VMware: EU antitrust unit probing Broadcom

Target: competitive with public cloud

The Broadcom CEO reiterates that VMware customers will generally face a lower fee with the new revenue model compared to before. In addition, he notes that VMware had already begun the transition toward subscriptions in 2018 and reminds us it was one of the last providers to switch to them then. Hock Tan argues that an ongoing subscription prevents customers from missing features and leads to more meaningful innovation.

Broadcom’s goal is to make VMware competitive with public cloud options, in part by offering organizations in their own data centres the same experience as cloud services. In addition, the transition between running applications on-prem or in different cloud environments should be as smooth as possible. VCF provides that, while vSphere Foundation (VVF) is meant to manage all infrastructure for running VMs and containers.

Tan is at least aware of the alternatives, with Nutanix being the most prominent. “We know our customers have many options, so we continue to innovate and adapt to be ever more relevant to them.”

Other changes

Other focal points for the revamped VMware include standardizing pricing and the technology stack. The former means that the entire pricing policy is on a per-core basis, both with cloud vendors and on-prem. The goal here is to make the cost of switching between vendors as manageable as possible. This also requires other steps. However, license portability, the ability to take a VCF license to another environment, is only supported by Google Cloud for now. Tan expects other partners and hyperscalers to move on this front.

Either way, Broadcom’s already changed VMware policy appears to be causing major shifts in the market. The Register cites a Gartner forecast that suggests a sharp decline in VMware’s market share. By 2029, the percentage of full-stack HCI users not using VMware would double from 30 percent to 60 percent.

Still, the Broadcom changes are not necessarily negative. We spoke with leading VMware partner SoftwareOne about the new policy a month and a half ago. There, they were cautiously positive about the revamped VMware offering.

Read more: Broadcom is the boss at VMware and knows exactly how to optimize it