IBM will stop recruiting new customers for its VMware services on IBM Cloud at the end of this month. The company cites changes in Broadcom’s licensing policy as the direct reason for this decision.
According to IBM, the new rules prohibit it from selling VMware licenses to customers who do not already have an active VMware workload running on the platform before the specified date.
The measure follows a review of Broadcom’s VMware Cloud Services Provider (VCSP) program. Since August, Broadcom has required VMware users in hyperscale environments to purchase their licenses directly from Broadcom, rather than through their cloud provider. This change affects all providers, but IBM is so far the only major player to stop sales to new customers completely as a result.
Other hyperscalers, including Microsoft Azure, Google Cloud, Oracle Cloud, and Amazon Web Services, will continue to offer their VMware services and actively recruit new customers. Only Alibaba has discontinued its VMware offering, while Huawei never had one. This makes IBM’s decision remarkable, especially since the company will lose part of its existing cloud portfolio as a result, according to The Register.
IBM focuses on OpenShift
IBM has not provided any further explanation of the strategic considerations behind the decision. However, analysts point out that in recent years, IBM has increasingly focused on Red Hat OpenShift, which is at the heart of the company’s hybrid cloud strategy. OpenShift has also become a direct competitor to VMware Cloud Foundation (VCF). According to market research firm Gartner, OpenShift is currently considered the most important alternative to Broadcom’s VCF platform.
Although VMware still lists IBM as an official hyperscale partner, Big Blue has not played a major role in the global infrastructure market for some time. IBM has not been in the top five of Gartner’s IaaS provider ranking for five years, with Amazon, Microsoft, Google, Alibaba, and Huawei dominating the list.
For existing IBM Cloud customers, little will change for the time being. They can continue to use and expand their current VMware environments within their existing regions and resource pools. However, there are restrictions: new VMware services cannot be added, workloads cannot be moved to other regions, and Veeam Backup use remains limited to customers who already use it. New storage options via Veeam are only allowed on Cloud Object Storage.
The announcement only concerns the end of commercial availability of VMware services, not the end of technical support. Nevertheless, the move means that new customers will no longer have access to VMware on IBM Cloud, further shifting IBM’s position in the virtual infrastructure market toward its own OpenShift platform.