Broadcom teases major VMware releases in March and July
Will they make price rises palatable? Or bring more of what a new Netflix lawsuit calls Broadcom's ‘Buy. Chop up. Raise prices' business plan?
Published on 8th January 2025
Broadcom’s annual report reveals two items of note for VMware customers: two planned major releases of its flagship VMware Cloud Foundation (VCF) suite due in March and July this year.
The annual report, a Form 10-K filing posted on December 20th, details R&D spend on VMware’s portfolio and mentions a July 2024 Cloud Foundation release. Readers may recall that in June 2024 VMware announced VCF version 5.2, and released it on July 23rd.
At the time, VMware said the release represented a “first step” towards making VCF easier to deploy and manage, thanks to the inclusion of live patching and more powerful upgrade tools.
But VMware’s portfolio still lacks a unified SDK and single sign-on, omissions that make it complex to manage.
Broadcom has promised that a forthcoming version 9.0 of VCF will tidy up those loose ends and deliver a powerful private cloud platform. But the company has not said when that upgrade will arrive.
The Form 10-K, however, mentions planned major releases in March and July. The March release has been allocated $2.9 billion of in-process research and development costs, suggesting it’s a big one. The July release is valued at just $750 million.
The annual report mentions that both releases were on VMware’s books at the time of its acquisition in November 2023, so perhaps plans have changed, or timeframes have slipped.
But just knowing that two releases are on a roadmap that Broadcom puts on the record will be welcome news for many VMware users as they contemplate moving from perpetual licenses or other subscriptions to Broadcom’s new bundles of software and services that typically see customers’ bills rise by at least 200 percent – and sometimes up to 1050 percent as claimed by AT&T.
Broadcom defends those prices on grounds that VCF is a powerful package that quickly pays for itself in productivity increases. But with VCF not yet in the form Broadcom says will deliver maximum efficiency, users are being asked to pay for less potent product before improvements arrive.
Buy. Chop up. Sell off. Raise prices. Rinse. Repeat.
Another item of Broadcom news that landed in late 2024 was a complaint from Netflix regarding infringement of patents related to virtualization.
The complaint alleges that Netflix holds five patents that Broadcom (and VMware before it) knowingly violated for years – because its own patent applications were rejected in part because the vid-streamer had already successfully patented its own tech.
For the patent pedants among you, the patents Netflix alleges are being infringed are all registered in the USA under numbers 7,779,424, 7,797,707, 8,799,891, 8,185,893 and 8,863,122.
Netflix also argues that pre-acquisition VMware had a culture of copying intellectual property, but doesn’t explain why it’s chosen this moment to litigate the patents.
The complaint does, however, offer a short history of VMware and Broadcom, observing that the latter’s business model has been described as “Buy. Chop up. Sell off. Raise prices. Rinse. Repeat.”
Maybe that’s the motivation for this legal action, given Broadcom has told investors it’s massively increased revenue and profit at VMware since its takeover.
