VMware may have lost a 24,000 license customer

VMware may have lost a 24,000 license customer

Without naming VMware specifically, Computershare CTO says he was quoted "10 to 15 times" more than last years price after "the change".

Published on 27th May 2024

VMware’s troubles seem to be mounting in the wake of Broadcom’s acquisition of the company, with it seemingly losing a 24,000 license customer.

Broadcom completed its acquisition of VMware in late 2023 and almost immediately sparked a firestorm with licensing changes in which some customers saw a 12x increase in their licensing costs. CISPE, the European cloud organization, called out Broadcom’s “brutal” tactics, saying they “will decimate Europe’s independent cloud infrastructure sector.”

According to The Register, those brutal tactics appear to be backfiring. At Nutanix’s Next conference in Barcelona, Computershare’s CTO Kevin O’Connor spoke about Broadcom’s acquisition of VMware. Without naming VMware specifically, O’Connor said Computershare was using Nutanix AHV and another unnamed hypervisor from a “well-known competitor” when he arrived at the company 18 months ago. While he would have preferred to consolidate on one, the numbers didn’t make sense at the time.

After receiving a phone call about “the change,” in which he was told the licensing cost for the unnamed hypervisor would increase by 10 to 15 times. O’Connor began the migration to AHV, saying the decision will pay off in “single digit months.”

The Register emphasizes that, while O’Connor never specifically mentions VMware by name, the facts presented in his keynote leaves little doubt that he was talking about VMware.

The account is bad news for Broadcom, as it illustrates that companies may not be nearly as beholden and depended on VMware as the its new parent company would like to think.

Broadcom has a long-standing reputation for growing through acquisitions, and then squeezing every last bit of profit out of the companies it acquires. This reputation created a great deal of concern among those inside and outside the company in the months before the acquisition was completed.

“It’s like a sinking ship and we’re being asked to row until we go under,” one engineer said at the time, estimating that half of his work acquaintances are looking for other jobs. “Do I hang out here and the boat’s probably going to sink? Or do I jump ship because other people are?”

“People feel betrayed,” another VMware engineer was quoted as saying. “For my team of 10 I know four of us are actively interviewing.” Another one said that “the only thing keeping many people here is the specter of a recession.”

Broadcom’s CEO has taken steps to reassure customers but, if Computershare’s example is any indication, those steps are falling short. Only time will tell if the company will adjust course or continue to lose customers.

Source

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