Broadcom

“extreme”-broadcom-proposed-price-hike-would-up-vmware-costs-1,050%,-at&t-says

“Extreme” Broadcom-proposed price hike would up VMware costs 1,050%, AT&T says

Legal dispute continues —

Broadcom “preventing some vendors from selling products to us,” AT&T alleges.

The logo of American cloud computing and virtualization technology company VMware is seen at the Mobile World Congress (MWC), the telecom industry's biggest annual gathering, in Barcelona on March 2, 2023.

Broadcom quoted AT&T a 1,050 percent price hike for VMware offerings, AT&T has claimed in legal documents.

AT&T sued Broadcom on August 29, accusing Broadcom of unlawfully denying it the second of three one-year renewals for support services that AT&T thinks it’s entitled to. AT&T cites a contract signed before Broadcom bought VMware. The telecommunications firm says it has 75,000 virtual machines (VMs) across approximately 8,600 servers running on VMware. Broadcom, which has stopped selling VMware perpetual licenses, has said that AT&T missed its opportunity to renew support and that the contract between VMware and AT&T has an “End of Availability” provision allowing VMware to retire products and services.

Legal filings from September 27 and spotted by The Register today show an email [PDF] that AT&T EVP and GM of wireline transformation and global supply chain Susan A. Johnson apparently sent to Broadcom CEO Hock Tan pointing to “an impasse” over VMware.

Johnson argued in the email that AT&T should have the right to renew support through September 2026 thanks to a previously signed five-year deal:

This proposed annual increase of +1,050% in one year is extreme and certainly not how we expect strategic partners to engage in doing business with AT&T.

A 1,050 percent price hike is the largest that Ars Technica has heard of being proposed by Broadcom. At this time, it’s unknown if AT&T’s claims are accurate. Broadcom hasn’t publicly commented on the allegations.

Many VMware customers have pointed to VMware becoming more expensive under Broadcom, though. Broadcom’s changes to selling VMware have reportedly included bundling products into only about two SKUs and higher CPU core requirements. In March, customers reportedly complained about price increases of up to 600 percent, per The Register. And in February, ServeTheHome said small cloud service providers reported prices increasing tenfold.

AT&T’s contract with VMware may be one of the firm’s bigger accounts. A 1,050 percent price hike would be another level, however, even for a company the size of AT&T. Per Johnson’s email, AT&T and Broadcom have had a “strategic relationship” for over a decade.

The email reads:

… AT&T has decided to pursue a legal strategy along with a disciplined plan to invest to migrate away, all of which will quickly become public. I truly wish we had another option. Unfortunately, this decision will impact the future of our overall relationship and how we manage spend in other Broadcom areas.

AT&T on potentially migrating off VMware

In her email, Johnson points to migration costs as impacting how much AT&T is willing to pay for VMware.

According to the message, projected costs for moving AT&T off of VMware are $40 million to $50 million. AT&T is said to use VMware-based VMs for customer services operations and for operations management efficiency. Per AT&T’s email, migration “has a very quick payback” and “strong” internal rate of return, “especially given the high licensing costs proposed.”

On September 20, Broadcom requested that AT&T’s request to block Broadcom from discontinuing VMware support be denied. In legal documents [PDF], Broadcom said that AT&T is planning to ditch VMware and that AT&T could have spent “the last several months or even years” making the transition.

In an affidavit filed on September 27 [PDF], Johnson stated that her email to Tan does not suggest that migration “would be easy, quick, or inexpensive” and that “none of those would be accurate statements.”

“My point was that although it is not easy, cheap, or quick to migrate off VMware, Defendants’ high fees will incentivize us to migrate to another solution,” the affidavit reads.

Johnson also claimed that AT&T started exploring options for getting off VMware in December but thought that it had time to make decisions, since it believed it could opt to renew support for its licenses until September 2026.

In another legal filing from September 27 [PDF], Gordon Mansfield, president of global technology planning at AT&T Services, says:

AT&T currently estimates it will take a period of years to transition all of its servers currently operating with the VMware software away from VMware. Moreover, Defendants have not made it easy to do so since we understand that they are preventing some vendors from selling certain products to us.

The filing didn’t get into further detail about how exactly Broadcom could be blocking product sales to AT&T. Broadcom hasn’t publicly responded to Mansfield’s claim.

Regarding AT&T’s lawsuit, Broadcom has previously told Ars Technica that it “strongly disagrees with the allegations and is confident we will prevail in the legal process.”

Since Broadcom’s VMware acquisition, most customers are expected to have at least considered ditching VMware. However, moving can be challenging and costly as some IT environments are heavily dependent on VMware. Being able to ensure that things are able to run as expected during the transition period has also complicated potential migrations.

While AT&T and Broadcom’s legal dispute continues, Broadcom has agreed to continue providing AT&T with VMware support until October 9. A preliminary injunction hearing is scheduled for October 15.

“Extreme” Broadcom-proposed price hike would up VMware costs 1,050%, AT&T says Read More »

broadcom-responds-to-at&t’s-vmware-support-lawsuit:-at&t-has-“other-options”

Broadcom responds to AT&T’s VMware support lawsuit: AT&T has “other options”

Legal battle —

Broadcom defends against renewal, citing “End of Availability” provision.

Wooden gavel on table in a courtroom

Broadcom is accusing AT&T of trying to “rewind the clock and force” Broadcom “to sell support services for perpetual software licenses… that VMware has discontinued from its product line and to which AT&T has no contractual right to purchase.” The statement comes from legal documents Broadcom filed in response to AT&T’s lawsuit against Broadcom for refusing to renew support for its VMware perpetual licenses [PDF].

On August 29, AT&T filed a lawsuit [PDF] against Broadcom, alleging that Broadcom is breaking a contract by refusing to provide a one-year renewal for support for perpetually licensed VMware software. Broadcom famously ended perpetual VMware license sales shortly after closing its acquisition in favor of a subscription model featuring about two bundles of products rather than many SKUs.

AT&T claims its VMware contract (forged before Broadcom’s acquisition closed in November) entitles it to three one-year renewals of perpetual license support, and it’s currently trying to enact the second one. AT&T says it uses VMware products to run 75,000 virtual machines (VMs) across about 8,600 servers. The VMs are for supporting customer services operations and operations management efficiency, per AT&T. AT&T is asking the Supreme Court of the State of New York to stop Broadcom from ending VMware support services for AT&T and for “further relief” as deemed necessary.

On September 20, Broadcom filed for AT&T’s motion to be denied. Its defense includes its previously taken stance that VMware was moving toward a subscription model before Broadcom bought it. The transition from perpetual licenses to subscriptions was years in the making and, thus, something for which AT&T should have prepared, according to Broadcom. Broadcom claims that AT&T has admitted that it intends to migrate away from VMware software and that AT&T could have spent “the last several months or even years” doing so.

The filing argues: “AT&T resorts to sensationalism by accusing Broadcom of using ‘bullying tactics’ and ‘price gouging.’ Such attacks are intended to generate press and distract the Court from a much simpler story.”

Broadcom claims the simple story is that:

… the agreement contains an unambiguous “End of Availability” provision, which gives VMware the right to retire products and services at any time upon notice. What’s more, a year ago, AT&T opted not to purchase the very Support Services it now asks the Court to force VMware to provide. AT&T did so despite knowing Defendants were implementing a long planned and well-known business model transition and would soon no longer be selling the Support Services in question.

Broadcom says it has been negotiating with AT&T “for months” about a new contract, but the plaintiff “rejected every proposal despite favorable pricing.”

Broadcom’s filing also questions AT&T’s request for mandatory injunction, claiming that New York only grants those in “rare circumstances,” which allegedly don’t apply here.

AT&T has options, Broadcom says

AT&T’s lawsuit claims losing VMware support will cause extreme harm to itself and beyond. The lawsuit says that 22,000 of AT&T’s VMware VMs are used for support “of services to millions of police officers, firefighters, paramedics, emergency workers, and incident response team members nationwide… for use in connection with matters of public safety and/or national security.” It also claimed that communications for the Office of the President are at risk without VMware’s continued support.

However, Broadcom claims that AT&T has other choices, saying:

AT&T does have other options and, therefore, the most it can obtain is monetary damages. The fact that AT&T has been given more than eight-months’ notice and has in the meantime failed to take any measures to prevent its purported harm (e.g., buy a subscription for the new offerings or move to another solution) is telling and precludes any finding of irreparable harm. Even if AT&T thinks it deserves better pricing, it could have avoided its purported irreparable harm by entering in a subscription based deal and suing for monetary damages instead of injunctive relief.

AT&T previously declined to answer Ars Technica’s questions about its backup plans for supporting such important customers should it lose VMware support.

Broadcom has rubbed some customers the wrong way

Broadcom closed its VMware acquisition in November and quickly made dramatic changes. In addition to Broadcom’s reputation for overhauling companies after buying them, moves like ending perpetual licenses, taking VMware’s biggest customers directly instead of using channel partners, and raising costs by bundling products and issuing higher CPU core requirements have led customers and partners to reconsider working with the company. Migrating from VMware can be extremely challenging and expensive due to its deep integration into some IT environments, but many are investigating migration, and some expect Broadcom to face years of backlash.

As NAND Research founder and analyst Steve McDowell told TechTarget about this case:

It’s very unusual for customers to sue their vendors. I think Broadcom grossly underestimated how passionate the customer base is, [but] it’s a captive audience.

As this lawsuit demonstrates, Broadcom’s VMware has brought serious customer concerns around ongoing support. Companies like Spinnaker Support are trying to capitalize by offering third-party support services.

Martin Biggs, VP and managing director of EMEA and strategic initiatives at Spinnaker, told Ars Technica that his company provides support so customers can spend time determining their next move, whether that’s buying into a VMware subscription or moving on:

VMware customers are looking for options; the vast majority that we have spoken to don’t have a clear view yet of where they want to go, but in all cases the option of staying with VMware for the significantly increased fees is simply untenable. The challenge many have is that not paying fees means not getting support or security on their existing investment.

VMware’s support for AT&T was supposed to end on September 8, but the two companies entered an agreement to continue support until October 9. A hearing on a preliminary injunction is scheduled for October 15.

Broadcom responds to AT&T’s VMware support lawsuit: AT&T has “other options” Read More »

at&t-sues-broadcom-for-refusing-to-renew-perpetual-license-support

AT&T sues Broadcom for refusing to renew perpetual license support

AT&T vs. Broadcom —

Ars cited in lawsuit AT&T recently filed against Broadcom.

Signage is displayed outside the Broadcom offices on June 7, 2018 in San Jose, California.

AT&T filed a lawsuit against Broadcom on August 29 accusing it of seeking to “retroactively change existing VMware contracts to match its new corporate strategy.” The lawsuit, spotted by Channel Futures, concerns claims that Broadcom is not letting AT&T renew support services for previously purchased perpetual VMware software licenses unless AT&T meets certain conditions.

Broadcom closed its $61 billion VMware acquisition in November and swiftly enacted sweeping changes. For example, in December, Broadcom announced the end of VMware perpetual license sales in favor of subscriptions of bundled products. Combined with higher core requirements per CPU subscription, complaints ensued that VMware was getting more expensive to work with.

AT&T uses VMware software to run 75,000 virtual machines (VMs) across about 8,600 servers, per the complaint filed at the Supreme Court of the State of New York [PDF]. It reportedly uses the VMs to support customer service operations and for operations management efficiency.

AT&T feels it should be granted a one-year renewal for VMware support services, which it claimed would be the second of three one-year renewals to which its contract entitles it. According to AT&T, support services are critical in case of software errors and for upkeep, like security patches, software upgrades, and daily maintenance. Without support, “an error or software glitch” could result in disruptive failure, AT&T said.

AT&T claims Broadcom refuses to renew support and plans to terminate AT&T’s VMware support services on September 9. It asked the court to stop Broadcom from cutting VMware support services and for “further relief” deemed necessary. The New York Supreme Court has told Broadcom to respond within 20 days of the complaint’s filing.

In a statement to Ars Technica, an AT&T spokesperson said: “We have filed this complaint to preserve continuity in the services we provide and protect the interests of our customers.”

AT&T accuses Broadcom of trying to make it spend millions on unwanted software

AT&T’s lawsuit claims that Broadcom has refused to renew support services for AT&T’s perpetual licenses unless AT&T agrees to what it deems are unfair conditions that would cost it “tens of millions more than the price of the support services alone.”

The lawsuit reads:

Specifically, Broadcom is threatening to withhold essential support services for previously purchased VMware perpetually licensed software unless AT&T capitulates to Broadcom’s demands that AT&T purchase hundreds of millions of dollars’ worth of bundled subscription software and services, which AT&T does not want.

After buying VMware, Broadcom consolidated VMware’s offering from about 8,000 SKUs to four bundles, per Channel Futures. AT&T claims these subscription offerings “would impose significant additional contractual and technological obligations.” AT&T claims it might have to invest millions to “develop its network to accommodate the new software.”

VMware and AT&T’s agreement precludes “Broadcom’s attempt to bully AT&T into paying a king’s ransom for subscriptions AT&T does not want or need, or risk widespread network outages,” AT&T reckons.

In its lawsuit, AT&T claims “bullying tactics” were expected from Broadcom post-acquisition. Quoting Ars Technica reporting, the lawsuit claims that “Broadcom wasted no time strong-arming customers into highly unfavorable subscription models marked by ‘steeply increased prices[,]’ ‘refusing to maintain security conditions for perpetual license[d] [software,]’ and threatening to cut off support for existing products already licensed by customers—exactly as it has done here.'”

“Without the Support Services, the more than 75,000 virtual machines operated by AT&T⸺impacting millions of its customers worldwide⸺would all be just an error or software glitch away from failing,” AT&T’s lawsuit says.

Broadcom’s response

In the lawsuit, Broadcom alleges that AT&T is not eligible to renew support services for a year because it believes AT&T was supposed to renew all three one-year support service plans by the end of 2023.

In a statement to Ars Technica, a Broadcom company spokesperson said:

Broadcom strongly disagrees with the allegations and is confident we will prevail in the legal process. VMware has been moving to a subscription model, the standard for the software industry, for several years – beginning before the acquisition by Broadcom. Our focus will continue to be providing our customers choice and flexibility while helping them address their most complex technology challenges.

Communications for Office of the President, first responders could be affected

AT&T’s lawsuit emphasizes that should it lose support for VMware offerings, communications for the Office of the President and first responders would be at risk. AT&T claims that about 22,000 of its 75,000 VMs relying on VMware “are used in some way to support AT&T’s provision of services to millions of police officers, firefighters, paramedics, emergency workers and incident response team members nationwide… for use in connection with matters of public safety and/or national security.”

When reached for comment, AT&T’s spokesperson declined to comment on AT&T’s backup plan for minimizing disruption should it lose VMware support in a few days.

Ultimately, the case centers on “multiple documents involved, and resolution of the dispute will require interpretation as to which clauses prevail,” Benjamin B. Kabak, a partner practicing in technology and outsourcing at the Loeb & Loeb LLP New York law firm, points out

AT&T sues Broadcom for refusing to renew perpetual license support Read More »

vmware-customers-may-stay,-but-broadcom-could-face-backlash-“for-years-to-come”

VMware customers may stay, but Broadcom could face backlash “for years to come”

“The emotional shock has started to metabolize” —

300 director-level IT workers making VMware decisions were questioned.

VMware customers may stay, but Broadcom could face backlash “for years to come”

After acquiring VMware, Broadcom swiftly enacted widespread changes that resulted in strong public backlash. A new survey of 300 director-level IT workers at companies that are customers of North American VMware provides insight into the customer reaction to Broadcom’s overhaul.

The survey released Thursday doesn’t provide feedback from every VMware customer, but it’s the first time we’ve seen responses from IT decision-makers working for companies paying for VMware products. It echos concerns expressed at the announcement of some of Broadcom’s more controversial changes to VMware, like the end of perpetual licenses and growing costs.

CloudBolt Software commissioned Wakefield Research, a market research agency, to run the study from May 9 through May 23. The “CloudBolt Industry Insights Reality Report: VMware Acquisition Aftermath” includes responses from workers at 150 companies with fewer than 1,000 workers and 150 companies with more than 1,000 workers. Survey respondents were invited via email and took the survey online, with the report authors writing that results are subject to sampling variation of ±5.7 percentage points at a 95 percent confidence level.

Notably, Amazon Web Services (AWS) commissioned the report in partnership with CloudBolt. AWS’s partnership with VMware hit a road bump last month when Broadcom stopped allowing AWS to resell the VMware Cloud on AWS offering—a move that AWS said “disappointed it.” Kyle Campos, CloudBolt CTPO, told Ars Technica that the full extent to which AWS was involved in this report was helping underwrite the cost of research. But you can see why AWS would have interest in customer dissatisfaction with VMware.

Widespread worry

Every person surveyed said that they expect VMware prices to rise under Broadcom. In a March “User Group Town Hall,” attendees complained about “price rises of 500 and 600 percent,” according to The Register. We heard in February from ServeTheHome that “smaller” cloud service providers were claiming to see costs grow tenfold. In this week’s survey, 73 percent of respondents said they expect VMware prices to more than double. Twelve percent of respondents expect a price hike of 301 to 500 percent. Only 1 percent anticipate price hikes of 501 to 1,000 percent.

“At this juncture post-acquisition, most larger enterprises seem to have a clear understanding of how their next procurement cycle with Broadcom will be impacted from a pricing and packaging standpoint,” the report noted.

Further, 95 percent of survey respondents said they view Broadcom buying VMware as disruptive to their IT strategy, with 46 percent considering it extremely or very disruptive.

Widespread concerns about cost and IT strategy help explain why 99 percent of the 300 respondents said they are concerned about Broadcom owning VMware, with 46 percent being “very concerned” and 30 percent “extremely concerned.”

Broadcom didn’t respond to Ars’ request for comment.

Not jumping ship yet

Despite widespread anxiety over Broadcom’s VMware, most of the respondents said they will likely stay with VMware either partially (43 percent of respondents) or fully (40 percent). A smaller percentage of respondents said they would move more workloads to the public cloud (38 percent) or a different hypervisor (34 percent) or move entirely to the public cloud (33 percent). This is with 69 percent of respondents having at least one contract expiring with VMware within the next 12 months.

Many companies have already migrated easy-to-move workloads to the public cloud, CloudBolt’s Campos said in a statement. For many firms surveyed, what’s left in the data center “is a mixture of workloads requiring significant modernization or compliance bound to the data center,” including infrastructure components that have been in place for decades. Campos noted that many mission-critical workloads remain in the data center, and moving them is “daunting with unclear ROI.”

“The emotional shock has started to metabolize inside of the Broadcom customer base, but it’s metabolized in the form of strong commitment to mitigating the negative impacts of the Broadcom VMware acquisition,” Campos told Ars Technica.

Resistance to ditching VMware reflects how “embedded” VMware is within customer infrastructures, the CloudBolt exec told Ars, adding:

In many cases, the teams responsible for purchasing, implementing, and operating VMware have never even considered an alternative prior to this acquisition; it’s the only operating reality they know and they are used to buying out of this problem.

Top reasons cited for considering abandoning VMware partially or totally were uncertainty about Broadcom’s plans, concerns about support quality under Broadcom, and changes to relationships with channel partners (each named by 36 percent of respondents).

Following closely was the shift to subscription licensing (34 percent), expected price bumps (33 percent), and personal negative experiences with Broadcom (33 percent). Broadcom’s history with big buys like Symantec and CA Technologies also has 32 percent of people surveyed considering leaving VMware.

Although many firms seem to be weighing their options before potentially leaving VMware, Campos warned that Broadcom could see backlash continue “for months and even years to come,” considering the areas of concern cited in the survey and how all VMware offerings are near-equal candidates for eventual nixing.

VMware customers may stay, but Broadcom could face backlash “for years to come” Read More »

vmware-fusion,-workstation-now-free-for-home-use,-subscription-only-for-businesses

VMware Fusion, Workstation now free for home use, subscription-only for businesses

i’ve got good news and bad news —

Free for personal use, but businesses will have to fork over $120 per year.

VMware Fusion, Workstation now free for home use, subscription-only for businesses

VMware

Broadcom’s acquisition of VMware last year has led to widespread upheaval at the company, including layoffs, big changes to how it approaches software licensing, and general angst from customers and partners. Broadcom also discontinued the free-to-use version of VMware’s vSphere Hypervisor, also known as ESXi, earlier this year, forcing home users to find alternatives.

But today there’s a bit of good news—for home users, at least. Broadcom is making VMware Fusion Pro 13 and VMWare Workstation Pro free for personal use.

Fusion Pro and Workstation Pro certainly aren’t the only free-to-use virtualization products—VirtualBox has existed for years, and there are many indie projects that make use of Apple’s virtualization frameworks for macOS. But VMware’s products are a bit more polished and easier to learn than some of those alternatives, and VMware’s file formats are also commonly used when redistributing virtual machines for retrocomputing purposes.

Today’s announcement may be less welcome for businesses that prefer perpetually licensed versions of Fusion Pro or Workstation Pro. VMware is phasing these licenses out, offering support for current perpetually licensed products until “their existing End of Life and End of General Support dates” but shifting to a subscription-only model for future updates.

VMware is framing this as a “simplification” that “eliminates 40+ other SKUs,” and while this may be true, it’s also likely just a side effect of Broadcom’s wider push to end standalone software sales in favor of a more lucrative subscription-only model. Broadcom has already stopped selling perpetual licenses for many other VMware products.

A Desktop Hypervisor app subscription will run businesses $120 per year. The only difference between the free home version and the paid business version is a “this product is licensed for personal use only” message that appears in the home version; Broadcom says that the products are functionally identical.

Since the full apps are going the free-to-use route, Broadcom is discontinuing the VMware Workstation Player and Fusion Player apps. These apps could be used to fire up pre-existing VMs but generally couldn’t create new virtual machines from scratch. Workstation Player will continue on as a component of Workstation Pro, but it will no longer be offered as a standalone product. Users of Fusion Player will be able to upgrade in place to Fusion Pro by updating the app to version 13.5.2 or later and deleting the Fusion Player license key. Workstation Player users will need to download and install the Workstation Pro software separately.

Users who want to use Fusion Pro and Workstation Pro will need to sign up for a Broadcom account; once they do, Fusion Pro can be downloaded from here, and Workstation Pro can be downloaded from here.

VMware Fusion, Workstation now free for home use, subscription-only for businesses Read More »

broadcom-says-“many”-vmware-perpetual-licenses-got-support-extensions

Broadcom says “many” VMware perpetual licenses got support extensions

Conveniently timed blog post —

Broadcom reportedly accused of changing VMware licensing and support conditions.

The logo of American cloud computing and virtualization technology company VMware is seen at the Mobile World Congress (MWC), the telecom industry's biggest annual gathering, in Barcelona on March 2, 2023.

Broadcom CEO Hock Tan this week publicized some concessions aimed at helping customers and partners ease into VMware’s recent business model changes. Tan reiterated that the controversial changes, like the end of perpetual licensing, aren’t going away. But amid questioning from antitrust officials in the European Union (EU), Tan announced that the company has already given support extensions for some VMware perpetual license holders.

Broadcom closed its $69 billion VMware acquisition in November. One of its first moves was ending VMware perpetual license sales in favor of subscriptions. Since December, Broadcom also hasn’t sold Support and Subscription renewals for VMware perpetual licenses.

In a blog post on Monday, Tan admitted that this shift requires “a change in the timing of customers’ expenditures and the balance of those expenditures between capital and operating spending.” As a result, Broadcom has “given support extensions to many customers who came up for renewal while these changes were rolling out.” Tan didn’t specify how Broadcom determined who is eligible for an extension or for how long. However, the executive’s blog is the first time Broadcom has announced such extensions and opens the door to more extension requests.

Tan also announced free access to zero-day security patches for supported versions of vSphere to “ensure that customers whose maintenance and support contracts have expired and choose to not continue on one of our subscription offerings are able to use perpetual licenses in a safe and secure fashion.” Tan said other VMware offerings would also receive this concession but didn’t say which or when.

Antitrust concerns in the EU

The news follows Broadcom being questioned by EU antitrust regulators. In late March, MLex said that a European Commission spokesperson had contacted Broadcom for questioning because the commission “received information suggesting that Broadcom is changing the conditions of VMware’s software licensing and support.” Reuters confirmed the news on Monday, the same day Tan posted his blog. Tan didn’t specify if his blog post was related to the EU probing. Broadcom moving VMware to a subscription model was one of the allegations that led to EU officials’ probe, MLex said last month. It’s unclear what, if anything, will follow the questioning.

Tan said this week that VMware’s plan to move to a subscription model started in 2018 (he previously said the plans started to “accelerate in 2019”) before Broadcom’s acquisition. He has argued that the transition ultimately occurred later than most competitors.

The Commission previously approved Broadcom’s VMware purchase in July after a separate antitrust investigation.

However, various European trade groups, including Beltug, a Belgian CIO trade group, and the CIO Platform Nederland association for CIOs and CDOs, wrote a letter (PDF) to the European Commission on March 28, requesting that the Commission “take appropriate action” against Broadcom, which it accused of implementing VMware business practices that resulted in “steeply increased prices,” “non-fulfillment of previous contractual agreements,” and Broadcom “refusing to maintain security conditions for perpetual licenses.”

Partner worries

VMware channel partners and customers have also criticized Broadcom’s VMware for seemingly having less interest in doing business with smaller businesses. The company previously announced that it is killing the VMware Cloud Services Provider (CSP) partner program. The Palo Alto-headquartered firm originally said that CSPs may be invited to the Broadcom Expert Advantage Partner Program. However, reported minimum core requirements seemed to outprice small firms; in February, some small managed service providers claimed that the price of doing VMware business would increase tenfold under the new structure.

Small CSPs will be able to white-label offerings from larger CSPs that qualified for Broadcom’s Premier or Pinnacle partner program tiers as of April 30, when VMware’s CSP partner program shutters. But in the meantime, Broadcom “will continue existing operations” small CSPs “under modified monthly billing arrangements until the white-label offers are available,” Tan said, adding that the move is about ensuring that “there is continuity of service for this smaller partner group.”

However, some channel partners accessing VMware offerings through larger partners remain worried about the future. CRN spoke with an anonymous channel partner selling VMware through Hewlett Packard Enterprise (HPE), which said that more than half of its VMware customers “have reached out to say they are concerned and they want to be aware of alternatives.”

Another unnamed HPE partner told CRN that Broadcom’s perceived prioritization of “the “bigger, more profitable customers, is sensible but “leaves a lot of people in the lurch.”

Broadcom didn’t respond to Ars’ request for comment.

Broadcom says “many” VMware perpetual licenses got support extensions Read More »

broadcom-execs-say-vmware-price,-subscription-complaints-are-unwarranted 

Broadcom execs say VMware price, subscription complaints are unwarranted 

Broadcom’s defense —

Industry groups aren’t giving up hope for government intervention.

vmware by Broadcom logo

Broadcom has made controversial changes to VMware since closing its acquisition of the virtualization brand in late November. Broadcom executives are trying to convince VMware customers and partners that they’ll eventually see the subscription-fueled light. But discontent remains, as illustrated by industry groups continuing to urge regulators to rein-in what they claim are unfair business practices.

Since Broadcom announced that it would no longer sell perpetual VMware licenses as of December 2023, there have been complaints about rising costs associated with this model. In March, a VMware User Group Town Hall saw attendees complaining of price jumps of up to 600 percent, The Register reported. Small managed service providers that had worked with VMware have reported seeing the price of business rising tenfold, per a February ServeTheHome report.

Broadcom execs defend subscription model

However, Sylvain Cazard, president of Broadcom Software for Asia-Pacific, reportedly told The Register that complaints about higher prices are unwarranted since customers using at least two components of VMware’s flagship Cloud Foundation will end up paying less and because the new pricing includes support, which VMware didn’t include before.

The Register reported that Cazard, as well as Paul Turner, VP of product management at VMware, and Prashanth Shenoy, VP of product and technical marketing for the Cloud, Infrastructure, Platforms, and Solutions group at VMware, all agreed that people who think moving to subscriptions is unfair aren’t considering that VMware waited longer than many in the industry to implement the model.

This is an argument Broadcom has made before. Broadcom CEO and President Hock Tan called subscription-only licensing “the industry standard” in a March blog post defending VMware’s changes.

Pushing for government intervention

Despite Broadcom execs’ efforts to convince people that its changes are reasonable and will eventually end up financially benefitting stakeholders, there’s still effort from industry groups to get federal regulators involved with how Broadcom is running VMware.

As reported by Dutch IT magazine Computable on Friday, representatives from Beltug, a Belgian CIO trade group; Le Cigref, a French network of companies interested in digital technology; the CIO Platform Nederland association for CIOs and CDOs; and VOICE e.V., a German association for IT decisionmakers, sent a letter [PDF] to European Commission President Ursula von der Leyen and European Commissioner Thierry Breton on Thursday to “strongly condemn” Broadcom’s businesses practices and ask the commission to take action.

The letter complains of “sudden changes in policy and practices” that Broadcom issued to VMware that the authors claim led to: “steeply increased prices; non-fulfillment of previous contractual agreements; disallowing reselling of licenses; refusing to maintain security conditions for perpetual licenses; (re)bundling of licenses, leading to higher costs; a shake up of the ecosystem of VMware resellers and partners”; and “a loss of knowledge.”

The letter reads, in part:

In the context of the VMware takeover and the change in business strategy, Broadcom’s contempt and brutality towards its customers are unprecedented in the recent history of the digital economy in Europe. In view of its scale and Broadcom’s impact, this case cannot be left exclusively to competition law technicians.

The letter also discusses concerns about Broadcom driving business to the public cloud with negative consequences for the European economy.

“This will further strengthen the position and power of the hyperscalers, which will have a profound impact on the entire market,” the letter says.

It’s worth noting that this group has written letters to the commission before and that the commission approved Broadcom’s VMware acquisition in July 2023 after an antitrust probe. However, Broadcom was recently contacted by antitrust authorities in Europe regarding claims that it was changing VMware software licensing and support conditions, MLex reported on Wednesday.

Regardless of whether a government body steps in, longtime VMware users and partners are reconsidering whether the company’s vision aligns with their own businesses. Meanwhile, rivals are pushing hard to capitalize on the disruption happening at VMware.

Cloud Foundation updates

Broadcom has a couple of big updates planned for VMware’s Cloud Foundation that, execs told The Register, will help people understand the value of the new VMware.

In July, Broadcom plans to update Cloud Foundation so that a single license key can be used for all components. The update is also supposed to heighten OAuth support as the company seeks to bring single sign-on to all VMware products and add a VMware NSX overlay. Turner told The Register that the changes are examples of how Broadcom is trying to make VMware Cloud Foundation easier to implement than before Broadcom took over.

In the first half of 2025, VMware plans to release the VCF 9 update, which will be “the fullest expression of Broadcom’s vision for product integration,” Shenoy told The Register. Turner claimed that because of the update, users with multiple VMware products would no longer need individual silos for discrete storage.

Broadcom execs say VMware price, subscription complaints are unwarranted  Read More »

proxmox-gives-vmware-esxi-users-a-place-to-go-after-broadcom-kills-free-version

Proxmox gives VMware ESXi users a place to go after Broadcom kills free version

time to migrate —

Proxmox is a Linux-based hypervisor that could replace ESXi for some users.

Proxmox gives VMware ESXi users a place to go after Broadcom kills free version

Broadcom has made sweeping changes to VMware’s business since acquiring the company in November 2023, killing off the perpetually licensed versions of VMware’s software and instituting large-scale layoffs. Broadcom executives have acknowledged the “unease” that all of these changes have created among VMware’s customers and partners but so far haven’t been interested in backtracking.

Among the casualties of the acquisition is the free version of VMware’s vSphere Hypervisor, also known as ESXi. ESXi is “bare-metal hypervisor” software, meaning that it allows users to run multiple operating systems on a single piece of hardware while still allowing those operating systems direct access to disks, GPUs, and other system resources.

One alternative to ESXi for home users and small organizations is Proxmox Virtual Environment, a Debian-based Linux operating system that provides broadly similar functionality and has the benefit of still being an actively developed product. To help jilted ESXi users, the Proxmox team has just added a new “integrated import wizard” to Proxmox that supports importing of ESXi VMs, easing the pain of migrating between platforms.

The announcement claims that an imported ESXi VM will have “most of its config mapped to Proxmox VE’s config model” to minimize downtime. The documentation indicates that the import wizard is still “in tech preview state” and “under active development,” though it’s also said to be “working stable.” The importer works with VMs made in ESXi versions 6.5 through 8.0, which was the most recent version available before Broadcom discontinued the software.

A wiki article from Proxmox also provides more information about preparing your VMs for the move. The article recommends uninstalling guest tools made to work with ESXi, noting network configuration settings like MAC addresses or any manually assigned IP addresses, and disabling any full-disk encryption that stores its keys in your hypervisor’s virtual TPM. It’s currently not possible to migrate vTPM settings from one hypervisor to another, so booting up a VM with disk encryption enabled will require a recovery key before the machine will boot.

Like the free version of ESXi, the free version of Proxmox VE doesn’t include technical support beyond what is offered in Proxmox’s community forums. For people who use Proxmox VE and want to deploy it more widely in a business, Proxmox does offer a few subscription tiers that provide access to its more stable Enterprise Repositories and actual technical support from the software’s developers.

Proxmox gives VMware ESXi users a place to go after Broadcom kills free version Read More »

after-114-days-of-change,-broadcom-ceo-acknowledges-vmware-related-“unease”

After 114 days of change, Broadcom CEO acknowledges VMware-related “unease”

M&A pains —

“There’s more to come.”

A Broadcom sign outside one of its offices.

Broadcom CEO and President Hock Tan has acknowledged the discomfort VMware customers and partners have experienced after the sweeping changes that Broadcom has instituted since it acquired the virtualization company 114 days ago.

In a blog post Thursday, Tan noted that Broadcom spent 18 months evaluating and buying VMware. He said that while there’s still a lot of work to do, the company has made “substantial progress.”

That so-called progress, though, has worried some of Broadcom’s customers and partners.

Tan wrote:

Of course, we recognize that this level of change has understandably created some unease among our customers and partners. But all of these moves have been with the goals of innovating faster, meeting our customers’ needs more effectively, and making it easier to do business with us.

Tan believes that the changes will ultimately “provide greater profitability and improved market opportunities” for channel partners. However, many IT solution provider businesses that were working with VMware have already been disrupted.

For example, after buying VMware, Broadcom took over the top 2,000 VMware accounts from VMware channel partners. In a March earnings call, Tan said that Broadcom has been focused on upselling those customers. He also said Broadcom expects VMware revenue to grow double-digits quarter over quarter for the rest of the fiscal year.

Beyond that, Broadcom ended the VMware channel partner program, making the primary path to reselling VMware an invite-only Broadcom program.

Additionally, Broadcom killing VMware perpetual licensing has reportedly upended financials for numerous businesses. In a March “User Group Town Hall,” attendees complained about “price rises of 500 and 600 percent,” The Register reported. In February, ServetheHome reported that “smaller” managed service providers focusing on cloud services were reporting seeing the price of working with VMware increase tenfold. “They do not have the revenue nor ability to charge for that kind of price increase, especially this rapidly,” ServeTheHome reported.

By contrast, Tan recently saw a financial windfall, making the equivalent of more than double his 2022 salary in 2023. A US Securities and Exchange Commission filing showed that Broadcom paid Tan $161.8 million, including $160.5 million in stock that will vest over the next five years (Tan isn’t eligible for more bonus payouts until 2028). Broadcom announced its VMware acquisition in May 2022 and closed in late November for $69 billion.

In his blog post, Tan defended the subscription-only licensing model, calling it “the industry standard.” He said VMware started accelerating its transition to this strategy in 2019, (which is before Broadcom bought VMware). He also linked to a February blog post from VMware’s Prashanth Shenoy, VP of product and technical marketing for the Cloud, Infrastructure, Platforms, and Solutions group at VMware, that also noted acquisition-related “concerns” but claimed the evolution would be fiscally prudent.

Other Broadcom-led changes to VMware over the past 114 days include at least 2,800 VMware jobs cut, shuttering the free version of ESXi, and plans to sell VMware’s End User Computing business to KKR, as well as spend $1 billion on VMware R&D.

After 114 days of change, Broadcom CEO acknowledges VMware-related “unease” Read More »

vmware-admits-sweeping-broadcom-changes-are-worrying-customers

VMware admits sweeping Broadcom changes are worrying customers

Sorry, not sorry —

Broadcom has cut VMware products, perpetual licenses, and its partner program.

The logo of American cloud computing and virtualization technology company VMware is seen at the Mobile World Congress (MWC), the telecom industry's biggest annual gathering, in Barcelona on March 2, 2023.

Broadcom has made a lot of changes to VMware since closing its acquisition of the company in November. On Wednesday, VMware admitted that these changes are worrying customers. With customers mulling alternatives and partners complaining, VMware is trying to do damage control and convince people that change is good.

Not surprisingly, the plea comes from a VMware marketing executive: Prashanth Shenoy, VP of product and technical marketing for the Cloud, Infrastructure, Platforms, and Solutions group at VMware. In Wednesday’s announcementShenoy admitted that VMware “has been all about change” since being swooped up for $61 billion. This has resulted in “many questions and concerns” as customers “evaluate how to maximize value from” VMware products.

Among these changes is VMware ending perpetual license sales in favor of a subscription-based business model. VMware had a history of relying on perpetual licensing; VMware called the model its “most renowned” a year ago.

Shenoy’s blog sought to provide reasoning for the change, with the executive writing that “all major enterprise software providers are on [subscription models] today.”

However, the idea that ‘”everyone’s doing it” has done little to ameliorate impacted customers who prefer paying for something once and owning it indefinitely (while paying for associated support costs). Customers are also dealing with budget concerns with already paid-for licenses set to lose support and the only alternative being a monthly fee.

Shenoy’s blog, though, focused on license portability. “This means you will be able to deploy on-premises and then take your subscription at any time to a supported Hyperscaler or VMware Cloud Services Provider environment as desired. You retain your license subscription as you move,” Shenoy wrote, noting new Google Cloud VMware Engine license portability support for VMware Cloud Foundation.

Further, Shenoy claimed the discontinuation of VMware products so that Broadcom could focus on VMware Cloud Foundation and vSphere Foundation would be beneficial, because “offering a few offerings that are lower in price on the high end and are packed with more value for the same or less cost on the lower end makes business sense for customers, partners, and VMware.”

This week, Broadcom axed the free version of vSphere Hypervisor, ESXi. As reported by my colleague Andrew Cunningham, the offering was useful for enthusiasts “who wanted to run multipurpose home servers or to split a system’s time between Windows and one or more Linux distributions without the headaches of dual booting” or who wanted to familiarize themselves with vSphere Hypervisor without having to pay for licensing. The removal of ESXi could contribute to an eventual VMware skills gap, ServeTheHome suggested.

Broadcom addresses VMware partner changes

Broadcom has also announced that it’s ending the VMware partner program. Broadcom initially said it would invite a select number of VMware channel partners to the Broadcom partner program but didn’t say how many, causing concerns about how smaller businesses would get access to VMware products.

Broadcom said it ultimately invited 18,000 VMware resellers to its partner program and said this included “all active” partners, as defined by partners who had active contracts within the last two years. However, 18,000 is fewer than the 28,000 partners VMware told ChannelE2E it had in March 2023. Broadcom didn’t respond to CRN’s questions asking about the discrepancy in numbers and hasn’t responded to questions that Ars Technica previously sent about how it was deciding which VMware partners it would invite to its program.

There are still concerns that channel partners won’t be able to meet Broadcom’s new requirements for being a VMware reseller, meaning that smaller companies may have to consider notable infrastructure changes and moving off VMware. Broadcom’s layoffs of thousands of VMware employees has reportedly hurt communication and contributed to confusion, too.

VMware’s Wednesday post also addressed Broadcom taking VMware’s biggest customers direct, removing channel partners from the equation:

It makes business sense for Broadcom to have close relationships with its most strategic VMware customers to make sure VMware Cloud Foundation is being adopted, used, and providing customer value. However, we expect there will be a role change in accounts that will have to be worked through so that both Broadcom and our partners are providing the most value and greatest impact to strategic customers. And, partners will play a critical role in adding value beyond what Broadcom may be able.

But while taking over VMware’s biggest accounts (CRN estimated in January that this affects about 2,000 accounts) may make business sense for Broadcom, it’s hard to imagine how it would make business sense for the IT businesses managing those accounts previously.

While Broadcom has made headlines with its dramatic changes to VMware, Shenoy argued that “Broadcom identified things that needed to change and, as a responsible company, made the changes quickly and decisively.”

“The changes that have taken place over the past 60+ days were absolutely necessary,” he added.

The implications of these changes will continue to be debated over the coming months as the impact of Broadcom’s strategy is realized. But in the meantime, it looks like Broadcom is sticking to its guns, even with rivals looking to capitalize on related uncertainty.

VMware admits sweeping Broadcom changes are worrying customers Read More »

broadcom-owned-vmware-kills-the-free-version-of-esxi-virtualization-software

Broadcom-owned VMware kills the free version of ESXi virtualization software

freesphere —

Software’s free version was a good fit for tinkerers and hobbyists.

Broadcom-owned VMware kills the free version of ESXi virtualization software

VMware

Since Broadcom’s $61 billion acquisition of VMware closed in November 2023, Broadcom has been charging ahead with major changes to the company’s personnel and products. In December, Broadcom began laying off thousands of employees and stopped selling perpetually licensed versions of VMware products, pushing its customers toward more stable and lucrative software subscriptions instead. In January, it ended its partner programs, potentially disrupting sales and service for many users of its products.

This week, Broadcom is making a change that is smaller in scale but possibly more relevant for home users of its products: The free version of VMware’s vSphere Hypervisor, also known as ESXi, is being discontinued.

ESXi is what is known as a “bare-metal hypervisor,” lightweight software that runs directly on hardware without requiring a separate operating system layer in between. ESXi allows you to split a PC’s physical resources (CPUs and CPU cores, RAM, storage, networking components, and so on) among multiple virtual machines. ESXi also supports passthrough for PCI, SATA, and USB accessories, allowing guest operating systems direct access to components like graphics cards and hard drives.

The free version of ESXi had limits compared to the full, paid enterprise versions—it could only support up to two physical CPUs, didn’t come with any software support, and lacked automated load-balancing and management features. But it was still useful for enthusiasts and home users who wanted to run multipurpose home servers or to split a system’s time between Windows and one or more Linux distributions without the headaches of dual booting. It was also a useful tool for people who used the enterprise versions of the vSphere Hypervisor but wanted to test the software or learn its ins and outs without dealing with paid licensing.

For the latter group, a 60-day trial of the VMware vSphere 8 software is still available. Tinkerers will be better off trying to migrate to an alternative product instead, like Proxmox, XCP-ng, or even the Hyper-V capabilities built into the Pro versions of Windows 10 and 11.

Broadcom-owned VMware kills the free version of ESXi virtualization software Read More »

broadcom-ends-vmware-perpetual-license-sales,-testing-customers-and-partners

Broadcom ends VMware perpetual license sales, testing customers and partners

saas —

Already-purchased licenses can still be used but will eventually lose support.

The logo of American cloud computing and virtualization technology company VMware is seen at the Mobile World Congress (MWC), the telecom industry's biggest annual gathering, in Barcelona on March 2, 2023.

Broadcom has moved forward with plans to transition VMware, a virtualization and cloud computing company, into a subscription-based business. As of December 11, it no longer sells perpetual licenses with VMware products. VMware, whose $61 billion acquisition by Broadcom closed in November, also announced on Monday that it will no longer sell support and subscription (SnS) for VMware products with perpetual licenses. Moving forward, VMware will only offer term licenses or subscriptions, according to its VMware blog post.

VMware customers with perpetual licenses and active support contracts can continue using them. VMware “will continue to provide support as defined in contractual commitments,” Krish Prasad, senior vice president and general manager for VMware’s Cloud Foundation Division, wrote. But when customers’ SnS terms end, they won’t have any support.

Broadcom hopes this will force customers into subscriptions, and it’s offering “upgrade pricing incentives” that weren’t detailed in the blog for customers who switch from perpetual licensing to a subscription.

These are the products affected, per Prasad’s blog:

  • VMware Aria Automation
  • VMware Aria Suite
  • VMware Aria Operations
  • VMware Aria Operations for Logs
  • VMware Aria Operations for Networks
  • VMware Aria Universal
  • VMware Cloud Foundation
  • VMware HCX
  • VMware NSX
  • VMware Site Recovery Manager
  • VMware vCloud Suite
  • VMware vSAN
  • VMware vSphere

Subscription-based future

Broadcom is looking to grow VMware’s EBITDA (earnings before interest, taxes, depreciation, and amortization) from about $4.7 billion to about $8.5 billion in three years, largely through shifting the company’s business model to subscriptions, Tom Krause, president of the Broadcom Software Group, said during a December 7 earnings call, per Forbes.

“This shift is the natural next step in our multi-year strategy to make it easier for customers to consume both our existing offerings and new innovations. VMware believes that a subscription model supports our customers with the innovation and flexibility they need as they undertake their digital transformations,” VMware’s blog said.

With changes effective immediately upon announcement, the news might sound abrupt. However, in May, soon after announcing its plans to acquire VMware, Broadcom CEO Hock Tan signaled a “rapid transition” to subscriptions.

At the time, Tan pointed to the importance of maintaining current VMware customers’ happiness, as well as leveraging the VMware sales team already in place. However, after less than a month of the deal’s close, reports point to concern among VMWare customers and partners.

Customer and partner concerns

VMware’s blog said “the industry has already embraced subscription as the standard for cloud consumption.” For years, software and even hardware vendors and investors have been pushing IT solution provider partners and customers toward recurring revenue models. However, VMware built much of its business on the perpetual license model. As noted by The Stack, VMware in February noted that perpetual licensing was the company’s “most renowned model.”

VMware’s blog this week listed “continuous innovation” and “faster time to value” as customer benefits for subscription models but didn’t detail how it came to those conclusions.

“Predictable investments” is also listed, but it’s hard to imagine a more predictable expense than paying for something once and having supported access to it indefinitely (assuming you continue paying any support costs). Now, VMware and its partners will be left convincing customers that their finances can afford a new monthly expense for something they thought was paid for. For Broadcom, though, it’s easier to see the benefits of turning VMware into more of a reliable and recurring revenue stream.

Additionally, Broadcom’s layoffs of at least 2,837 VMware employees have brought uncertainty to the VMware brand. A CRN report in late November pointed to VMware partners hearing customer concern about potential price raises and a lack of support. C.R. Howdyshell, CEO of Advizex, which reportedly made $30 million in VMware-tied revenue in 2022, told the publication that partners and customers were experiencing “significant concern and chaos” around VMware sales. Another channel partner noted to CRN the layoff of a close VMware sales contact.

But Broadcom has made it clear that it wants to “complete the transition of all VMware by Broadcom solutions to subscription licenses,” per Prasad’s blog.

The company hopes to convince skeptical channel partners that they’ll see the way, too. VMware, like many tech companies urging subscription models, pointed to “many partners” having success with subscription models already and “opportunity for partners to engage more strategically with customers and deliver higher-value services that drive customer success.”

However, because there’s no immediate customer benefit to the end of perpetual licenses, those impacted by VMware’s change in business strategy have to assess how much they’re willing to pay to access VMware products moving forward.

Broadcom ends VMware perpetual license sales, testing customers and partners Read More »