Since closing its acquisition of VMware in November 2023, Broadcom has been committed to enhancing VMware’s portfolio and aligning it to market needs. Its efforts have focused on simplifying IT operations for customers and allowing them to manage licences efficiently, as well as improving engagement and relationships with its partners.
The VMware product catalogue and go-to-market channels have undergone significant changes. Announcements about its portfolio and partner engagement — the latest made ahead of its flagship cloud event, VMware Explore Las Vegas earlier in 2024 — reinforce Broadcom’s promise to simplify the core product set and provide further clarity on the go-to-market strategy for VMware and the partner supply chain for clients.
A recent report by CCS Insight investigates how Broadcom’s innovation, product and go-to-market strategies for VMware provide added value and meet the needs of customers and partners for efficient, secure and flexible IT solutions.
The report examines several factors that continue to shape the IT operations landscape. It considers Broadcom’s moves in the context of cloud implementation dynamics, the challenges, priorities and opportunities of modern cloud operations, the benefits of a universal stack strategy, and how VMware products can help in a hybrid IT environment.
VMware Cloud Foundation (VCF) provides a unified private cloud platform that operates both on-premises (including the edge) and in public clouds, offering a consistent experience for managing production workloads wherever they are hosted.
VMware developed technologies for a full-stack solution: VMware vSphere for compute virtualization, VMware NSX for virtual networks, VMware vSAN for storage, and VMware Aria for management. VCF represents an evolution, integrating these technologies to address diverse cloud requirements with a unified management experience. Also, VMware has integrated Kubernetes into vSphere so organizations have a single platform for running virtual machines and containers.
Even before its acquisition by Broadcom, VMware brought many of these capabilities together into a single offering — VCF — and began a gradual transition to a subscription model. The vast product catalogue of VMware often left customers confused, with the ambition of a unified platform sometimes clashing with product reality.
Broadcom CEO Hock Tan recognized this and emphasized the need for simplification to help customers take full advantage of VMware’s capabilities. Since acquiring VMware, Broadcom has been streamlining the offerings, resulting in significant changes in the portfolio and its ecosystem. It has looked to complete the transition to a subscription model as devised by VMware before the acquisition This transformation, although beneficial, has caused some market confusion, partly fuelled by competitors.
Mr Tan’s vision is straightforward: to simplify private cloud adoption for customers as VMware did for on-premises virtualization 25 years ago, making it easy to manage, deploy and support hybrid environments without restricting platform and development teams. VMware was already moving in this direction, but Broadcom has accelerated the change with substantial investment.
Broadcom recognizes that although customers already possess much of the technology needed to do this, they are not necessarily aware of it or how to use it. Hence the simplification of the VMware product catalogue with a main focus on VCF — it has rationalized 8,000 product variations into four core solutions: VMware vSphere Essentials Plus Kit and VMware vSphere Standard for small and medium businesses, and VMware vSphere Foundation and VMware Cloud Foundation for enterprises and those requiring a full-stack solution.
With these come a simplified licensing model and a reduced total cost of ownership to customers. Broadcom will continue to offer versions of vSphere for customers not needing VCF. It will also continue to provide technical support for existing customers with perpetual licences until the end of their support agreements.
The licensing changes within VMware have caused some concern, but the shift to a subscription model is not new. Companies like Microsoft and Adobe transitioned successfully to this model years ago, and Cisco has also embraced it. The change has benefited suppliers and customers, notably in ensuring that they receive the “latest and greatest” of the products offered through subscription. Aligning the VMware portfolio with this model can provide similar additional value.
Through a subscription model, customers receive constant updates and new innovations, unlike traditional release cycles that take months or years and depend on licence renewals. For Broadcom, it makes sense to offer VCF customers the same rapid innovation seen in public clouds.
The VMware partner network is also evolving. Broadcom wants customers to work with partners to maximize their VCF investment. Although large customers can buy directly, most will go through partners which can ensure they get the most value from the product. Recent changes include reorganizing the channel and reclassifying partners to provide value-added services rather than just shipping licences.
As enterprises invest in hybrid cloud environments, having a consistent private cloud platform with unified management for running virtual machines and containerized workloads is likely to provide long-term stability for development and operations. This platform should not restrict but enable them to exploit each cloud’s unique value, whether it is on-premises, at the edge or in a public or partner cloud. If the VMware portfolio lives up to Broadcom’s promises, it is well-positioned to provide such a platform, supporting customers in the cloud as effectively as it has on-premises environments for the past 25 years.
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