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High Levels of Customer Unease Around VMware-Broadcom Deal: Report

• ByDavid Ramel
• June 10, 2024

CloudBolt Software, a Microsoft technical partner and self-described "cloud ROI company," recently commissioned a survey of 300 current VMware customers gauging their outlook on VMware'sacquisition by Broadcom.

The findings suggest a high level of customer unease, even after seven months post-acquisition.

According to the CloudBolt paper, titled "VMware Acquisition Aftermath" and conducted by Wakefield Research, an overwhelming majority of respondents (99 percent) expressed concern about the potential impact of Broadcom's acquisition of VMware on their business, with 76 percent being extremely or very concerned.

Other key findings include:

• Acquisition viewed as disruptive to IT strategy: 95 percent of respondents consider the acquisition disruptive to their IT strategy, with 46 percent viewing it as extremely/very disruptive.
• Expectations of steep price increases: All respondents signaled that they expect VMware prices to increase, with 73 percent anticipating more than a 100 percent price hike under Broadcom's ownership.
• Contract expirations coming soon: 69 percent of companies surveyed have VMware contracts expiring within the next 12 months.
• Decisions happening within the next year: While only 5 percent have already decided on their go-forward response to the acquisition, 58 percent plan to decide within 6 months, and 87 percent within the coming year.
• Multi-pronged approach of keeping and replacing VMware: When asked to select all possible courses of action under consideration, the top two responses were keeping some VMware solutions (43 percent) or remaining with VMware altogether (40 percent).
• Equally dispersed concerns leading to change: Top factors for companies moving away from VMware in part or whole are equally dispersed across various factors, with no single one being the primary reason. These include:
  • Uncertainty about Broadcom's plans: 36 percent
  • Concerns about support quality: 36 percent
  • Partner relationship updates: 36 percent
  • Required shift to subscription licensing: 34 percent
  • Anticipated price increases: 33 percent
  • Personal negative experiences with Broadcom: 33 percent
  • Broadcom's reputation from past acquisitions: 32 percent
  • Forced packaging/bundling of products: 30 percent
  • Worries about reduced innovation: 29 percent
• All VMware solutions under examination: Of companies who plan to abandon VMware solutions, vSphere (hypervisor) and vRealize (cloud management) were the top listed products. However, it should be noted that every primary VMware offering (NSX, Tanzu, vSAN, Horizon) received more than 30 percent likeliness to abandon.
  • 39 percent vSphere (hypervisor)
  • 37 percent vRealize (cloud management)
  • 34 percent NSX (networking)
  • 33 percent Tanzu (Kubernetes)
  • 31 percent vSan (storage)
  • 31 percent Horizon (VDI)
  • 0 percent Other

Broadcom's acquisition of VMware in November 2023 stirredongoing controversy, much of it of thelicensing kind. Though tumultuous to customers, the situation presents a not-modest opportunity for VMware rivals. Microsoft, for instance, has announcedseveraloffers to tempt VMware customers into migrating to its Azure cloud.

It should be noted that CloudBolt is itself a competitor of Broadcom/VMware -- especially in the cloud management and automation space. In February, it published a blog post titled, "VMWare Alternatives: Exploring migration options after Broadcom acquisition" that ultimately proposes its own orchestration platform as an alternative.