Broadcom's Answer To VMware Pricing Outrage: You're Using It Wrong (theregister.com)
- Reference: 0178118117
- News link: https://it.slashdot.org/story/25/06/20/1331257/broadcoms-answer-to-vmware-pricing-outrage-youre-using-it-wrong
- Source link: https://www.theregister.com/2025/06/20/vmware_price_hikes_excuse/
Joe Baguley, Broadcom's chief technology officer for EMEA, countered that 87% of VMware's top 10,000 customers have signed up for VMware Cloud Foundation, and that cost complaints "don't play out" when Broadcom sits down with customers directly.
[1] https://www.theregister.com/2025/06/20/vmware_price_hikes_excuse/
[2] https://slashdot.org/story/22/05/26/1748248/broadcom-to-acquire-vmware-in-massive-61-billion-deal
AKA: (Score:2)
"Oh those pesky, stupid customers..."
Greed (Score:1)
Broadcom appears to have the attitude that if you are not stuffing at least a million dollars a year in their pockets they want nothing to do with you. I used to deploy new VMWare instances almost weekly- now I migrate folks to other products from VMWare.
Re: (Score:2)
> Broadcom appears to have the attitude that if you are not stuffing at least a million dollars a year in their pockets they want nothing to do with you.
In fairness, I have that same attitude. It just doesn't work out for me because I don't have the leverage.
migration project (Score:3)
I have been working for a year and a half on a hardware migration project that should have been super-easy: replace 5 ESXI hosts with newer faster servers, replace 1 SAN device + fiber switches, and replace aging switches, routers, and firewalls. My client, looking at a $30,000 VMware bill, said screw it and now they're moving to HyperV drastically increasing the time to complete what would have been a simple upgrade. Greed is mostly what's hurting the VMware platform.
"Simply" (Score:3)
> about costs simply weren't using the software bundles properly.
(emphasis mine) In other words: the pricing was changed to something that was ripping the customers off by default, and the pricing schemes are too complicated to be able to select the correct one. But the customer is to blame!
Agreed. (Score:4, Insightful)
The correct way to price up VMware solutions is not to use them. I do appreciate the confirmation of my earlier suspicions.
Translation (Score:2)
> "Joe Baguley, Broadcom's chief technology officer for EMEA, countered that 87% of VMware's top 10,000 customers have signed up for VMware Cloud Foundation, and that cost complaints "don't play out" when Broadcom sits down with customers directly."
My translation of that: if you are a huge-enough company and manage to arrange a meeting with Broadcom, you might be able to get terms that are only marginally-hiked instead of hugely-hiked. For now.
My recommendation is, if possible, look at XCP-NG/Xen Orchest
They will panic... (Score:2)
They will panic when gov't starts abandoning VMWare due to wild swings in the contract costs. MS, Oracle, etc. know that you can't directly extort money by raising the price - it has to be via "optional" support contracts. Rookie move Broadcom.
Re: (Score:3)
You completely misunderstand the business model that Broadcom has chosen to use here. For a primer, see the "Fuck you, pay me" scene from Goodfellas.
They are purposefully imploding their customer base. The goal is to squeeze every customer that cannot move off of vSphere like a lemon in a hydraulic press. They actually do not give a fuck if you migrate to another platform, because they'd rather have 10x the revenue from their captive big fish than worry about the small fish or the ones that got away.
More specifically (Score:2)
The truth is, most SMB customers don't use a lot of the features in VMWare's ecosystem. Many are only really useful once a customer gets to a certain scale. As a result, most customers didn't want to pay for those extra features, but if VMWare wanted to support them they needed to bundle them in to the price of the base Hypervisor licensing. The result: only really one or two big "everything" licenses that include a bunch of features that smaller organizations don't need.
I'm not defending Broadcom. IMO
greedy fucking liars!! (Score:3)
I run an IT shop for a city and we've run VMware over 10 years. 3 years ago I purchased a 3 year VMWare maintenance contract for $2700, $900 per year. We received government contract pricing and a multi-year discount. Next years renewal quote for the existing infrastructure - meaning no changes - for a single year is $32K. Yep, $900/year --> $32/year. In a city, that literally means citizens have to pay higher taxes if we continue with VMware. (we're not). This is an example of how corporate greed directly affects your pocketbooks.
Re: (Score:2)
Then switch to another software. This is a question of business model. Some businesses serve all different sizes of customer, while some only focus on the big ones. VMware is obviously switching from an "any size customer welcome" model to a "we serve the big fish" model.
$900 per year is really, really, realllllyyyy small potatoes. All due respect, but nowadays, 900 bucks is basically a few trips to the grocery store. 900 bucks probably amounts to roughly 10 hours of a single employee's time.
Broadc
Re: (Score:2)
The problem with this attitude is that if you wish to only cater to the large fish, you reduce the total ecosystem of that software, and risk losing the "but everyone uses X" ideal. Other companies will then step in, and present an alternative. If enough people use the alternatives, a new primary ecosystem may develop, and suddenly you're not it.
Microsoft has managed to not make this mistake with office, though they've flirted with it. Sometimes you need lots of small fish to lure the big fish.
Awfully convenient (Score:2)
What they are not saying, but what I suspect is part of the plan, is that the numbers only work out if you actively move toward being more locked in to their products.
If you just want the basic vsphere-managing-a-few-ESXi-hosts setup the bundle is stupidly expensive; but if you try to justify the cost of the bundle by using other parts of it you end up with a system that is significantly harder to migrate away when Broadcom decides to alter the deal further.
Facts matter (Score:5, Informative)
At the very low end, a basic setup of 3x ESXi + vCenter Server was costing me about 1 grand per year in licensing and basic support, and annual subscription. With Broadcom, they were going to bump me up one tier of features that I didn't need, and charge 5 grand per year but in 3-year lots, so 15 grand up front. When you're using to paying 1 grand per year (small business remember), suddenly being asked to cough up 15x as much... yeah...not going to happen... BYE! The cost in terms of labour for moving to Proxmox for (1) product testing (2) migration planning (3) migration actioning (4) training others and (5) documentation updates, has not been insignificant by any means and has costed many thousands yes, but compared to the ransom demanded by VMware, it has been a no-brainer, since they are all one-off costs. Overall I'm glad these corporate assholes pushed me to a solution that is ultimately better for us in just about every aspect - both lower licensing costs, and better features (at the low end... I know VMware beats Proxmox on features at the high-end "all you can eat" features level).
And you weren't the customer they wanted (Score:2)
I really hate that in some ways that I agree with Broadcom on some of this, because they're still a bunch of bastards for how they handled the vmware acquisition, even when they did the right thing. The whole point of the essentials three pack was to give you enough of a taste of the vmware experience that you'll be encouraged to stick with it as your grow. The problem is that the sort of environments that went with that bundle rarely ever grew to need anything larger and many of them never renewed maintena
Re: (Score:2)
> The whole point of the essentials three pack was to give you enough of a taste of the vmware experience that you'll be encouraged to stick with it as your grow.
Was it? I thought the whole point was "how do we extract revenue from customers too small and price sensitive to buy vSphere standard?" Anyone who just wanted "a taste of the experience" could run the free ESXi.
> The problem is that the sort of environments that went with that bundle rarely ever grew to need anything larger and many of them never renewed maintenance.
OK, I'll bite: why is that a "problem?"
Re: (Score:2)
Out of curiosity, what does your small business do that requires multiple ESXi and vCenter? I am not defending Broadcom, but that does not sound to me very small.
Re: Facts matter (Score:2)
Ok how do you run anything on less than 2-3 hypervisors, unless your RTO and RPO requirements are almost non-existant?