[German]I'm adding yet another brick to the never-ending saga of "Broadcom buys VMware and squeezes the customers". It looks as if Broadcom's bet to squeeze as much money as possible out of VMware customers has paid off. The other day I read that 70 percent of large VMware customers currently book the vendor's largest license package.
Advertising
Distortions in the VMware license business
I have written numerous articles here on the blog about the trials and tribulations that VMware customers have faced following the takeover by Broadcom (see links at the end of the article). VMware customers were faced with discontinued products, the switch to the VMware Cloud Foundation (VCF) and accompanying price increases. Broadcom saw the cash registers ringing, as I revealed in the German article Broadcom erwartet 2024 bei VMware quartalsweises Umsatzwachstum im zweistelligen Prozentbereich.
For existing VMware customers, it's "eat or die", some customers have now said goodbye to VMware by Broadcom and switched to alternative virtualization solutions. Other customers are still working with old contracts, but are starting the migration.
70% of major customers book the most expensive package
And there are major customers that Broadcom is targeting who do not want to or cannot switch (analysts had indicated switching costs of up to 3,000 US dollars per VM, as stated by German site heise here). And here Broadcom's calculation that there is real money to be made in this area seems to be working out – at least Broadcom is now "harvesting".
On March 7, 2025, The Register published the article Broadcom has won. 70 percent of large VMware customers bought its biggest bundle. The message: The acquisition of VMware by Broadcom appears to be a great success. This is evident from the company's financial statements for the first quarter of the fiscal year 2025 (ended February 2, 2025).
The turnover of 14.92 billion US dollars corresponds to growth of 25% compared to the previous year, it said. Net profit of 5.5 billion dollars was 315% higher than the result for the first quarter of 2024.
Advertising
The company announced that a large majority of its 10,000 top customers have opted to purchase its Cloud Foundation Stack (VCF) and is experiencing strong growth.
In a Broadcom earnings call, CEO Hock Tan told investors, according to The Register, "We are selling customers on a full stack VCF … and at the end of the first quarter, about 70 percent of our largest 10,000 customers have adopted VCF." VMWare Cloud Foundation (VCF) is the largest of the packages offered by VMware by Broadcom. This means that customers are likely to receive higher bills for their existing VCF contracts at upcoming license renewals. Good for the coffers for Broadcom – how these customers see it, I'm not sure at the moment.
Similar articles:
Broadcom acquires VMware for 61 billion US-$
Broadcom plans to sell VMware end-user computing and carbon black businesses
Contracts for all VMware partners terminated by Broadcom for 2024
VMware OEM portal offline, customers cannot activate VMware licenses
Broadcom ends perpetual licenses for VMware products – End of the free ESXi server?
Statement from Broadcom on issue after Symantec acquisition
Symantec acquisition by Broadcom ends in license/support chaos
After discontinuation: VMware Player, Workstation and Fusion seems to remain
Microsoft survey on virtualization: Migration from VMware
Private equity firm KKR buys VMware end customer business for 4 billion dollars
VMware product portfolio: Licensing internals; and Lenovo has been out since Feb. 27, 2024
VMware by Broadcom: "Things are not going well with the Broadcom plans"
Is Broadcom going downhill with its VMware measures? Silent layoffs and CISPE calls for EU measures
VMware by Broadcom: (Vain) hope of the partners for a White Label "lifeline"?
Bye, bye VMware ESXi: Field report on the migration to Proxmox
Proxmox releases import wizard for VMware ESXi VMs
VMware plans two Cloud Foundation releases, can they do it? CISPE complaint filed
Microsoft on the future of Windows Server 2025 Hyper-V
Massive price hike in license costs: Is Citrix now also copying the "Broadcom business approach"?
Private equity firm KKR buys VMware end customer business for 4 billion dollars
Analyses: VMware acts as planned with licenses; switching to alternatives a problem
VMware users: Attention, portal migration to Broadcom on April 30, 2024
Citrix: License renewal currently not possible? VMware deprecates old web client
Broadcom accommodates VMware customers with licenses; EU Commission sends questions
Broadcom: "VMware is not suitable for everyone (in the charity sector)"
Broadcom leaks email-addresses from VMware administrators; AWS is out as a VMware customer, relief for cloud customers
VMware Player/Fusion Player is End of Sale; VMware security advisories now at Broadcom
Customer loss at VMware; Customers switch to Nutanix AHV; Bumpy portal switch
VMware by Broadcom signs agreement with Dell, Microsoft, Lenovo and HPE
Did the User Portal migration from VMware to Broadcom work for you?
Interview: VMware takeover by Broadcom, what are the consequences?
Analysis: More than half of VMware customers are planning to leave
VMWare by Broadcom: Next fail with training credits
Advertising
