The evolution of VMware’s sales and services model following Broadcom’s acquisition has raised concerns among customers and partners, with VMware acknowledging the need for adjustments. In a recent blog post, Broadcom CEO Hock Tan justified the changes in VMware as a response to market development, emphasizing VMware’s ongoing product innovation. Tan highlighted the price reduction of VMware Cloud Foundation (VCF) to compete with cloud service providers, driving customers towards either VCF or VMware vSphere Foundation (VVF) to streamline product offerings.
Additionally, Tan discussed the shift in pricing methodology for cloud service providers, aligning with Broadcom’s pricing model per core, simplifying cost calculations for end-customers and alleviating discrepancies in workload migration between on-premises and cloud environments. Notably, Google Cloud has become the first provider to support the new per-core pricing for VCF.
Furthermore, Tan mentioned VMware’s transition to solely offering subscription-based sales since 2018, positioning the company as a rear-guard in software organizations adopting this model. Subscription-based sales allow for better customer control and access to the latest technologies and security patches, moving away from traditional software sales methods. Tan emphasized that customers utilizing subscription sales can continue using older software versions and receive support as per contractual agreements.
TLDR: Following Broadcom’s acquisition, VMware has made strategic adjustments to its sales and services model, including price reductions, per-core pricing for cloud service providers, and a transition to subscription-based sales, aligning with current market trends.
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