Broadcom recently completed the process of acquiring VMware for $61 billion.
As with every company ownership change, there are positive and negative ripple effects depending on the situation.
Unfortunately, for VMware (one of the most popular virtualization solutions), it is not good news.
Simplifying Licensing or Just Sugarcoating?
Right after the acquisition, VMware announced that there will be changes regarding how licenses work and the support cycle for VMware customers.
While they mention their aim as “simplifying” the licenses, but they just worsened it 🤦♂️🤦
And, how? By adopting a subscription-based license model and ditching the perpetual licenses.
So, perpetual licenses for VMware products are no longer a thing. You will have to subscribe to their products/services as per your requirements.
In the announcement, they mention:
VMware has been on a journey to transition to a subscription model for more than a year now, and the industry has already embraced subscription as the standard for cloud consumption. With a simplified portfolio in place, we’re completing our transition to subscription offerings. Offerings will solely be available as subscriptions or as term licenses following the end of sale of perpetual licenses and Support and Subscription (SnS) renewals beginning today.
From their perspective, they say that with a subscription model, customers will get more value for their investment.
But, I doubt anyone would agree with that thought. One-time fee purchase plans will always have a better value than subscription-based ones for customers.
Do you like Adobe's subscription-based model to use Adobe Premier Pro or prefer a one-time fee for Apple's Final Cut Pro (considering you have an Apple computer)? 🤔
I think most of you would prefer a one-time fee. So, it would be a similar preference for VMware customers.
Even VMware admitted to this fact for their business in a blog post early this year:
Perpetual On-prem or perpetual licensing comes with a License Key and SnS or a support option to buy. It is the most renowned model.
Pretty ironic, right?
Even if some customers manage with it, the existing customers may not be comfortable with their benefits of perpetual licenses coming to an end.
Yes, you read that right.
No, customers cannot renew their SnS contracts for perpetual licensed products after today. Broadcom will work with customers to help them “trade in” their perpetual products in exchange for the new subscription products, with upgrade pricing incentives. Customers can contact their VMware account or partner representative to learn more.
Existing customers get to use the software. However, the support for that would end, with an option to upgrade/shift to a subscription-based plan.
Along with these changes, there are tweaks to the product offerings with VMware Cloud Foundation:
- Slashed the subscription pricing by half and added enhanced support levels
- Introduced a new VMware vSphere Foundation to offer an enterprise-grade platform for mid-sized to smaller customers.
If you need to verify the products affected by this change, I suggest you to go through the official announcement where they answer a few more questions for customers.
Suggested Read 📖
So, Broadcom is Taking Advantage of the Situation?
I think yes.
As soon as they completed the acquisition, they made the change to get more revenue out of VMware products aggressively.
I think they could have kept some limited support for perpetual license holders, or may have continued offering it for certain eligible customers who cannot justify a subscription-model for their businesses.
Broadcom is just another corporate that makes acquisition bitter news for the end customers. Maybe, try to be different for a change?
Well, it is too late for that now.
Here's a free learning resource on Proxmox.
💬 What do you think about the VMware license simplification by Broadcom? Share your thoughts for an interesting discussion below!