How Will Licensing Changes to VMware by Broadcom Impact Your Business?

As part of Broadcom’s close of the VMware acquisition, the company is dramatically simplifying its product portfolio and transitioning all VMware by Broadcom solutions to subscription licenses, ending the sale of perpetual licenses.

In December, Broadcom announced it would be simplifying its product portfolio from hundreds of products down to two bundles:

• VMware Cloud Foundation (VCF), the company’s flagship enterprise-class hybrid cloud solution for business critical applications.
• VMware vSphere Foundation (VVF), which delivers a simplified enterprise-grade workload platform for mid-sized to smaller customers.

So what does that mean for VMware customers?

In addition to these changes, Broadcom’s largest customers will be required to buy directly from Broadcom. They will also be funneled into the VCF bundle, which could potentially increase their licensing costs significantly.

Other customers might only be using a small subset of tools in the VMware ecosystem, but because the perpetual licensing model is no longer available, they will also be funneled into this new model, which could increase their licensing costs.

Key changes include:

• A shift to pure subscription licensing; perpetual licensing is no longer available.
• A choice of only two bundles, compared to hundreds of previous options.
• The introduction of a bring-your-own-licensing (BYOL) capability for approved clouds (currently only available with Google Cloud with VCF for Azure available later this year).
• Forced change to production technology, since most VMware products are now end-of-availability.

What are your options?

In the long term, some customers may choose to move off VMware. In the meantime, there are limited options. However, in February, Broadcom announced an agreement with Google Cloud to support license portability of VCF to Google Cloud VMware Engine (GCVE).

GCVE runs on dedicated bare metal hardware (not in a shared tenant environment), allowing customers to run their existing VMware-based workloads in the cloud.

Under this agreement, customers will be able to purchase a subscription of the new VCF software from Broadcom and flexibly use that subscription in GCVE. They will also retain the rights to the subscription and have the ability to move it between supported environments.

This option will allow customers to seamlessly migrate virtual machines and workloads to Google Cloud, and manage cloud-based resources using the same familiar VMware tools and resources, while also accessing native containerized applications. They will also benefit from a unified Google Cloud experience, with integrated IAM and rapid self-service provisioning.

Benefits include:

• Price stability: A guaranteed price for up to three years with GCVE committed use discounts (CUDs).
• Compute portability: A “flex CUDs” offering, which will allow customers to move from GCVE to GCE or GKE.
• Business transformation: A suite of tools and services that can help customers on GCVE accelerate their business transformation, including VertexAI, BigQuery and other AI services.

How Pythian can help

As a global IT services company and Google partner, we can help by assessing your IT environment, including the size of your deployment, which VMware products you’re using, and if there’s any compelling event coming up, such as a renewal.

We can then address any concerns or challenges you might have around these changes, such as total cost of ownership, and recommend a path forward. We can present options for the short, medium and longer term, and whether porting licenses to Google Cloud could make sense in your situation. There may also be incentives we could tap into as a Google partner.

Want to consider your options or create a strategy to help navigate this uncertainty? Contact us at info@pythian.com.