We’re still seeing downstream effects over six months after Broadcom completed its $61B acquisition of VMware. The announcement and eventual close of the deal sent shockwaves throughout the cloud computing and virtualization spaces, forcing many business leaders to reconsider their cloud computing strategy.

In previous articles, we covered the many concerns VMware customers should have in the short term and the strategic case for migrating VMware virtual machines to AWS. In this article, we highlight real-world examples of how the acquisition squeezes companies in various industries and forces quick decisions with huge implications for the IT organization. If there was ever a time to execute a VMware to AWS migration, this is it.

Substantial Cost Increases

One of the biggest consequences of the Broadcom VMware acquisition has been the sudden hike in prices for VMware virtual machines. Broadcom swapped VMware’s points-based licensing model for a White Label program in the name of simplification. However, for many existing VMWare customers, this change has led to significant projected cost increases.

For instance, Computershare CTO Kevin O’Connor reported that he was quoted a future price in the realm of 10-15x what the company was paying for a VMware hypervisor under the pre-acquisition contract. As a result, he decided to migrate 24k VMware virtual machines to Nutanix, a huge win for the competitor, before re-upping the deal. The decision will supposedly break even with “single-digit months” and result in much lower IT operating costs overall.

What this reveals is that IT leaders are open to making major changes to longtime tech stacks, and they’re finding cost-effective alternative options. Whereas a VMware migration may not have made sense previously, it’s now a worthwhile investment for many groups given the higher licensing costs under the new Broadcom regime.

Sudden Discount Cuts

Broadcom has also reportedly cut discount programs that enable many non-profit organizations to afford VMware virtual machines in their IT infrastructure. For some, news of these cuts and subsequent pricing updates came shortly before renewal dates, forcing leaders to opt into expensive arrangements while exploring other options.

For example, the London Grid for Learning (LGfL) received a quote 268% higher than the current contract with only six weeks to go before renewal. The new quote was also for a subscription-based license because Broadcom chose to cut VMware’s perpetual license model. To avoid the sudden discontinuation of IT services to thousands of classrooms across England, LGfl had to maintain at least a 1-year annual maintenance deal, which was still 125% the cost of the organization’s previous 3-year deal for VMware software.

LGfl is one of countless organizations that has found itself scrambling for answers. Although the organization was able to access quality IT infrastructure over the past several years, it’s now experiencing the downsides of relying heavily on one service provider with a rigid contract.

This situation illuminates why pay-as-you-go pricing from AWS is such an advantage. Organizations in every industry can start and stop their virtual machines with little consequence, only paying for resources consumed. We expect to see more VMware live migrations and VMware cold migrations for the sake of unlocking pricing flexibility.

Fewer Products + Low Cloud Portability

Broadcom has also slashed VMware’s product suite, funneling customers into a few main product categories or pushing them to seek tailored solutions elsewhere. What’s more, concerns have circulated regarding the future of VMware Cloud on AWS. Broadcom is no longer allowing AWS or AWS channel partners to resell VMware Cloud on AWS. Furthermore, existing perpetual licenses cannot be ported to the cloud, leaving some teams to question their previous migration plans.

Change is always uncomfortable. Yet, the Broadcom VMware acquisition has introduced tremendous uncertainty and distrust into the equation for customers. Whereas the AWS cloud solution set is continually expanding, Broadcom has reorganized VMware products down to a handful of divisions and seems to be putting up walls between itself and channel partners.

Given this volatility, an AWS VMware migration is more compelling than ever, and ClearScale is here to help. Whether it’s an on-premises to AWS migration or a virtual machine migration from another host to AWS, we can get you up and running in the most secure, flexible, and cost-effective cloud platform in the market.

Rise Above VMware Volatility with ClearScale and AWS

We offer two primary migration services for VMware customers: transition from VMware Cloud (VMC) to AWS Native Services or execute a larger migration project from on-premises or another cloud provider to AWS. As an AWS Premier Tier Services Partner with more than a decade of experience on AWS, we know how to guide enterprises through highly complex IT transitions involving thousands of virtual machines, applications, databases, and workloads. Our cloud experts have earned more than 100+ AWS technical certifications, and ClearScale earned the AWS Migration competency, demonstrating our experience in delivering tangible value through migration projects.

We’ve arrived at an inflection point in the cloud computing and virtualization space. The Broadcom acquisition of market share giant VMware has shaken up IT infrastructure plans for organizations worldwide. Rather than sit back and give up control, an AWS VM migration returns power to the customer without sacrificing cost, security, or performance.

Get the Free eBook
A Strategic Guide to Your VMware Transition to the Cloud

To learn more about how ClearScale can help you find a better answer for your virtual machines on the AWS cloud, schedule a call with us today.

Call us at 1-800-591-0442
Send us an email at sales@clearscale.com
Fill out a Contact Form
Read our Customer Case Studies