VMware Cloud Foundation Could Bring Price Relief

Broadcom’s VMware VCloud Foundation, released ahead of VMware Explore Barcelona recently, could address customers who saw price spikes following VMware’s merger with Broadcom. It will be interesting to see how this impacts smaller customers who were particularly strained by the new pricing model.

For customers who have adopted HCI for running VMs and containers, Broadcom says it is increasing the amount of vSAN capacity included in VMware vSphere Foundation by 2.5 times to 250 GiB per core. For compute virtualization customers, VMware vSphere Enterprise Plus and VMware vSphere Standard are available for those who do not necessarily need some of the enterprise features. The entire VCF portfolio is available to all end-user customers through Broadcom’s distribution channel or directly from Broadcom.

In a release, Broadcom described these new flexibility options as a way to improve customer choice and provide “flexible subscription length, price and payment flexibility within our per-core subscription model, highlighting Broadcom’s commitment to our customers.”

“Before discussing new innovations, it’s worth noting how we continue to listen to our customers and partners to ensure VMware Cloud Foundation remains flexible and valuable for organizations of all sizes and at all stages of cloud transformation,” Prashanth Shenoy, vice president of marketing, cloud platform, infrastructure and solutions for Broadcom’s VMware, said during a prelaunch briefing. “When VMware joined Broadcom, we simplified our offerings to center on a private cloud option within VMware Cloud Foundation. This serves as our main marketing platform, while vSphere Foundation and vSphere Standard are available for those seeking compute virtualization alone.”

Good Enough?

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VMware’s new licensing model, introduced earlier this year, involved revamping its services, and resulted in some organizations — typically smaller customers — paying much more than they did in the past. However, VMware executives say these customers are getting much more in return. While Broadcom and VMware executives are not saying this explicitly, it can be inferred that the market share VMware is losing is not necessarily the “lunch” that Broadcom wants.

At issue is how the business model for VMware products recently changed from that of a perpetual license-driven company to a subscription-based company. Under the terms of this new model, which customers enter into, Broadcom has communicated that offerings are available as subscriptions or term licenses, in effect since December. The VMware Cloud Foundation has since featured either an enterprise hybrid cloud solution or the VMware vSphere Foundation, which the company describes as a simpler enterprise workload platform for midsized to smaller customers.

Some customers have described the price increases in stark terms. At the University of Canberra, there has been considerable talk among IT directors in academia in Australia about VMware’s price increases, according to Justin Mason, associate director, vendor and operations, at the University of Canberra in Australia, who previously spoke with The New Stack. The University of Canberra switched to Nutanix’s hypervisor a few years ago, so his team was “fortunate enough not to have to worry.” However, for other Australian universities with existing VMware setups, there is concern, Mason said. “They are saying, ‘We’re getting stuck with possibly 300% to 1,000% price increases in the last year,’” Mason said. “Some organizations just don’t have the budget to handle that.”

VMware wants customers to fully buy into its private cloud paradigm and therefore focuses on “getting them to adopt the entire portfolio, including vSAN,” said Torsten Volk, an analyst at TechTarget’s Enterprise Strategy Group. “This will certainly not appease customers that are just not interested in vSAN and just want their vSphere bills lowered,” Volk said. “I doubt that VMware will sway many customer accounts toward giving vSAN a shot by forcing them to adopt it so that they can continue to cost effectively operate their vSphere environments. At the end of the day, Broadcom is interested in platform customers and willing to live with losing most of the others.”

Shenoy noted the shifts in VMware’s business model as it moved towards a subscription approach. This cloud revamp transformed “our portfolio as we pivot to a platform-based private cloud delivery model, and a route-to-market transformation, simplifying and standardizing to offer a consistent experience for our customers,” Shenoy said. “Regardless of how they obtain the VCF product or where they deploy and manage it — whether on premises, at the edge, with cloud service providers or through hyperscalers — customers will experience streamlined deployment and management,” Shenoy added. “This rapid pace of innovation spans technology, platform, services and route-to-market, all aimed at building a private cloud platform that serves two key customer groups.”

VCF was also designed to offer two advanced services, called Container App Services and Data Services. Both of these services are powered by VMware Council, as applications and data are closely integrated. Ultimately, Broadcom’s goal with these services is to create business applications that drive operational success, and VMware Council provides the tools to achieve this.

“First, we focus on cloud operators and administrators responsible for building, deploying and managing private cloud environments for IT organizations,” Shenoy said. “VCF serves this group by delivering a unified platform that encompasses software-defined compute, storage and networking with automated operations.”

VMware Cloud Foundation’s (VCF) new configuration was eagerly awaited. There have been many questions about what VCF would look like exactly and, more importantly, what it would mean for DevOps customers now that VCF is under the Broadcom umbrella. While there has been a lot of discussion about price increases for some customers following licensing changes and other attributes of VMware honing its product portfolio under Broadcom, we have now seen, during the past few days, releases detailing what VCF now means, what it has to offer and what is planned for the future.