VMware Customers Eye Exit as Broadcom Strategy Fuels Cloud Migration
Gartner Symposium – A significant wave of VMware customers are actively planning to migrate away from the virtualization giant, with analysts predicting 35 percent of VMware workloads will be running on alternative platforms by 2028. The shift is largely attributed to changes in strategy following Broadcom’s acquisition of VMware, including a move towards subscription-based pricing and a perceived disinterest in partnering with hyperscalers.
During a recent Gartner event, industry expert Palmer asserted that Broadcom’s VMware and hyperscalers do not view each other as strategic partners. This tension became apparent when Broadcom disallowed Amazon Web Services (AWS) and its channel partners from reselling vmware Cloud on AWS. AWS expressed its disappointment with the decision in May 2024, according to a report from CRN.
Despite the fractured partnership, hyperscalers like AWS remain focused on engaging with VMware customers, anticipating eventual migration to native cloud services. “They know over time they will convert you to ‘proper cloud,'” Palmer stated.
Companies considering a move away from VMware face a challenging path.Migrations are frequently enough described as costly and time-consuming, notably for organizations with limited IT resources or ongoing major projects. Given the current lack of direct VMware competitors, Palmer recommends a phased approach, suggesting partial migrations can be completed within a year, while full migrations are likely to take at least three years.
“We are all addicted to hypervisors, and that needs to change,” Palmer emphasized, highlighting the need for organizations to re-evaluate their reliance on virtualization technology.
Despite customer attrition,VMware continues to be a significant revenue driver for Broadcom. The company’s focus on subscriptions, bundled offerings, and increased pricing has resulted in substantial growth. Broadcom’s most recent earnings report showed infrastructure software revenue – largely fueled by VMware – increased 25 percent year-over-year to $6.6 billion.
