Survey of VMware customers: More than half are considering switching

Broadcom's comprehensive restructuring of the VMware portfolio has many users thinking about switching, according to a survey by cloud provider Civo. According to the survey, 51.9 percent of respondents would consider leaving VMware. 48.7 percent had already taken the step of actively looking for alternatives for their cloud services.

Civo states that it has noticed a strong interest in open source systems among those surveyed. 44.9 percent would consider migrating to open source. At the same time, however, 28.6 percent expressed concerns about the security of open source and 23.2 percent about the lack of support and service level agreements (SLA). The new providers should above all offer flexibility as well as fair and transparent pricing, according to the Civo press release. According to Civo, 1000 VMware customers were surveyed.

Civo has heard from many concerned VMware customers over the past nine months, explained Henry Godwin, who works as a manager in the cloud provider's sales division. "At the end of the day, companies want security. They can no longer accept skyrocketing prices without improving service at the same time," Godwin explained.

Prices increased tenfold in some cases

A survey published by Civo in July revealed that many VMware customers were particularly concerned about the sharp rise in prices. At that time, more than two thirds (70 percent) had expected higher prices. For 48 percent, this expectation had already become reality: They would have to pay more than before the VMware takeover for access to the same features.

And the price increases were hefty: 48 percent of those affected by the increase reported a doubling of costs, 30 percent a quadrupling and 15 percent even a tenfold increase. In addition, there were also operational problems following the Broadcom restructuring: 45 percent said they were no longer able to operate with the same flexibility. Civo boss Mark Boost saw the results as proof that the takeover by Broadcom had not done VMware customers any good.

At the request of the iX editorial team, Civo was unable to provide any further information on whether the license changes affect large and small companies differently. In January, Broadcom began a rigid restructuring of the VMware product portfolio and partner program and trimmed everything to subscription models, which alienated numerous partners and customers and caused frustration. Broadcom's license strategy seemed to be aimed primarily at retaining large customers, while smaller customers such as system houses were given the cold shoulder.

It was worth it for Broadcom

Unsurprisingly, Broadcom boss Hock Tan has a very different view of the situation at VMware. "The transformation of VMware continues to progress very well," said Tan earlier this week when presenting Broadcom's figures for the third quarter of fiscal year 2024. VMware is probably also a growth driver for the company: Including VMware, revenue rose by 47 percent to USD 13.1 billion – Without VMware, revenue would only have increased by 4 percent. Apart from this, Tan announced in the earnings call that bookings at VMware were continuing to accelerate and that the virtualization company had succeeded in reducing its quarterly expenditure rate to 1.3 billion US dollars as planned.

As The Register writes, Broadcom's VMware division also outperformed the same quarter of the previous year, when VMware was still operating independently and recorded sales of USD 3.4 billion, with sales of USD 3.8 billion. Compared to the previous second quarter of 2024, i.e. already under Broadcom's aegis, VMware has also increased its revenue, which amounted to 2.7 billion US dollars.

(axk)