Broadcom’s Acquisition of VMware and Its Impact.

March 1 2024, by Tharindu Ruwanpathirana | Category: Cloud Services

Broadcom‘s recent acquisition of VMware marks a significant shift in the cloud and virtualization landscape. This strategic change will reshape the way Australian businesses access and leverage VMware products and services. Understanding these changes and how they affect your operations is crucial. 

Essential FAQs on VMware’s New Chapter under Broadcom.

Why the strategic shift by Broadcom? 

Broadcom’s acquisition of VMware is a strategic move designed to streamline VMware’s offerings, focusing on core products and services that support the needs of modern businesses, emphasizing security, reliability, and innovation. 

Broadcom have pivoted from 100s of SKUs to two foundational offerings. Moving forward, Broadcom will funnel all product and engineering focus into the VMWare Cloud Foundation (VCF) bundle.

As a result, Broadcom have revamped how they go to market, and changed the way they charge for products. That new pricing model impacts businesses globally and unilaterally. 

What are the most important changes for Australian businesses?

Australian businesses will encounter significant shifts in VMware’s product offerings and pricing models, including: 

  • Transition to Subscription-Based Licenses: All perpetual customers will need to move to new subscription-based licenses to maintain access to support and patching. 
  • CPU Core-Based Pricing: Licenses will now be charged per CPU core instead of per gig of VRAM, per month. This change will likely lead to material price increases without a strategic approach. 
  • Full VCF Stack Adoption: To gain the full benefits and most optimized pricing, adopting the full VCF stack is critical. 
  • Consolidated Partner Landscape: The number of VMware CSP partners in Australia is being significantly reduced, streamlining the partner ecosystem. 

What is VMware Cloud Foundation (VCF)?  

VMware Cloud Foundation (VCF) is a comprehensive software suite designed to deliver a unified SDDC (Software-Defined Data Center) platform. It integrates vSphere for computing, vSAN for storage, NSX for networking, and components of the Aria suite for operations management. VCF aims to simplify the deployment and management of cloud environments, enhancing scalability, security, and performance.  

What is the new pricing model?  

The new pricing model transitions from a vRAM-based billing to a physical core-based model. This model mandates a minimum commitment of 16 physical cores per socket, affecting how businesses are billed for VMware services. The change aims to provide a more straightforward and predictable cost structure, though it may require adjustments in infrastructure planning and optimization.  

What happens if I stay on my Perpetual license?  

Staying on a perpetual license means you will not transition to the new VCF subscription-based licenses, potentially losing access to vital support and patching when your maintenance contract (SNS) expires on Perpetual Licences Without these updates, your infrastructure may face increased security risks, lack of compatibility, and missing out on the latest features and efficiencies offered by the VCF suite. 

Have original equipment manufacturers (OEMs), been impacted by the Broadcom acquisition of VMware?

Yes, shortly after Broadcom’s acquisition of VMware, many OEM partnerships were terminated. This shift led to the immediate discontinuation of OEM licensing options.

Australian businesses accustomed to acquiring VMware software via OEMs bundled with hardware may face challenges due to terminated partnerships and discontinued licensing options.

Broadcom’s strategic shift focuses on streamlining offerings, emphasizing security, reliability, and innovation. This includes transitioning to VMware Cloud Foundation (VCF) as the primary product bundle, shifting to subscription-based licenses, and adopting CPU core-based pricing. 

VxRail by Dell Technologies remains fully available providing an option for VMware pricing consistency and support for Dell customers.

How do the changes impact MSPs previously included in the VMWare Cloud Services Partner Program? 

Effective April 30, 2024, the ability to transact as a VMware Cloud Services Provider, under the VMware Partner Connect Program, will come to an end. Only selected partners have already been invited to join the Broadcom Expert Advantage Partner Program. 

Preparing Your Business for Transition.

As a VMware by Broadcom Pinnacle Partner, Macquarie Cloud Services is ready to provide an assessment and free advice to businesses on how they can make the most of the transition.  
The assessment examines: 

  • Infrastructure Optimisation: Given Broadcom’s shift to metering based on physical cores. 
  • Licensing and Procurement: Navigating the new licensing models and procurement options. 
  • Evergreen Operations: Ensuring your operations remain up-to-date and efficient. 
  • Cost and Environmental Predictability: Managing costs effectively while considering environmental impacts. 
  • VCF Features: Exploring the full benefits of the VMware Cloud Foundation suite. 
  • Risk, Governance, and Compliance: Addressing new risks and compliance requirements in this changing landscape. 

Deep VMware Expertise at Macquarie Cloud Services.

With nearly two decades of partnership with VMware, Macquarie Cloud Services has deep expertise in hosting mission-critical workloads on our Launch private cloud. Our long history with VMware ensures we are uniquely positioned to support our customers through this transition.  

We understand that change, especially of this magnitude, can bring uncertainty. Our priority is to minimize disruption and maximize the benefits of these changes for our customers.  

We remain committed to our purpose of helping businesses who are over charged and under-served.

Get in touch.

Please get in touch and one of our cloud experts can provide advice on landing the most cost optimised and secure solution for your business.  

We look forward to working with our customers and Broadcom on this next chapter as we continue to deliver exceptional private and hybrid cloud outcomes backed by unparalleled support and customer service. 

Tharindu Ruwanpathirana

About the author.

Tharindu Ruwanpathirana (TR) is an experienced product manager who oversees the Macquarie Cloud Platform compute portfolio. TR's area of expertise lies in delivering excellence through managing and enhancing the existing Cloud Platform and developing products from concept to production. TR's well developed multi-disciplined skillset molded over 20-years has seen him as a System Engineer, Solution Architect and other leadership roles enabling him to identify the gaps and develop market relevant products for our customers.

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