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Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
- nubinetwork 3y agoFWIW, at $dayjob we switched from VMware to nutanix a couple years ago. I guess we got out at the right time...
- albert_e 3y agoIs AWS Workspaces and similar offerings on Azure a direct replacement for some of these VDI workloads
- gmerc 3y agoIf only they’re were other hypervisors
- fifteen1506 3y agoThe market at work, why the rage? They paid, didn't they?
- offices 3y agoRage where?
- thriftwy 3y agoThat does sound line a Unity moment. I wonder if the execs really learn nothing, or they enjoy conjuring competition out of thin air.
- Ekaros 3y agoOr has someone done some really weird math on this... First drive the prices up, exploits as much money as you can from whatever customers stick with you and then after those left, write off the entire thing somehow...
- nodeman7 3y agoCant wait to watch VMware die a slow death
- vardump 3y agoThere are people who have put their blood, sweat and tears into it. Never a good thing when something dies.
- danpalmer 3y agoIs there that much negativity towards VMWare? I got the impression they were generally liked by users? Still enterprise software, but good stuff, and not awful about their licencing like some other companies?
- rfoo 3y agoUntil they were acquired by BRCM. Then oh well, you know, typical BRCM behaviors awaits.
- danpalmer 3y agoYeah I've heard horror stories about them. It was the VMWare bit specifically that surprised me though!
- what-the-grump 3y agoNot really. On the smaller scale there was no reason outside of familiarity to run VMware over hyper-v. This will be a shift for on-prem deployments. For cloud solutions running VMware in AWS/Azure, unless those renewals go up significantly, most of VMwares mrr is already locked in and the people running these setups generally refuse to learn how the cloud works so it’s a pure lift and shift mentality. But the pattern begins, broadcom buys VMware does nothing increase prices. Why would any sane client stay around to get VC squeezed.
- boring-alterego 3y agoOn prem deployments at my sites swapping to hyper v prior to renewal with VMware. We saw the writing on the wall after what broadcom did to us when they bought Symantec.
- chgs 3y agoYou choose proprietary and you get screwed. I can’t wait for the AWS sob stories.
- politelemon 3y agoAws pricing is listed though, you know what you're being charged. VMware is conversation based though isn't it.
- chgs 3y agoMy company pays less than 1/10th list for aws But even if it wasn’t, aws could add a zero to the end of their prices next year and a lot of companies will not be able to migrate
- bcaxis 3y agoAll the pricing is subject to change. When market conditions change significantly you can see massive degradation of the business somewhere. VMware shake down could certainly affect the cloud market significantly.
- hnthrowaway0328 3y agoI guess no way there are going to pay that many. Maybe a huge discount and they are looking for a way out in a year or so?
- alimbada 3y agoThey paid: https://twitter.com/cioontherun/status/1761882689886433742 https://twitter.com/cioontherun/status/1761882689886433742
- hnthrowaway0328 3y agoThis is extortion...
- alephnerd 3y agoThis is basically a polite way to fire a customer. You don't want to sell to everyone - you need to make sure the cost of retention+support is significantly less than what they are paying. If a customer is too troublesome or spending too little (for a company like VMWare, a $8m contract is on the smaller end) this is the politest way to fire them. It sounds like this customer is a legal firm, which makes sense - they tend to have a much smaller IT footprint. Every dollar isn't the same. Edit: to elaborate - it's all about margins. Is that $8m worth it if in aggregate you spending an equal amount of time on that account as you are on a $20-30m account? It ain't
- biorach 3y ago$8m doesn't cover retention (what retention?) and support? Not sure that makes sense.
- alephnerd 3y agoAbsolutely. When you reach VMWare size ($13.5 BILLION in revenue in FY 23), $8M is chump change. The margins on support might not make sense. With the level of revenue VMWare had, it's realistic to assume mean deal size is in the 8-9 digit range. > what retention TAMs, CSMs, constant PFRs, constant escalations, etc
- jraph 3y agoI don't understand. I can understand VMWare doesn't want to keep doing this, but with $8M, assuming a 100k annual salary, you can dedicate 80 full time employees to this customer yearly. I understand 8M is nothing next to 13.5B, but that can't be unprofitable, can it? Or the contract is too low.
- alephnerd 3y agoThere are several flaws with your assumptions 1. "assuming a 100k annual salary" - the cost of salary is 1.75x stated wage, so in reality it's $175k 2. "you can dedicate 80 full time employees to this customer yearly" - you mean you need almost a hundred bodies per customers?!? In fact, this is a major reason to fire a customer. It means they are demanding and trying to outsource their entire org to you. Either pay up or piss off. > that can't be unprofitable, can it Nope. > Or the contract is too low. Exactly.
- amelius 3y agoHow much would it cost to build VMware from scratch?
- RedShift1 3y agoYou can absolutely build it for 100M $.
- moondev 3y agoYou can't really "build" VMware though. It's a proprietary hypervisor and ecosystem of interoperable products with tons of hardware vendor drivers. Building on KVM or even a new hypervisor would not get you 'VMware"
- RedShift1 3y agoFor 100M $ you can buy Proxmox, start advertising, scoop up all the lower end VMware customers and fill in the feature gaps according to customer demand over time.
- vardump 3y agoCan Proxmox do things like vMotion?
- RedShift1 3y agoYes
- xav0989 3y agoIt has a live migration feature so I’m going to go with yes.
- Nullabillity 3y agohttps://libvirt.org/migration.html https://libvirt.org/migration.html Though I would argue that relying on cooperative/live migration in the first place is a mistake.
- jve 3y agoAnd who can confirm this random guy on twitter? The followup tweet doesn't seem serious: https://twitter.com/cioontherun/status/1760862002941927622 https://twitter.com/cioontherun/status/1760862002941927622 > Just emailed the CEO of Broadcom and got his OoO: “Thank you for your email. The exorbitant price increases are due to inflation and macroeconomic conditions. Also, the taxes on my mansion in Cabo are sky high!” Not that VMWare customers aren't faced with challenging circumstances...
- rwmj 3y agoI get that this is a deliberate strategy by Broadcom, but can someone explain how the strategy makes any sense? Broadcom apparently spent $69 billion to acquire VMware, so how does setting it on fire make sense financially?
- alephnerd 3y ago$8m is chump change in the Enterprise SaaS/cybersecurity industry. AV or Endpoint spend at a F1000 is around that much alone. A backbone vendor like VMWare can and does charge 4-6x more ime.
- d1sxeyes 3y agoSo if you have a customer (A) whose current business is worth $80M to you, and you have a customer (B) whose business is worth $8M to you, you might look to consolidate some of your operations to try to get $88M of value out of customer A with less expenditure than you need to lay out to get the $8M from customer B.
- pxeger1 3y agoHow many $8m customers did VMware have? I reckon it’s not far from 690.
- egberts1 3y agoCalled it ... 89 days ago. https://news.ycombinator.com/item?id=38483309 https://news.ycombinator.com/item?id=38483309
- panick21_ 3y agoDoes VMWare software do much more then VM handling? Is there something extra they provide to make it worth paying that much? I have only ever worked a little with the free product. Also, what are the alternatives proprietary and open? And what are those solutions missing? Hopefully this is good news for the open project, getting more commercial support and more users. Also sounds like good news for people like Oxide. If costumers are already considering leaving VMWare and need to do a lot of software changes, they might be willing to make a larger step for new hardware as well.
- rwmj 3y agoDepends what you mean by "more than VM handling". VMware handles everything you could possibly think to do with VMs and many you probably never thought about. For example: Scripted live migration. Single click to deploy a test network of VMs. Virtual desktops. Wrap up a VM in a single file that can be "played" remotely. Scan all your VMs for vulnerabilities. Beyond VMs they attempted to branch out into containers with a version of Kubernetes (VMware Tanzu) which I believe didn't get many sales. The competition are roughly: - All the cloud providers - oVirt (formerly Red Hat's RHV, probably the closest thing to vSphere in terms of UI and deployment) - Kubenetes + Kubevirt - Openstack, probably - Virtuozzo - Virtual Box - Proxmox - Nutanix - Single node installations using things like virt-install - Rolling your own management on top of KVM or Xen (surprisingly popular but I wouldn't recommend it myself)
- brador 3y agoWhat’s the word he alludes to in the tweet?
- aimonster2 3y agoThis makes me terrified to use Broadcom owned products going forward.
- ashildr 3y agoInteresting bet. From now on no one in their right mind will BEGIN using VMware. Whatever new companies will be founded, none of them will choose VMware, neither will growing companies switch to VMware.
- roynasser 3y agoI'm curious to know how many Startups were going with VMware... honest curiosity... VMware isnt really "startupy"
- nojvek 3y agoNot quite VMware but we switched from Algolia to Typesense. Algolia overage charges are a fortune. If we kept on going we’d be burning an equivalent software engineer worth of salary. Now we give equivalent sum to a real human.