VMware customers may stay, but Broadcom could face backlash “for years to come”

After acquiring VMware, Broadcom swiftly enacted widespread changes that resulted in strong public backlash. A new survey of 300 director-level IT workers at companies that are customers of North American VMware provides insight into the customer reaction to Broadcom’s overhaul.

The survey released Thursday doesn’t provide feedback from every VMware customer, but it’s the first time we’ve seen responses from IT decision-makers working for companies paying for VMware products. It echos concerns expressed at the announcement of some of Broadcom’s more controversial changes to VMware, like the end of perpetual licenses and growing costs.

CloudBolt Software commissioned Wakefield Research, a market research agency, to run the study from May 9 through May 23. The “CloudBolt Industry Insights Reality Report: VMware Acquisition Aftermath” includes responses from workers at 150 companies with fewer than 1,000 workers and 150 companies with more than 1,000 workers. Survey respondents were invited via email and took the survey online, with the report authors writing that results are subject to sampling variation of ±5.7 percentage points at a 95 percent confidence level.

Notably, Amazon Web Services (AWS) commissioned the report in partnership with CloudBolt. AWS’s partnership with VMware hit a road bump last month when Broadcom stopped allowing AWS to resell the VMware Cloud on AWS offering—a move that AWS said “disappointed it.” Kyle Campos, CloudBolt CTPO, told Ars Technica that the full extent to which AWS was involved in this report was helping underwrite the cost of research. But you can see why AWS would have interest in customer dissatisfaction with VMware.

Widespread worry

Every person surveyed said that they expect VMware prices to rise under Broadcom. In a March “User Group Town Hall,” attendees complained about “price rises of 500 and 600 percent,” according to The Register. We heard in February from ServeTheHome that “smaller” cloud service providers were claiming to see costs grow tenfold. In this week’s survey, 73 percent of respondents said they expect VMware prices to more than double. Twelve percent of respondents expect a price hike of 301 to 500 percent. Only 1 percent anticipate price hikes of 501 to 1,000 percent.

“At this juncture post-acquisition, most larger enterprises seem to have a clear understanding of how their next procurement cycle with Broadcom will be impacted from a pricing and packaging standpoint,” the report noted.

Further, 95 percent of survey respondents said they view Broadcom buying VMware as disruptive to their IT strategy, with 46 percent considering it extremely or very disruptive.

Widespread concerns about cost and IT strategy help explain why 99 percent of the 300 respondents said they are concerned about Broadcom owning VMware, with 46 percent being “very concerned” and 30 percent “extremely concerned.”

Broadcom didn’t respond to Ars’ request for comment.

Not jumping ship yet

Despite widespread anxiety over Broadcom’s VMware, most of the respondents said they will likely stay with VMware either partially (43 percent of respondents) or fully (40 percent). A smaller percentage of respondents said they would move more workloads to the public cloud (38 percent) or a different hypervisor (34 percent) or move entirely to the public cloud (33 percent). This is with 69 percent of respondents having at least one contract expiring with VMware within the next 12 months.

Many companies have already migrated easy-to-move workloads to the public cloud, CloudBolt’s Campos said in a statement. For many firms surveyed, what’s left in the data center “is a mixture of workloads requiring significant modernization or compliance bound to the data center,” including infrastructure components that have been in place for decades. Campos noted that many mission-critical workloads remain in the data center, and moving them is “daunting with unclear ROI.”

“The emotional shock has started to metabolize inside of the Broadcom customer base, but it’s metabolized in the form of strong commitment to mitigating the negative impacts of the Broadcom VMware acquisition,” Campos told Ars Technica.

Resistance to ditching VMware reflects how “embedded” VMware is within customer infrastructures, the CloudBolt exec told Ars, adding:

In many cases, the teams responsible for purchasing, implementing, and operating VMware have never even considered an alternative prior to this acquisition; it’s the only operating reality they know and they are used to buying out of this problem.

Top reasons cited for considering abandoning VMware partially or totally were uncertainty about Broadcom’s plans, concerns about support quality under Broadcom, and changes to relationships with channel partners (each named by 36 percent of respondents).

Following closely was the shift to subscription licensing (34 percent), expected price bumps (33 percent), and personal negative experiences with Broadcom (33 percent). Broadcom’s history with big buys like Symantec and CA Technologies also has 32 percent of people surveyed considering leaving VMware.

Although many firms seem to be weighing their options before potentially leaving VMware, Campos warned that Broadcom could see backlash continue “for months and even years to come,” considering the areas of concern cited in the survey and how all VMware offerings are near-equal candidates for eventual nixing.

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