Since Broadcom’s acquisition of VMware last November, the company has been focused on helping its customers accelerate their digital transformation and position themselves for success. After reflecting on the first 100 days post-acquisition, Broadcom has decided to simplify and enhance its market strategy for VMware Cloud Foundation (VCF) in response to customer demands.
Simplification and Cost Reduction to Compete with Public Cloud
Broadcom has restructured its focus towards a true private cloud experience through VCF, which is now offered at half the previous list price, thus promoting greater adoption among customers. This strategy aims not only to increase competitiveness against public cloud, but also to simplify the product portfolio based on two key solutions: VCF and VMware vSphere Foundation (VVF). VCF integrates all computing, storage, networking, management, and support capabilities, while VVF offers enhanced capabilities for customers not yet ready to adopt a full-stack solution.
Changes in Customer Experience and Partner Ecosystem
One of the most significant changes is how Broadcom engages with cloud service providers. The company is standardizing pricing metrics across cloud service providers to use core-based licensing, consistent with end user licensing. This standardization makes it easier for customers to move workloads between different providers without facing additional costs for licensing changes.
Additionally, Broadcom is incorporating VMware’s partner ecosystem into its partner programs, which requires some adjustments but ensures that end customers have complete freedom to move their workloads from their data centers to cloud providers and between them.
Transition to a Subscription Model
Broadcom is also finalizing its transition plan to a subscription model that offers access to the latest version of VCF along with fixed-term support. This subscription model provides customers with the latest technology and the predictability needed to drive continuous innovation.
Impact on Sector Competition
Broadcom’s new VCF market strategy aims to intensify competition among cloud service providers, leading to greater value delivery to end customers. License portability of VCF is key to this strategy, with Google Cloud being the first hyperscaler to support VCF license portability, and other providers expected to follow suit.
Although many current VMware customers are seriously considering migrating to other solutions like Hyper-V, KVM, or Proxmox, Broadcom is committed to creating value within VMware’s partner ecosystem and resolving channel conflicts, incentivizing long-term product adoption and streamlining processes. All these efforts are designed to enhance customer experience, offer more choices and value, and ensure that VMware partners find new profitability opportunities.
This evolution in VCF’s go-to-market strategy shows that Broadcom is actively listening to and assisting its customers and partners, demonstrating a continuous commitment to innovation and solution simplification.