Source URL: https://www.theregister.com/2024/11/22/broadcom_vmware_acquisition_first_anniversary/
Source: The Register
Title: A year after Broadcom took control of VMware, it’s in the box seat
Feedly Summary: Customers are ‘all miserable’ – but not yet deciding to bail
Analysis Broadcom completed its acquisition of VMware one year ago, on November 22, 2023. Has it been a success?…
AI Summary and Description: Yes
Summary: This text analyzes the implications of Broadcom’s acquisition of VMware, emphasizing customer dissatisfaction stemming from cost increases and service disruptions. While Broadcom claims financial success and improved authority in cloud services, experts predict potential migrations to rival options by disgruntled VMware users. The acquisition’s impact on innovation and security is also scrutinized, highlighting the need for Broadcom to regain user trust.
Detailed Description:
The acquisition of VMware by Broadcom has raised numerous questions regarding its success and impact on customers. Here are the critical takeaways from the analysis:
– **Financial Performance**:
– Broadcom reports rising revenue from VMware, attributing it to their new pricing model, which includes per-core subscriptions bundled with support services.
– Despite overall increases in costs for customers due to new models, Broadcom claims that the ROI justifies the price hikes over time.
– **Customer Sentiment**:
– Research suggests mixed reactions; while Broadcom sees some positive signs, many VMware customers are unhappy due to substantial licensing cost increases, reported to be between 200% to 500%.
– Gartner’s analyst Michael Warrilow points out that customers feel abandoned as support teams have faced downsizing, leading to frustration over access to help and license renewals.
– **Future Risks**:
– Customer dissatisfaction could lead to significant migrations to competitors, although such moves are currently not visible. Companies often plan procurement in cycles, possibly preparing to transition after their commitment periods.
– CIOs are cautious but may eventually seek alternatives if dissatisfaction continues.
– **Innovation and Development Issues**:
– Broadcom promised to increase R&D spending significantly, yet minimal new developments have been made since the acquisition.
– Upcoming releases aim to improve VMware’s capabilities, particularly in facilitating AI workload management, but timeframes for these updates are unclear, raising concerns about execution.
– **Security Concerns**:
– The text underscores significant security mishaps, specifically that a critical patch from Broadcom failed to rectify known vulnerabilities, leaving customers vulnerable—an area of major concern for security professionals.
– **Channel Relationships**:
– The shift in VMware’s business model has affected relationships with partners and resellers, complicating resale processes and profitability.
– There are indications that partners are already looking for alternatives due to Broadcom’s restrictive practices.
Overall, while Broadcom’s acquisition of VMware appears financially beneficial on paper, the rise in customer costs, security concerns, and the potential for losing customer loyalty to competing services collectively pose significant challenges to maintaining VMware’s standing in the market.