300 percent price hikes push disgruntled VMware customers toward Broadcom rivals
Dean Colpitts, CTO at Canadian VMware customer and managed services provider Members IT Group, shared similar sentiments, adding that “Broadcom simply is not listening to what customers say they want or need” when it comes to VMware products and features, especially those related to small and medium-sized businesses.
VMware Enterprise Edition costs for Illinois’ Lake Land College rose 300 percent “with no additional features/benefits,” Director of Technical Services James Westendorf said via email. Lake Land has used VMware since 2008, but as a community college, its budget can only stretch so far, Westendorf explained:
Since we are a community college, we are responsible to the taxpayers to be good stewards of our funds and investments in technology… When there is a significant price increase, such as 300 percent, it becomes an issue that requires us to weigh the cost against the gains and seek alternative options.
When asked to comment on this story, a Broadcom representative declined to answer specific questions regarding VMware customers’ concerns. Instead, the company referred me to Broadcom CEO Hock Tan’s “recent blog posts,” which are available here.
More focus on large customers
On the other hand, large customers are more likely to be willing and able to stomach VMware price hikes. IT company Veeam, for example, saw prices for the VMware products it uses jump 300 percent, but “internal services are staying the course,” Rick Vanover, Veeam’s product strategy VP, told me.
Pricing and other changes have led some customers and partners to suspect that Broadcom prefers enterprise-sized customers for VMware. In January, Broadcom reportedly took approximately 2,000 of VMware’s biggest customers direct, cutting channel partners from the deals.
Nonprofit organizations, like hospitals and school districts, have been the clients most dramatically impacted by Broadcom’s changes to VMware, with smaller and mid-sized customers having a “high degree of difficulty” absorbing VMware’s new cost structure, Andrew Lerner, a distinguished VP analyst at Gartner, told me. He said it’s reasonable to expect enterprise-sized clients to represent a larger majority of VMware’s customer base moving forward.
