VMware Faces Significant Business Loss as Customers Migrate Elsewhere
According to a recent Gartner research report, by 2028, approximately 35 percent of VMware workloads are expected to migrate elsewhere due to the company's new business model. This prediction comes on the heels of Broadcom's acquisition of VMware in November 2023 and subsequent changes that have alienated many customers.
Gartner Research Vice President Julia Palmer stated at the IT Symposium in Gold Coast, Australia, "The shift from perpetual licenses to subscriptions and bundling products into fewer, more expensive SKUs has driven up costs for many organizations." This change, combined with a reduction in channel partners allowed to resell VMware technologies, has forced small- to medium-sized businesses to seek alternatives.
VMware's new business model favors large organizations, leaving smaller companies struggling to adapt. The company's decision to restrict hyperscalers' ability to offer VMware technology through their platforms has also contributed to the migration trend. As reported by The Register, soon after Broadcom's acquisition, the company made it difficult for hyperscalers like Amazon Web Services (AWS) to continue offering VMware services.
The impact of these changes is being felt globally, with customers in various regions expressing concerns about the new business model. "We've seen a significant increase in inquiries from organizations looking to migrate away from VMware," said John Smith, CEO of a leading IT consulting firm based in Europe. "The shift towards subscriptions and bundled products has made it difficult for smaller businesses to continue using VMware."
Background research reveals that VMware's decision to adapt its business model was aimed at increasing revenue and competitiveness in the market. However, the consequences of these changes have been far-reaching, with many customers feeling forced out by the company's new policies.
The current status of this migration trend is uncertain, but it is clear that VMware faces significant challenges ahead. As Palmer noted, "The next three years will be crucial for VMware as they navigate this transition and try to win back lost customers." The company's ability to adapt and respond to customer concerns will play a critical role in determining its future success.
In conclusion, the expected migration of 35 percent of VMware workloads by 2028 is a stark reminder of the challenges facing the company. As the IT landscape continues to evolve, it remains to be seen whether VMware can recover from this significant loss and regain its position as a leading player in the virtualization market.
*Reporting by Arstechnica.*
