VMware Faces Mass Exodus as 35% of Workloads Expected to Migrate by 2028
According to Gartner research VP Julia Palmer, VMware is on the brink of losing a significant chunk of business over the next three years, with a staggering 35% of its workloads expected to migrate elsewhere by 2028. This exodus is largely driven by Broadcom's acquisition and subsequent changes that have alienated customers, particularly small- to medium-sized businesses.
The shift in VMware's business model has been met with resistance from many organizations, who are now exploring alternative options due to increased costs and reduced channel partner options. The new subscription-based model, which replaced perpetual licenses, has been criticized for being too expensive for some businesses. Additionally, the bundling of products into fewer, more expensive SKUs (stock-keeping units) has made it difficult for customers to choose what they need.
The acquisition by Broadcom in November 2023 marked a significant turning point for VMware. The company's new leadership team implemented sweeping changes that aimed to streamline operations and increase revenue. However, these changes have come at the cost of alienating many customers who felt that their needs were no longer being met.
VMware's shift towards a subscription-based model has also affected hyperscalers like Amazon Web Services (AWS), which are now prohibited from reselling VMware subscriptions to cloud services users. This has prompted a mass migration of workloads to the public cloud, as businesses seek more flexible and cost-effective options.
Gartner research VP Julia Palmer noted that "the biggest concerns have been higher costs driven by a shift from perpetual licenses to subscriptions and the bundling of products into fewer, more expensive SKUs." She added that "a reduction in the number of channel partners that are allowed to resell VMware technologies has also made it difficult for customers to access the company's products."
The impact of this migration is expected to be felt across the industry, with many organizations exploring alternative virtualization solutions. As one industry expert noted, "VMware's loss is a gain for other companies in the market, such as Nutanix and Vmware's own competitors." However, it remains to be seen how VMware will respond to this challenge and whether the company can regain its footing in the market.
In conclusion, VMware's mass exodus of workloads is a significant development that has far-reaching implications for the industry. As businesses continue to explore alternative options, one thing is clear: the virtualization landscape is undergoing a major shift, and only time will tell how this will play out for VMware and its competitors.
This story was compiled from reports by Ars Technica UK and Ars Technica UK.
