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Broadcom loses another big VMware customer

(www.theregister.com)
146 points belter | 2 comments | 03 Dec 24 16:44 UTC | HN request time: 0.407s | source
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bityard ◴[03 Dec 24 17:35 UTC] No.42308773[source]▶
They are not the only ones. The company I work for uses a LOT of VMware. Mind you, VMWare has ALWAYS been expensive. To the point that in a lot of cases, you can end up spending more on VMWare than the hardware that runs it. I long ago crunched the numbers and came to the conclusion that unless your workload really does require the kind of exceptional storage, networking, and HA integration that VMware (claims to) provide, you are better off using an open source solution for your VM infra and hiring a couple of extra engineers to manage it.

When it was time for our contract to renew a few months back, our licensing and support quote was 3x the previous year and Broadcom would not budge, even a little. They said take it or leave it. Well, we left it.

There is a big internal effort now to get us off of VMware and onto Kubernetes and OpenShift. Our whole fleet of VMware is still running but we're on borrowed time as we're on our own if any major technical issue comes up.

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SSLy ◴[03 Dec 24 17:49 UTC] No.42308935[source]▶
OpenShift costs as much as post hike VMware
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gamblor956 ◴[03 Dec 24 18:05 UTC] No.42309133[source]▶
Not necessarily. Red Hat negotiates prices with customers. If your company is paying as much for OpenShift as they would/were for VMware, they need to hire better negotiators.
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belfalas ◴[03 Dec 24 18:18 UTC] No.42309321[source]▶
Hmm no. My $dayjob got quoted a nice price only for them to rug pull later. Also it’s not Red Hat anymore, it’s IBM.
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gamblor956 ◴[03 Dec 24 23:18 UTC] No.42312786[source]▶
That's how negotiations work. Vendor makes an offer based on their understanding of your company's needs (usually based on an RFP or initial discussion), your company pushes back on price (if its needs are met) or indicates that it has greater needs and vendors revises the offerings and ups the price. Sometimes they offer a low price to get a potential customer to bite but if they don't accept immediately they withdraw the price because that customer is going to be the kind that demands/needs extra hand-holding. (My current $dayjob does that. If a customer isn't sophisticated enough to take a good price when they're offered it, it means they're going to require a fair amount of extra work so we withdraw the price and the next offer will be significantly higher.)

Also...it's still Red Hat. They're owned by IBM but they're still allowed to operate independently.

But back to the original point: you shouldn't be paying as much for OpenShift as you were for the equivalent VMWare offering. We used OpenShift at my last job and VMWare at the one before it; OpenShift was cheaper than VMWare was before the Broadcom acquisition.

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1. belfalas ◴[04 Dec 24 16:50 UTC] No.42319326[source]▶
You're leaving out bending the customer over the barrel come renewal time once services are migrated and there's lock-in.

And sorry bud, but the whole "operating independently" thing...I don't buy it. I've worked for too many companies that were owned by someone else and purported to operate independently. It's just a flat-out lie.

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2. gamblor956 ◴[05 Dec 24 00:16 UTC] No.42323492[source]▶
I've worked for too many companies that were owned by someone else and purported to operate independently. It's just a flat-out lie.

I don't doubt it, given that this has been Broadcom's MO from the beginning. But IBM is not Broadcom, and while they've definitely messed things up, they've recognized the value in letting Red Hat remain independent.

You're leaving out bending the customer over the barrel come renewal time once services are migrated and there's lock-in.

This is easily resolved by negotiating a longer contract, and planning for alternative vendors prior to the expiration of said contract. The amount of the potential increase at renewal is capped at the cost of switching (see, for example...all the VMWare customers switching off VMWare because its significantly cheaper to take the one-time switching costs than to pay 1000x every year).

This is all part of basic Negotiating 101. It sounds like your company isn't any good at it, and they could save a lot of money by getting better negotiators. (Now you know why Legal gets paid $$$ to play solitaire most of the day.)