Broadcom loses another big VMware customer

Original Article ↗ Hacker News Discussion ↗

Broadcom’s VMware Price Hikes and Strategy

  • Multiple commenters report 10x (or ~1050%) license increases, citing examples including a large telco.
  • Many see this as deliberate “value extraction” and a classic enterprise-software squeeze, not a sustainable growth strategy.
  • Broadcom is widely believed to be prioritizing its top few hundred / top 5–10% of customers and implicitly telling the rest to leave.
  • Some argue this can be rational in the short term (high-margin focus), others say it overshoots what the market will bear and cannibalizes the business.

Customer Reactions and Migration Efforts

  • Several organizations report refusing new contracts after 3x–10x renewals and starting major migration projects.
  • However, deeply entrenched VMware estates (20 years of tooling, skills, configs) make migration costly and slow, especially for large enterprises and governments.
  • Migration vendors (OpenStack, OpenShift, etc.) are said to be overwhelmed with demand, forcing many to keep paying VMware during transition.

Quality, Innovation, and Product Direction

  • Some say VMware core innovation largely stalled after ~2018 and that support quality has been poor for years.
  • Others emphasize VMware’s strengths: reliability, live migration (vMotion), HA, broad OS support, and “on‑prem AWS”-like management at scale.
  • Workstation/Fusion becoming free is interpreted as de‑prioritization; some expect minimal future development.

Alternatives to VMware

  • Mentioned options: KVM + libvirt/Cockpit, OpenNebula, Apache CloudStack, OpenStack, OpenShift, Nutanix, Proxmox, Microsoft’s stack, cloud IaaS.
  • No clear commercial “winner”: each has tradeoffs in complexity, hardware support, cost, and enterprise readiness.
  • Some argue that for many workloads, open-source virtualization plus a few more engineers is cheaper than VMware even before the hikes.

Cloud vs On‑Prem and Lock‑In

  • Debate over cloud economics: some see cloud as “staggeringly expensive” versus colo/own servers; others stress that large firms value speed, flexibility, and reduced staffing burden.
  • Egress costs and vendor lock‑in (VMware, clouds, others) are recurring worries.
  • Several suggest a future “reshoring” toward hybrid models: stable enterprise workloads on‑prem, elastic workloads in public cloud, with more emphasis on open-source stacks to avoid being squeezed again.

Corporate Incentives Debate

  • Long subthread on whether firms should or do maximize short-term extraction vs long-term value.
  • Some see Broadcom’s move as a textbook outcome of shareholder primacy; others note it may destroy long-term franchise value even if it boosts near-term numbers.