Broadcom loses another big VMware customer

Original Article ↗ Hacker News Discussion ↗

Broadcom’s acquisition of VMware and subsequent price hikes—often reported around 10x for some customers—are prompting enterprises to reassess long‑standing reliance on VMware’s virtualization stack. Commenters describe VMware as highly capable but stagnant and increasingly expensive, with support quality in decline, and many organizations now exploring alternatives such as KVM-based platforms, OpenStack/OpenNebula, OpenShift, and public cloud despite significant migration costs and lock‑in. The broader concern is that aggressive “value extraction” from entrenched infrastructure software will push companies toward open source and more portable architectures to avoid future dependence on a single vendor.

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.