> Steve McDowell, chief analyst at NAND research, told The Register that VMware by Broadcom is “laser focused on high-revenue, high-margin business” and has priced its wares “just below the pain threshold for customers they care about.”
If you hike your prices by 10-15x, you only need 6-10% of customers to stay to maintain your revenue, reduce costs and massively increase profit margins!
Also pretty much guarantees flight of your former customer base to close compliments - who then have improved revenue to bring their products closer in alignment to yours. You'd better have a hell of a moat to follow this strategy.
Tiny nitpick: complement means a good in an adjacent part of the supply chain (e.g. batteries and EVs are complements), you might have meant 'competitors'.
English is a living language so it's impossible to say definitively that you're "wrong" but I don't think anyone else is able to understand what you're trying to communicate through your use of this word.
According to the Cambridge dictionary, there are a couple of variants depending on your dialect:
- "to make something else seem better or more attractive when combining with it" - e.g. "Strawberries and cream complement each other perfectly."
- "to help make something or someone more complete or effective" - e.g. "She used photographs to complement the text of the news story.
"
The only way I can make any sense of your words is to assume you're trying to argue that two competing but interchangeable services "complement" each other when used simultaneously because that might allow a customer to mitigate risk in a similar fashion to a multi-cloud setup. That's a pretty big jump to make from what you've actually said though and would really need further explanation for anyone to understand.
This is interesting. In university, I was taught that a substitute product would be an alternative choice (eg. Nathan's hotdogs vs Ball park franks) and complimentary products were ones that typically "moved" together (eg. Nathan's hotdogs and ketchup). So not really opposite unless you are talking about price vs demand.
No, they are in fact opposed definitions if you dig in a bit.
Substitute goods have negatively correlated demand, while complementary ones have demand that positively correlate. A simple criterion, at least in theory. You will buy more ketchup when you buy more franks, but you will buy fewer hot dogs.
And it's also close enough to the MBA definition of complement (of "commoditize your complement" fame).
> Also pretty much guarantees flight of your former customer base to close compliments - who then have improved revenue to bring their products closer in alignment to yours.
Classic VM hosting is a dead end anyway. Customers are shifting to the hyperscalers wherever they can, if only to reduce the headcount of their IT departments due to acounting wizardry making it worth it for the stonk markets even if the cloud costs more in the end.
And then, there aren't that many alternatives to VMware, and none of them (bar OpenStack) as comprehensive.
As long as Broadcom manages to squeeze enough out of the large customers who are vendor-locked too hard over the next 3-5 years, it'll be worth the money for them, and chances are the gamble pays off, with a small trail of extremely large customers paying for a decade until they can get their internal chaos sorted out to migrate off.
Even with severe churn, VMWare would make around $12.8-13B.
VMWare is just a BU now, not a company, and the economics of managing "just another product line" is different from a company with a flagship product
As I've mentioned before on HN, the math is different and it makes sense to up prices and only concentrate on F1000s at that size.
> Pinning all your revenue on a much smaller customer base means losing one or two of them has a huge impact
Large customers are sticky. You can't migrate your hypervisor or cloud provider overnight. These are multi-year projects.
Also, it's better to target a smaller base of high paying customers instead of a large base of low paying customers because every sales motion and support ticket is an opportunity cost and a financial cost.
> Large customers are sticky. You can't migrate your hypervisor or cloud provider overnight. These are multi-year projects.
Yes, but that scale, everything is an multi-year effort.
The contracts likely as well.
That doesn't mean, it's not going to happen.
And it's not like all has to happen in one go.
So before you were all in VMware, and that vendor is practically promising to hike up the prices to make you bleed.
What are you gonna do?
I'd rather start early to have a migration path, even if it is just for negotiation purposes.
And if it's someone who has the resources to that, it's large customers.
When you have a sticky existing customer who's about to churn, you end up discounting below the price of the migration, then slowly rise the cost again, then do the same thing again (this is easy because margins are 80% in our industry).
All vendors do this - you can't escape it. This is why companies began leaving for the Cloud - sure it's upfront more expensive, but the negotiations are not as protracted.
> All vendors do this - you can't escape it. This is why companies began leaving for the Cloud - sure it's upfront more expensive, but the negotiations are not as protracted.
I don't get your point here: if you mean the public cloud, it's the synonym of vendor lock-in now.
Everything is vendor lock-in. The difference is negotiations are not as protracted, the muscle to develop a multi-cloud strategy is fairly well built in our industry, AND cloud purchasing offers multiple different styles of billing (eg. subscription driven, multiyear, credit driven, etc) whereas with on-prem you have only a single type of billing model.
Sorry just to clarify, leave for the cloud or leave cloud? Looks like in this case it is indeed leave for the cloud (leave VMs) but I also heard a lot about leaving cloud for self hosting.
Leaving/left for the cloud. There is some scaling down of cloud resources for self hosting, but as a whole all CSPs have seen growth in users across all buckets.
On-prem doesn't give you flexibility, and leaves you open to getting arm twisted by vendors. Similar stuff happens in cloud ofc, but it's easier to implement a multi-cloud strategy than a multi-hypervisor strategy.
Also, where are ESXI customers at the enterprise level going to go? Do we really think they're going to magically switch over to HyperV (and get Win admins) or Proxmox (and have a lack of IBM-enterprise level support)?
Funny that you say that. In my personal experience, the degree of support is one of the reasons to switch. Like any large vendor, it takes almost more time to convince them that it there is a problem, then it would take to fix it, if you have the technical skills in house. (That was enough for Google to switch to their own switches).
Haven't worked yet with IBM, but if they are of equal level, then I'd rather avoid them.
But since you say IBM, they have IBM Cloud Manager, and through Redhat also an Openstack offer, and with Openshift a K8S offer. Various vendors offer either or both.
There are also companies which operate internal cloud providers for other companies.
Various public cloud providers offer you to operate your datacenter with their API in-hose.
Yes, it comes with their hardware, but guess what, in three years chances are half of your hardware is deprecated and has been replaced anyway.
Yes, all that requires effort. Considerable effort. But it is a one-time effort (i.e. fixed costs) compared to a X-fold increase of licensing costs. So, you look at the ROI, consider the risk of having that degree of exposure, and guess what...
To reiterate: It doesn't have to be all in one go, it doesn't mean it has to be all of it. Maybe some of your payload will always stay on vmware, but thinking you can ask the big companies for 20x the license costs, and expect 20x the revenue is rather odd.
Let me say it differently - from what company does the CIO procure from so he doesn't get fired because he can't call up a company to support his corporate ERP running on VMs?
VMware isn't just VMs. They are deep, deep, deep in the stack at some places. There isn't a realistic migration path away from VMware for the customers that Broadcom is interested in keeping. Or, put another way, the time it will take for those customers to move away from VMware (which they won't) will take Broadcom to make their money back on this acquisition a few times over.
Don’t attribute this stuff to strategy. The people running “the BU” are just counting on friction to hold on to revenue. They aren’t able to even meet the commitments they make and are disrespectful to customers in other ways.
I think they overestimated their market power. I have 2 years left on my main ELA. I have budget to spend 5x to exit. My spend will go from 8 figures to under $1M.
Personally, I resisted the visceral “fuck you” emotional response. But it’s one of the rare times when the quick take is correct. The reality is VMWare is dead and is too risky to keep in place. The smart move is not to play.
You can fuck up A LOT and retain customers if you're honest and truly working in the customer's favor. The absolute second a customer picks up that you're in it to simply pick their pocket, there will be nothing left but a customer shaped hole in the wall. I have been in situations where we've completely fucked a customer's business causing all kinds of financial damage and customers have stayed because we committed to making things right. I've also been in situations where hubris assumed a sticky customer isn't going to unstick themselves, and of course the customer left.
It's so much better business not to be an asshole. I really don't understand how people can't internalize this.
Large customers also can have resources to simultaneously negotiate you on price while starting 3 initiatives to "remove vmware ASAP".
F1000 can have sticker price shocks and sensitivity too, especially if you happen to raise your prices soon after other events that might have made them look into cost savings...
I was an infrastructure architect at a F50, and I'm sure they'd have been quite sensitive to the changes. Like, once we got a confirmation of new pricing, the day after we're kicking off a Discovery process to find and cost out some alternatives.
They were, and I'm guessing still are, also very resistant to SaaS / IaaS plays, for a lot of (arguably) good reasons, and I'm not sure what they'd go with as an alternative. OpenShift? Raw dog some DIY docker clusters?
Probably various integrators? Oxide misses some critical features in networking right now but I suspect it would a very tempting option for many once they added support for the typical unholy mess that are vlans connected to vmware networks.
I don't know where exactly in spending bracket my current $DAYJOB fits, but I did hear both about negotiating prices with Broadcom and grumbles of looking for replacement including accelerating movement to AWS where possible.
> Even with severe churn, VMWare would make around $12.8-13B.
Down from the $13.4B -- that's not 'severe churn' you're describing there, it implies only a few percent drop in revenue. We've yet to see if that's the likely outcome here, but touchy-feely sentiment suggests that it'll be worse than that.
> Large customers are sticky.
Isn't TFA a precise counter-point to that assumption?
Most cases "severe churn" is counted as 80-100% NRR as customers are on multiyear contracts that are much more expensive to break than they are to wait out.
> Isn't TFA a precise counter-point to that assumption?
The customer was already a Nutanix customer, so the hard work was already done.
Basically, this customer was using BOTH Nutanix and VMWare internally (I am VERY surprised how the previous CFO did not get fired for something like that), and because they already had the Nutanix knowhow and licenses, migrated fully to it.
For reference, this article was written by the Register journo who was at Nutanix .NEXT (Nutanix's corporate conference).
> Basically, this customer was using BOTH Nutanix and VMWare internally (I am VERY surprised how the previous CFO did not get fired for something like that), and because they already had the Nutanix knowhow and licenses, migrated fully to it.
Why do you think that? Not putting all of your eggs into a single vendor basket seems like a solid plan - if anything the Broadcom/VMware disaster supports it.
Have you ever seen Nutanix's pricebook as well as VMWare's?
Spending 2x on hypervisors is dumb because now you need 2x the headcount on SMEs because you'll need both a Nutanix and VMware SME, as well as 2x the contract negotiations, and the money you are spending on both could have been better spend improving your product or hiring more people to sell your product.
It's a bad use of capital. At the end of the day, Infra is a cost center. It's something used to keep the lights on, but doesn't expand your TAM.
> It's a bad use of capital. At the end of the day, Infra is a cost center. It's something used to keep the lights on, but doesn't expand your TAM.
Indeed it is and while CFOs may not completely understand the technology they do understand risk and if the CTO has flagged "single vendor" as a risk then the CFO will go with that.
I also wouldn't be surprised if pre-Broadcom VMWare APJ AEs gave these guys a sweetheart deal just to make logo/ACV quota in their region. Shenanigans like that were VERY common at VMWare before the acquisition. Their SalesOps was horrid.
> every single large company I worked for had AWS, Azure and Google Cloud,
Multi-cloud is different from on-prem related stuff like multi-hypervisors, because there are multiple billing methods, the muscle to migrate is much better built in the industry, and your cloud costs can be placed within R&D (which traditionally gets way more leeway due to tax benefits) whereas any IT Infra spend will inevitably fall under the Finance&IT budget.
Of course it's very different, but it's the same in how buying the same functionality from a competitor is not a reason to get you fired unless there are other specific conditions.
> (I am VERY surprised how the previous CFO did not get fired for something like that)
It always make me smile how fast people on the Internet would fire CFOs without knowing the context of the situation. (Not to mention that this case proves the guy was right.)
> I am VERY surprised how the previous CFO did not get fired for something like that
Could be they acquired another company that ran the other one. We see this with our customers all the time. They acquire a competitor, slap their name all over it, but we still have to treat them like effectively two separate customers for ages.
Forgive me, but it feels like a lot of contradictions, assumptions (not in evidence), and hand-waving with this and your other comments in this thread.
You've said 'severe churn is 80-100% NRR' in one message, but in another that 'severe churn' would involve only a difference from 13.4b down to 12.8 - 13.0b (vmware / broadcom revenue).
You've said that it's foolish to have two hypervisors in play in an org, because then you're doubling up on SMEs for hypervisor infrastructure.
Computershare's revenue last FY was 3.2b -- and as per TFA they were running 24,000 VMware VMs (one can only speculate on the Nutanix VM count) -- so it seems reasonable that they'd have sufficient baseload of SMEs to split across two technologies without sending the company under. Given their YoY revenue increase from the previous year, it evidently wasn't a constraint.
You've said that multi-cloud is different (more acceptable / forgivable) to multi-hypervisor for three reasons:
a) different billing mechanisms
b) migration is baked into cloud services
c) cloud budgets come under R&D rather than finance / IT
I don't know if (a) and (c) are the same thing worded differently, but I'd vigorously dispute that on-prem has only one billing method, that migration from one SaaS provider to another is 'better built into the industry' (all the players make it monumentally difficult to migrate off their platform), and with (c) I'd once again murmur 'facts not in evidence', especially in the context of TFA (Computershare)
You have not addressed that multi-cloud has the same two problems you accuse multi-hypervisor of suffering - a requirement for multiple sets of differently skilled SMEs, and 2x contract negotiations.
The revenue drop is more significant. Broadcom bought CA in 2018, CA had roughly $4b in annual revenue. Bought Symantec in 2019. Which had roughly $2B in annual revenue. The consumer version, Norton Locklife, now also has roughly $4b in revenue without the slash and burn experienced at Symantec. In roughly 5 years, the combined franchise has managed roughly $1.5b in annual revenue growth. VMware in the same period managed around $6b in growth. Roughly 50% growth in the top line, without the slash and burn approach. With the trust of the ecosystem. So, yes, in the short run, they will have some growth in revenue, but it slows down, quickly. Last year their infrastructure software revenue grew by 3% - the average inflation rate was 4.1%, they shrunk in the previous 12 months. So I'm not sure how this will all work out but given that they have a target of $94b to return to shareholders (dilution + the cash outlay). In Broadcom's Q12024 (which was historically VMware's Q4), VMware's contribution to Broadcom was down by $1B YOY. I am waiting for earnings reporting next month, but I'm not sure they will hit their target. Customers left. Their reputation preceded them.
Many vendors confuse inertia for stickiness. Large customers are slow. But like super tanker they are very hard to course correct once you send them one. Course you don’t like.
> Large customers are sticky. You can't migrate your hypervisor or cloud provider overnight. These are multi-year projects.
I can assure you first hand than not only F1000 but also F100 consider migrating away from companies that introduce sudden price hikes counting on inertia. It's not a question of "if", only "when".
Because migrations should happen all the time. If things are done right requires the same effort to patch and have downtime of all your systems than it is to migrate from one hypervisor to another. I've migrated tons of systems, sometimes p2v and v2v makes it simpler/faster but more often than not it is more useful and as fast to reinstall system then redeploy app (you can often use that time to migrate to major OS release) and it is dead easy to do a rollback if you encounter issues in migration, stop the new one, restart the old one.
A company that is not staffed to migrate all its servers in less than 3 months is not staffed to have the most minimum level of IT security.
The reality is that in many organizations, nobody wants to update or reboot anything unless absolutely necessary. I once took a contract job at a company that wanted me to migrate and upgrade some Linux VMs running on a 5+ year old distro. This was a decent sized, established company, not a startup (1000's of employees, 100 million+ revenue)
The existing VMs had not been updated or rebooted in years. Several had 1200+ day uptimes! These systems were accessible from the Internet and regularly used by customers for an important, highly specialized product. The only reason they were even bothering was they had failed some security scan and nobody there could even understand how to use SSH.
The minimum level of IT security is apparently barely anything.
Hypervisor migrations? Complete DC migrations? If you are doing that every single quarter you are doing something VERY wrong (or you should migrate to the cloud).
You don't have to do these migrations, but you should be able to do them because basic security maintenance of systems require regular patching, reboots, downtimes, etc. Setting up a new VM and deploy the apps/services takes minutes, not days.
The infra has to be setup to support downtime of systems (not all at once obviously).
I remember my father doing this one. He was an SME support company. With two clients. He cranked the price up 4x and said ”we’ve got them by the balls”. They both opened a tender process and shot him and he was bankrupt 6 months later.
Exactly. I do not know how what is happening with VMware didn't happen to Oracle years ago, apart from them being a legal firm with a tech product attached.
Because Oracle does have an actual product and team that is actually skilled and delivers what they promise. Sure, there are competitors that might do similar, but they also cost a pretty penny.
I'm guessing those examples are legion. Always treat your costumers and partners with respect. Another famous example is BeOS thinking they have Apple by the balls to be the basis for OSX. Demanded an outrageous price, Apple just used a BSD.
That is not a good comparison. NeXT was far more than "a BSD". It was a whole bunch of frameworks, development tools, applications, and a hardened team that had already ported to several other architectures. BeOS was still mostly vision at that point.
that seems like it had way more to do with the decision that anything technical. What the team at Next built is quite impressive as well, but the goal was to get Steve Jobs back.
Yes, but I guess you get to know the customers better and make sure the product fits them very well, or atleast better than the competitors.
Another more cynical thought is that this is a way of increasing revenue and profit quickly so the share price rises quickly. You get your options and bonus and leave before the rest of the customers leave.
Your second cynical answer is the correct one. It's always about the shareholder and never about the customer at Broadcom. Remember Computer Associates (CA)? Yeah, they're now Broadcom. That pattern of acquire - consolidate - turn the screws on the customer DNA / culture is very strong in Broadcom.
In this case, if you increase your price 10X and they don't leave you, there must be some deep technical reason why they cannot move even if they want to.
I used to work for an enterprise software vendor that had LOTS of customers, and losing a single customer was painful but didn’t really affect that much. I’m now at a much smaller company, and I feel like it’s noticeable in the stock price when we gain or lose a customer. Kinda scary, but exciting at the same time. No idea if it’s just my brain inventing patterns.
Acquiring new customers would become quite difficult, though. If you increase prices to a point where everyone who can leave will leave, who in their right mind would choose your product and risk another price hike in the future?
Makes sense. Does that mean there is a bigger market for mid-market and below now? Maybe it is too annoying for the big companies to care, but could be lucrative for smaller ones.
> Does that mean there is a bigger market for mid-market and below now
Nope. Tech forward mid-markets (eg. every single tech startup) are all cloud first, and the legacy mid-markets will go thru MSPs and Resellers to buy these products.
But we're talking subscriptions so the drop-off is recurring. You will have customers who will burden the cost while they migrate and ditch you as soon as they're done.
If you start celebrating your new pricing structure with just a 90% customer loss in Y1, you're in for a nasty shock in Ys 2-5.
That's before you factor in the shift of mindshare to alternatives. Pointing this thing at ultra-large customers means everyone else is using and training on something else.
Similar to pmx's point, an implicit assumption in this (which is unlikely to be true in many scenario's) is that the there is a negligible spread in the distribution of revenue per customer. Imagine if you have one whale customer and a bunch of small fish, if you lose the whale in the change you won't maintain the same revenue.
Some scenario's this assumption is reasonable though (say Netflix subscribers).
> he found the IT department using two hypervisors: Nutanix AHV, and ... VMware. The CTO felt two hypervisors was one too many and considered a consolidation
Good move, and plenty more like this will happen.
But like I've said before, the winners will be Nutanix, Citrix, and other existing enterprise infra vendors - not Proxmox. And companies like Broadcom are fine with that because market segmentation is a thing.
(Also I hate hate HATE The Register's tone - so happy I'm not a PMM who has to wine and dine them at RSA or Re:Inforce.
The moment RSA and these holdover 90s blog cartels like Register and DarkReading die, discourse in the space can become so much better.
Practitioner lead conferences like Bsides and practitioner blogs are superior to these kinds of rags that are written in conjunction with vendors)
To be fair, the tone is supposed to be that way. It was designed as a UK-tabloid style IT news source, which have informal and opinionated tones (I don't know if it was originally done in jest or not).
The fact that it publishes in a low-brow, combative style in an industry that is (historically, anyways) mostly educated is part of the "joke", especially has most other tech press at the time it was created in the 1990s had conflict of interest relationships with tech companies (mostly relying on the same companies for advertising) - which is why the tagline is "biting the hand that feeds IT". It's easy to forget that most tech news sources were overwhelmingly uncritical to even bad tech. For those of us who had to actually deal with it, it was refreshing to know other people hated <insert vender product here>. For a good while in the 1990s (before it could stand on its own) it was a site written by people who actually worked with products from the tech companies (with their sales people) and could comment if they were going downhill or got screwed by pricing changes.
Is it possibly outdated and tiring now? Sure (it stopped being a daily news source for me around 2010), but it helps to understand the history and why it is or was popular.
The issue is these old school blogs aren't some random dudes eating ramen who love technology for the sake of technology anymore.
They are now owned by press wire publishers and corporate conference owners, and as companies have increasingly moved away from both these options, the tone has become increasingly uneven.
Look at how much RSA flamed Palo Alto Networks for deciding to quit RSA and how Register never uses snark in the articles it writes with CEOs, leadership, or companies who invite Register to their conferences.
It's basically an attempt at extortion, not the truth. The practitioners who are technical don't write for these rags. And most of the Register's (and at all their parent companies publications) are non-technical journalists for whom this is a dayjob which they'll inevitably leave to become a Comm Marketer at a Vendor like the dozens I've worked with.
> especially has most other tech press at the time it was created in the 1990s had conflict of interest relationships with tech companies
So does The Register. I've literally wined and dined their writers at RSA years ago.
You might be right, but at least it is SOME skeptical source to fight back against the unending gusher of marketing bullshit.
The fact they may preferentially apply the snark based on "extortion" isn't great, but at least they are SOME voice, and like comedy some snarky sarcasm is often much more incisive that (shockingly) fluff.
And considering the gushing amound of shadow-sponsored fluff in other magazines, aka the flip side of your alleged "extortion". If anything, the non-snark is an honest signal to an informed reader.
> is SOME skeptical source to fight back against the unending gusher of marketing bullshit.
They aren't though. They are also marketing bs. If you work at a vendor, go slack your content marketing team for a coffee chat to understand how it works.
This is the managing company for The Register [0]. We'd work with AMs at Situation Publishing to be looped to the right magazine (Register, Next Platform, Blocks and Files, etc) and could complain to them if we gave enough business to them.
You're complaining about the news/publishing industry in general, though.
As I mentioned earlier, the register isn't on my radar anymore and obviously sold out. In your original post, you had a hate-on with their tone, but it was their tone that (originally) made them refreshing. The discourse without it would be have reporting on corporate release announcements and various reviews by people who don't use the products day-to-day in their actual job.
Snarky tones about Larry Ellison needing yacht money or referencing whether a good or useful IBM product was worth having to deal with their aggressive sales people was the indications that the writers (again at one time) got or understood the industry.
Of course, that's not sustainable as a business model...
Anyways, my main point is that it's not the tone that's the issue, it's the publication industry for reasons that you stated.
I find the snark refreshing compared to all the corporate drones using their carefully worded lawsuit-proof, passive-voice, non-committal, lawyer-vetted style.
You must work in a very, very sane environment - for most of us this is literally a breath of fresh air.
They are not snarky and they very gladly work with corporates as well. They are just writing in some weird pissy tone.
Look at all the sponsored content they have from ZTE, as well as all the Nutanix specific articles because of Nutanix .NEXT
Snark is fine if you are evenhanded by being snarky about everyone, but it ain't great if you're clearly picking and choosing and deciding to take money from vendors.
I'd like snark, but I'd rather hear that from an actual practitioner, not one of the several tech "journalists" we'd wine and dine when I was still working for vendors.
Hate to burst your bubble, but even the super tight-laced "serious" journalism, especially in tech, all works the same way too. Going super hardcore on "professionalism" makes it easier to sell objectivity whereas in the background you are also clearly picking and choosing to decide to take money from vendors.
It's just one aesthetic over another. The corporate-style is made to win over those naive to think their slick editing and wordsmithing means that they're objective about their reporting ("so professional! Real journalists!"). The snarky/edgy style is made to win over those naive enough to think that because they're "rebels" then they must be objective unlike those corporate stuck-up types.
Fair point. I was thinking solely from a Upper Market perspective.
Higher Ed is in a weird place where budgets are small but the personnel are fairly adept, so depending on the size you guys could actually be a good fit for deploying and managing a FOSS offering like Proxmox.
You're right on the money. The magic of VMWare before is that it did enough for a low enough cost that it made sense for all sorts of orgs, even those that were quite cost sensitive.
But higher ed is weird for the reasons you mention.
To elaborate a bit: before commercialization, universities were a huge part of the early internet, and they invested heavily in datacenters and connectivity at a time when "the cloud" didn't exist.
They also have weird cost models and paying for power/cooling is sometimes done in a way that IT doesn't even account for that burden at all.
So to a large degree, shutting down on-prem stuff to move to "the cloud" has never made financial sense for unis, and they've always had to adapt to whatever datacenter tech has been required over the long decades.
That means they're staffed with people who never forgot how to run workloads directly on the metal, and aren't afraid to build it themselves rather than just move to a vendor. When it comes to the VMWare / Broadcom situation, "once bitten, twice shy" is going to be in the back of their minds - they know they'll be around for decades to come, and nobody wants to have to migrate early due to another rug pull.
They are not snarky and they very gladly work with corporates as well.
Look at all the sponsored content they have from ZTE, as well as all the Nutanix specific articles because of Nutanix .NEXT
Snark is fine if you are evenhanded by being snarky about everyone, but it ain't great if you're clearly picking and choosing and deciding to take money from vendors.
Yep. They're not a must read like they were then, and like Computer Weekly were in the 90s, but I'm still glad they're around to provide slight balance to all the regurgitated press releases.
> Good move, and plenty more like this will happen.
What is a good move? Maybe I misunderstand what you are saying, but I thought the main lesson from the whole VMware fiasco would be that IT departments would not rely on a single vendor/hypervisor in the future. This consolidation just increases their dependence on Nutanix, does it not?
Consolidation is a good move, because it minimizes your overhead from a team management and procurement management basis.
Infra is a cost center at the end of the day.
> I thought the main lesson from the whole VMware fiasco would be that IT departments would not rely on a single vendor/hypervisor in the future
Can you justify spending 2x your hypervisor budget when that same pot of money could be used to hire more engineers who make the product the company is selling?
You are absolutely right that consolidation minimizes overhead. I work in an IT department who relies on VMware and I certainly do not look forward to the prospect of updating all our tooling to work with multiple hypervisors. It works quite well as it is.
And it certainly makes sense in the short term to spend the money on the product instead of on infrastructre. I just wonder about the long term in the context of how we do business. Because on the one hand you have management pushing topics like "risk management" where I have to take responsibility for the most trivial of things in day-to-day operations. And then there is the hypervisor issue where "risk management" goes out of the window and we happily rely on a single hypervisor that could (from one day to the next, more or less) upend all our business.
Yep. It is a conundrum, and why a lot of my peers in F500s lead hybrid cloud or a multi-cloud migrations. This way you can auto-scale if needed within your cloud providers (which are easier to migrate from than on-prem due to better DevEx) or return back to on-prem if needed from a cost saving or infra standpoint.
That said, these are questions that are very organization dependent.
Why does risk management go out the window? Don't you highlight a single vendor in your BCP plan? Raise the risk, do some quick analysis on how to mitigate that risk and let someone sign off on it.
Accepting the risk doesn't mean 'going out the window'.
However, would it be sensible to keep a small team on a different tech (in this case move everything to N but keep a small V team) so that when shit happens in the other side you have an immediate team to migrate everything to this side?
(I'm thinking about MSFT who maintained a small Windows team when the majority effort went to OS/2 back in the 80s)
I admit to not understanding or caring about the full scope of Computershare’s business (side note: that’s a dumbass name), but having been forced to suffer their software when working for a former company, it boggles my mind that they need 24,000 VMWare VMs, in addition to a bunch of Nutanix VMs.
It was a very reasonable name in 1978 when they started, as they provide stock and share services for companies via computers - something uncommon in that time.
I don't think I've ever seen to this degree such a misguided focus on short-term profit at the expense of driving away ALL future customers. At this point, who ever would even consider VMware for a new project or business? Vmware will exist only as long as their current customers exist. Being a VMware salesperson has to be a brutal job right now.
And you can bet that many of them are currently looking at removing or severely reducing their VMware dependance, maybe even decommissioning projects that are deemed unfeasible to move to another platform.
Yes. A 15% price hike is a little high, but could be expected in bigger businesses from time to time, a 15X price hike is something that the entire C-Suite now has to discuss. And what 15X new features are coming with it now?
There are lots of details missing. VMware had a crazy amount of product and support SKUs. It is possible that they were vastly underpaying relative to what they should have been licensed for. Also, 24k VMs is a lot but core count is what matters. They could have been running that compute with insane overprovisioning, and Broadcom generally wants customers with REALLY HIGH core counts. Finally, the new SKUs that Broadcom are pushing consolidate lots of products together that would have previously been purchased separately. If they were _only_ vSphere customers, the hike might have come from now needing to be NSX and vSAN customers against their will.
All that said, lots of customers definitely had similar experiences; it's all over /r/vmware. Broadcom is not joking about wanting to cull the herd here.
It's a submarine article from Nutanix .NEXT who seemed to have done a media buy with The Register.
I've always detested that kind of underhanded vendor tactic, and am honestly happy that giants like ZScaler and Palo Alto Networks are moving away from the conferences+trade rag GTM and moving towards either direct sales or more targeted usergroups+conferences (eg. BSides).
> Broadcom is not joking about wanting to cull the herd here
Yep! Niklesh did the same thing to turn around PANW, and imo VMWare kinda needs it. The products are good, but it seemed like a lot of shenanigans were happening at the AE level.
I've heard down the grapevine that there's a significant shift towards cloud security now, which I think is something VMWare really needed to do - they had the right products, but became addicted to on-prem cash cows.
mostly not making that comment from a technical perspective. I personally have not had technical issues with Nutanix, we use it as designed: hyperconverged infra in relatively large deployments.
my comment is mostly around their financial performance. it was not too long ago they were facing some headwinds, and giving the market concerns they could be sold off. Going from those concerns, to now having substantial growth, can cause some pain points for a company
They still force you into a specific hardware organisation (hyperconverged, disks are on the compute nodes and storage is distributed) which doesn't make sense for everyone's workloads.
Also, at least a few years ago(hope it's not still the case), a lot of their services were a bunch of open source poorly stitched together with bash, and their poor abstraction over it was leaking heavily. Their APIs were also very poor (I mean, VMware's are objectively complete shit, but at least they cover almost everything; Nutanix had major gaps in API coverage).
I believe it's all Supermicro hardware. We looked into it as well (higher ed) and it was just way too expensive for their NX servers with Intel Silver CPUs.
I've heard stories that it's usually low cost to enter, but when you want more CPU/storage it's ungodly expensive.
Even the initial quote for three hosts was ridiculous for the CPUs offered.
> Even the initial quote for three hosts was ridiculous for the CPUs offered.
And storage, a few years ago they were trying to convince us that their cache is soo good, you should use spinning disks with some SSD cache. Of course they wouldn't provide any concrete numbers, and even with hybrid storage and subpar CPUs, they were a decent chunk more expensive than traditional servers with better CPUs and a dedicated full flash SAN.
Add to that the subpar (even in their demos!) software with lacking APIs, and it just seemed extremely weird to see them getting business.
Yeah, the company I work for has millions of dollars tied up in Pure storage arrays. We evaluated Nutanix and I just stopped listening after they said they don't support external storage. Huge missed opportunity for them.
I wonder if this is why GEM suddenly stopped working! All of a sudden, I couldn't access my stock option platform for a previous employer through ComputerShare. The platform was suddenly shut down in April.
And Nutanix is working incredibly great (although that is not a big surprise considering it is "just" KVM with heavy modifications), I recently finished a small consulting gig at a SMB making the jump from VMWare to Nutanix.
It would not surprise me that soon Broadcom will realize they purchased a dead company, because according to my contacts at Nutanix the OP is not an edge case and small and large companies are migrating from VMWare to Nutanix and/or other solutions such as OpenStack in droves.
"Nutanix, he said, is now his champion for databases, all 128,000 of them, after delivering 1,000 percent better performance than another unnamed rival and pulling off tricks like recovering a forty-terabyte database in eight minutes."
... yeah. I like El Reg, but... come on. ONE THOUSAND MEGAPERCENT vs unnamed rival.
Nutanix has an in-house cassandra fork I believe, I wonder if they are weasel wording some linear scaling.
I believe kubevirt just delegates to the under-hypervisor (whatever it is). That being said, default kubernetes waits at least 5 minutes before considering a down host as actually down.
If you hike your prices by 10-15x, you only need 6-10% of customers to stay to maintain your revenue, reduce costs and massively increase profit margins!