Broadcom’s $61 billion acquisition of VMware in November 2023 and the subsequent changes to venerable virtualization company’s business model and pricing have rankled many long-time enterprise users, a situation that has been highly publicized despite assertions by Broadcom and VMware executives that such reports are little than FUD – short for fear, uncertainty, and doubt.
A survey of 300 enterprise IT executives last year by cloud financial management company CloudBolt Software revealed a range of concerns VMware users had about the acquisition from uncertainly about Broadcom’s plans and a mandatory shift to subscription (rather than perpetual) licenses to anticipated price increases – some reports have talked of 150 percent to 200 percent jumps – and the forced bundling of products. About 95 percent of respondents saw the acquisition as disruptive to their IT strategies.
AT&T is a high-profile example. The telecommunication giant has claimed in court documents that Broadcom quoted it a 1,050 percent increase and last year sued the company for allegedly refusing to honor a renewal for support services.
Given all that, it’s not surprising that VMware customers are looking for options for their virtualized workloads. Red Hat apparently is on the list. The IBM-owned company had always had conversations with VMware users inquiring about its OpenShift container and OpenStack virtualization platform, with much of the talk focusing on modernization, according to Simon Seagrave, senior principal product marketing manager.
“Customers came to us because they wanted to bring their virtualized workloads onto a modern platform that would then allow them to modernize these specialized workloads onto containerized cloud native instances using things like serverless, DevOps, sort of GitHub methodologies, and so forth,” Seagrave tells The Next Platform.
However, the content of the conversations changed soon after Broadcom bought VMware. Almost immediately Red Hat began getting calls from VMware users that were tinged with more urgency.
“What we’ve found in the last year is that customers obviously, unfortunately, have had a little bit of sticker shock as renewal prices subscription based on their traditional virtualization platform,” he says. “They were looking for alternatives
