IE11 Not Supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

Some Straight Talk About Broadcom's Moves with VMware

Roundstone Solutions takes you through how you can benefit from Broadcom's moves by deploying Nutanix.

We’re several months down the road from Broadcom having acquired VMware, and we've now seen pretty clearly the moves Broadcom has made and is making.  We've heard the talking heads opine about who will be the winners and losers in this environment.  So far, I've been surprised by the lack of clear analysis of what this means for the average End User customer.  So, let me share my views on things, particularly on what it might/could/should mean for End Users at the State of California.To begin, VMware has been selling two products that most End Users have deployed for many years.  VMware's flagship product, and the product that pretty much everything else is based on, is vSphere, also known as ESXi.  This is the virtualization product that VMware is known for since they invented the product in the early 2000s (over 20 years ago...a lifetime in technology).  Another primary product VMware is known for is vCenter, which is their management plane, allowing users to manage their virtualized environments.  Both products are well regarded, and most organizations at the State have trained their staffs on these products.For years, VMware sold their products with perpetual licenses.  You would buy a server from Dell or HPE, and then you would buy vSphere licenses for those servers, in some cases, the vSphere licenses cost as much as, or more than the actual server itself.  You also added the new server to your vCenter license.  Again, you paid once for the VMware products and had the ability to use them forever.  Or so you thought.The software industry has a history of changing the way it charges for software.  Some software companies base their charges on CPU cores, some base theirs on CPU sockets, some companies base their costs on number of users, etc.  Originally, most software companies sold their software with perpetual licenses, so that they could realize the revenue up front.  But several years ago, the world changed to wanting recurring revenue over time, and subscription licenses became what most software vendors went to.  A good example of this is how you pay for M365; it's not a perpetual's a subscription.  In other words, you're going to have to pay for that software more than once during the time you use it.  Good business for the software manufacturers, and not at all unfair to End Users.

Broadcom has decided to change from perpetual licenses from subscription licenses.  That in itself should have been a non-story, but the way they went about it is difficult for most End Users to come to terms with.  Rather than just move from perpetual to subscription licenses, Broadcom decided they wanted to bundle many software products (that End Users may not have a need for) into the subscriptions for the products most users wanted, namely vSphere and vCenter.  The idea was to add perceived value to the licenses as validation of a large cost increase.  That's a big part of what made the costs jump.It's no longer anecdotal information about the rise in costs from Broadcom.  In our business, we've seen cost increases ranging from 40% to over 500%, and this includes customers in Public Sector.  Of course, an increase of 500% on a base of $1,000 is measured in the small thousands, but to End Users that were paying VMware a million a year, the increase is in the millions.  Real money.  Where’s that going to come from at a time when budgets at the State are getting tighter?I believe Broadcom must not have thought this through, or they just aren’t interested in what their customers think.  I mean, the issues they have today are all self-inflicted.  They've decided to run their business a certain way, which is their right, with what appears to be little regard for End Users.  Again, that's their right, but, as a customer, you don't have to sit there and take it.The possible winner in this mess is Nutanix.  As many know, my company is a well -regarded partner of Nutanix; we know the platform extremely well.  We’ve held the State of CA DGS Enterprise Technology contract for over 5 years and have done all of Nutanix’s business at the State of CA during that time.  

I think Nutanix's messaging on the Broadcom situation is off a bit.  Nutanix is going around telling everyone they're a great alternative (and they are) to vSphere and vCenter.  But you can’t just purchase Nutanix's comparable vSphere and vCenter products and run them in your existing environment instead of Broadcom’s VMware.  Nope, you need to do something else, WHICH IS WHAT I THINK THE REAL BENEFIT TO END USERS IS.In Nutanix's view, VMware's vSphere and vCenter are not products anymore, but features.  Nutanix is 100% right about this.  You pay large amounts of money for products, but not features.  So why have end Users continued to pay huge sums to VMware/Broadcom for vSphere and vCenter?  My opinion is that it's Newton's first law.  Remember "objects at rest stay at rest"?   Well, End Users have always avoided doing things until they are forced to.  Most technical people were trained in VMware, and even though there may have been better products in the market, End Users stayed with VMware.  Even when there are alternatives that are FREE!  In your personal life, you wouldn't do that, but in business, well, it's the organization’s money, not mine. Let's go back to the discussion about Nutanix.  Nutanix offers two features with their AOS operating system called AHV, which is Acropolis Hypervisor, and Prism.  AHV is the equivalent of vSphere, and Prism is the equivalent of vCenter.  Both are included, at no cost, with every node that Nutanix sells.  In other words, you can have the same functionality as VMware at zero cost.  Who wouldn't consider that?But the real benefit I was talking about?  Well, in order to take advantage of Nutanix's AHV and Prism, you have to deploy Nutanix's HCI platform.  This means you'll be moving from a 30-year-old architecture called 3-Tier to a 13-year-old proven architecture called Hyper-Converged Infrastructure (HCI).  If you're unfamiliar with HCI, it's because you must not understand the architecture of the Public Cloud.  The Public Cloud uses HCI and has been using it for a very long time.The real benefit comes from moving to HCI with all of its inherent advantages (much higher performance, simplicity, scalability, choice, and lower cost).  The ability to eliminate VMware costs is a cherry on top, not the real driver.

The current DGS VMware SLP contract runs through August 31, 2025; roughly 15 months from now.  As you know, there are fixed discounts in that contract, and Broadcom/VMware can change the products sold as long as they honor the discounts.  Since the discounts in the SLP are very small, you’ve always been getting a better deal than the contract shows.  But going forward, that discount may be based on the new product structure, meaning the new “bundled” subscription pricing.  Some of our existing customers have already indicated they’ve gotten renewal pricing quite a bit higher than expected.  You can avoid this entirely by working with Roundstone Solutions and Nutanix.To summarize, smart organizations are using Broadcom's actions to take back control over their IT infrastructures, migrating to a more modern infrastructure (HCI) with its advantages, and positioning themselves to eliminate Broadcom/VMware costs altogether.It's a great time to look at Nutanix with Roundstone Solutions.  We’ll help you do a fair evaluation of the alternatives so you we can make the best decisions for you and your department.  We’ll even connect you to existing State departments that have already made the move to Nutanix, so you can hear first-hand how it’s gone.

Please reach out and speak to Roundstone Solutions.  As you can see, we look behind the headlines to really understand things.  We can be reached at 925-217-1177 (office), 925-324-1582 (cell), or​You'll be glad you did.
Roundstone Solutions is an experienced Northern California value added reseller, with a strong focus in the Public Sector, particularly State of California departments and agencies. We current hold several contracts with the State, including the Enterprise Technology contract for Nutanix products and services.