VMware customers with perpetual licenses continue to have free access to security patches. Customers who need to renew their subscription will receive additional decision time.

Broadcom is acting like a real Dr. Nasty towards small and medium-sized VMware customers since the acquisition of the virtualization specialist. Broadcom had previously acknowledged the discomfort. CEO Hock Tan now provides some clarifications.

He admits that VMware’s portfolio was too complex and poorly integrated to compete with hyperscalers. Broadcom is now dedicating significant funding to research and development to make VMware’s Cloud Foundation suite more powerful and simpler. At the same time, he emphasizes that not all VMware customers are happy about this.

“As we implement this strategy, we continue to learn from our customers how we can best set them up for success by ensuring they always have the transition and support they need.”

“Specifically, the subscription pricing model involves a change in the timing of customer spending and the balance of that spending between capital spending and operating expenses.” For the first time, Broadcom’s CEO says publicly that such extensions are possible. Hopefully this will give disgruntled customers room to renegotiate.

The pressure is increasing

Additionally, the CEO promises that customers with a perpetual license for VMware products can expect security updates (including zero-day). Initially it only affects vSphere, later Broadcom wants to add other VMware products.

This is in response to customers whose maintenance and support contracts have expired and who choose not to continue their subscription.” The change means that such customers can “use perpetual licenses in a secure manner.”

Coincidentally, Reuters published a report yesterday that European antitrust regulators had asked Broadcom questions about the licensing issue.

Last week, Gartner released a report on the hyperconferencing infrastructure (HCI) market. The analysis house assumes that VMware shares will collapse sharply. “The 30 percent installed base of non-VMware full-stack HCI in 2024 will increase to 60 percent by 2029.”

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