VMware Customers Upset with Broadcom’s Price Hikes
A Growing Concern for Small and Medium-Sized Businesses
Dean Colpitts, CTO at Canadian VMware customer and managed services provider Members IT Group, shared similar sentiments, adding that “Broadcom simply is not listening to what customers say they want or need” when it comes to VMware products and features, especially those related to small and medium-sized businesses.
Sticker Shock for Community Colleges and Other Budget-Constrained Organizations
VMware Enterprise Edition costs for Illinois’ Lake Land College rose 300 percent “with no additional features/benefits,” Director of Technical Services James Westendorf said via email. Lake Land has used VMware since 2008, but as a community college, its budget can only stretch so far, Westendorf explained:
Since we are a community college, we are responsible to the taxpayers to be good stewards of our funds and investments in technology… When there is a significant price increase, such as 300 percent, it becomes an issue that requires us to weigh the cost against the gains and seek alternative options.
More Focus on Large Customers
Larger Clients More Likely to Absorb Price Hikes
On the other hand, large customers are more likely to be willing and able to stomach VMware price hikes. IT company Veeam, for example, saw prices for the VMware products it uses jump 300 percent, but “internal services are staying the course,” Rick Vanover, Veeam’s product strategy VP, told me.
Concerns Over Broadcom’s Prioritization of Large Customers
Pricing and other changes have led some customers and partners to suspect that Broadcom prefers enterprise-sized customers for VMware. In January, Broadcom reportedly took approximately 2,000 of VMware’s biggest customers direct, cutting channel partners from the deals.
Impact on Nonprofit Organizations and Small-Medium Sized Businesses
Nonprofit organizations, like hospitals and school districts, have been the clients most dramatically impacted by Broadcom’s changes to VMware, with smaller and mid-sized customers having a “high degree of difficulty” absorbing VMware’s new cost structure, Andrew Lerner, a distinguished VP analyst at Gartner, told me. He said it’s reasonable to expect enterprise-sized clients to represent a larger majority of VMware’s customer base moving forward.
Conclusion
Broadcom’s recent price hikes have left many VMware customers, particularly small and medium-sized businesses, feeling frustrated and concerned. While larger clients may be more able to absorb the increased costs, budget-constrained organizations like community colleges and nonprofit organizations are facing significant challenges in adapting to the new pricing structure. As a result, some customers and partners are questioning Broadcom’s prioritization of large customers over smaller ones.
FAQs
Q: Why are VMware customers upset with Broadcom?
A: VMware customers are upset because of significant price hikes without additional features or benefits, particularly affecting small and medium-sized businesses.
Q: How much did VMware Enterprise Edition costs increase for Lake Land College?
A: The costs increased by 300 percent.
Q: Is Broadcom prioritizing large customers over small and medium-sized businesses?
A: Yes, according to some customers and partners, Broadcom’s recent changes suggest a focus on enterprise-sized clients.
Q: What are the implications for nonprofit organizations and small-mid-sized businesses?
A: These organizations face significant challenges in absorbing VMware’s new cost structure and may need to seek alternative options.
