Overview:
In Episode 4 of the Tech Sessions Podcast, Christian Rolland, SVP of Modern Infrastructure, alongside Principal Architect Devon Arsenault, discuss the significant implications of Broadcom's acquisition of VMware. This episode, titled "Navigating IT in a World Where Broadcom Owns VMware," offers a thorough analysis of the strategic shifts and challenges that IT leaders face following this major industry acquisition. The discussion begins with an examination of VMware's transition to a subscription-based model and the discontinuation of perpetual licensing, emphasizing the disruptions and opportunities this presents for existing VMware customers.
Christian and Devon explore how enterprises can navigate these changes by reassessing their IT infrastructure and considering alternative solutions or modernizations. They discuss the practical aspects of migration and the importance of strategic planning, highlighting the need for businesses to adapt to a rapidly changing tech landscape. The conversation is filled with expert insights on maintaining operational efficiency and preparing for future technological shifts, making it a must-listen for CIOs, IT directors, and technology professionals seeking to stay informed in a dynamic environment.
Watch the Episode:
Key Topics Covered:
- Broadcom's Acquisition of VMware: An exploration of the initial acquisition details, regulatory approvals, and the subsequent shifts in VMware’s business model towards SaaS and subscription-based services.
- Impact on VMware Customers: Discussion on the termination of perpetual licensing and the bundling of products into simplified SKUs, which influences customer costs and infrastructure planning.
- Strategic Responses and Alternatives: Insights into how companies can respond to these changes, including evaluating other hypervisors, modernizing infrastructure, and possibly shifting to different cloud or SaaS solutions.
- Perpetual vs. Subscription Licensing: Examination of the implications for companies that hold perpetual licenses and how they are affected by the transition to subscription models.
- Future of IT Infrastructure: Speculation on how IT infrastructure and strategies might evolve in response to these industry changes, including potential innovations and competitive responses from other tech companies.
Key Takeaways:
- Strategic Necessity for Adaptation: IT leaders must adapt their strategies to respond to the significant changes in VMware’s licensing and product offerings, potentially reevaluating their entire IT infrastructure.
- Consideration of Alternatives: Organizations might need to consider alternative technologies or vendors due to the phasing out of perpetual licenses and the new subscription model which might not align with all customers' needs.
- Importance of Strategic Planning: Effective transition planning is crucial to navigate the changes without disrupting operations, especially for those heavily invested in VMware solutions.
- Potential for Modernization: This period of change provides an opportunity for companies to modernize their IT environments, moving towards more flexible, scalable cloud and SaaS solutions.
- Keeping Informed and Proactive: Staying informed about regulatory changes and the evolving tech landscape will help IT leaders make more educated decisions that align with long-term business goals.
Read the Transcript:
Ep. 4 - Tech Sessions - Navigating IT in a World Where Broadcom Owns VMware
[00:00:00]
[00:00:15] Welcome to the Modern Infrastructure Tech Session Podcast
[00:00:15] Christian Rolland: Hello everyone. Thanks for joining today's tech session podcast. Modern Infrastructure edition. I'll be your host today. Christian Rolland, SVP of our modern infrastructure group at e360. Today, the topic is going to be a meaty one.
[00:00:32] Navigating IT: The Broadcom-VMware Acquisition
[00:00:32] Christian Rolland: We're going to talk about navigating the world of IT. Where VMware is owned by Broadcom and boy, what a meaty topic this is.
[00:00:46] Christian Rolland: So today I am also joined by Devon Arsenault. He is one of our e360 Principal Architects. And quite frankly, one of the guys that I would go to for advice if I was building a data center. So Devon, thank you so much for joining us. I appreciate you taking the time out of your busy day and hope you're able to get into some of these exciting topics with me.
[00:01:16] Devon Arsenault: I'm excited to be here, Christian.
[00:01:19] Christian Rolland: Fantastic. Well, let's get, let's get right into it. So. You know, what happened? So somewhere in the neighborhood of about 2023, Broadcom purchased VMware and was waiting quite a number of months for regulatory approval, and we seemingly got that in November. And, since November, man, there have been a lot of changes that have been announced. VMware has basically moved all of their subscriptions to SaaS or moved to a subscription based model, terminated their perpetual [00:02:00] licensing, they've pre-packaged a number of their offerings.
[00:02:04] Christian Rolland: That means that they've stopped selling individualized products in many cases. You know, this is kind of really upended. I think some of our customers and the conversations they've been having, and I will tell you that this is a very, very live topic, even after the, you know, just the past couple of days, we're recording this in April of 2024 here and...
[00:02:30] Christian Rolland: you know, two things that have occurred most recently, which was VMware has extended or has agreed to extend support for some of the VMware perpetual licenses in and of the fact that they will provide security updates, which is quite interesting. That was a very recent move. And, , as of about last Friday, maybe Wednesday ish, you know, you regulators are looking to get involved here from an antitrust perspective and take some peek some inspection behind the terms and conditions and changes.
[00:03:09] Expert Insights: Devon Arsenalt on VMware's Changes
[00:03:09] Christian Rolland: So Devon, you know, what's your take on all of this? And, you know, quite frankly, what are, what are the customers perceptions when they just hear these changes?
[00:03:22] Devon Arsenault: Well, I gotta tell you in our conversations with clients, I think there's, there's a lot of apprehension over what these changes actually entail.
[00:03:32] Devon Arsenault: Certainly, the early conversations we were having with clients, there wasn't a lot of detail as to you know, what this was going to cost our clients going forward. So, clients were in the dark on that. And I think the knee jerk reaction with a lot of the people we've talked to is, geez, let's just switch hypervisors.
[00:03:55] Devon Arsenault: Let's, let's find a, let's look at other options. I [00:04:00] think if I were to really steer the conversation though, it's really to take your time and plan this out because, this, this could be an opportunity to actually, modernize what you're doing in the infrastructure. I think, we've, gotten a little bit lazy as IT infrastructure guys, you know, you just kind of plug in VMware and there's all the tools that kind of operate with it.
[00:04:25] Devon Arsenault: And we, we've just been kind of going along for the last 10 years doing that. And, there's a lot of assumptions, not just with the infrastructure teams, but also with the application teams, security teams, networking teams, where VMware is assumed. So, you don't want to just knee jerk, just rip VMware out from underneath everything that you're doing without really taking a look at where all the dependencies are.
[00:04:57] Christian Rolland: Yeah, there's a, there's a lot to unpack there.
[00:05:01] Demystifying VMware's Transition: FUD vs. Fact
[00:05:01] Christian Rolland: I want to start with one of, well, we'll go with a couple of the, the questions that, you know, demystify some of the, the FUD versus FACT here. When this announcement was first made, you know, we talk about 56 plus, products and SKUs that were abandoned or completely destroyed by VMware.
[00:05:24] Christian Rolland: Can you shed some light onto that for, for the audience? Well,
[00:05:26] Devon Arsenault: I think really what's happened here guys is, yeah, a la carte gone away. There's been a push with Broadcom to simplify the offering. And for a majority of our clients, we're really looking at two different SKUs that everyone's going to fall under.
[00:05:45] Devon Arsenault: There's what's called their their VMware Cloud Foundation product, which is a majority. Of those a la carte offerings that were a part of the old VMware. So, [00:06:00] anything that has to do with operations, ARIA, is involved, if you're doing containers, Tanzu, as well as some of the, the hybrid cloud offerings.
[00:06:11] Devon Arsenault: So SDDC for doing VMware, both in the cloud and on prem ., Even down to kind of the support offerings. their. Their SRE support offering where they give you engineering support to, to build out your infrastructure. The kind of The traditional data center SKU would be the VMware vSphere Foundation SKU.
[00:06:38] Devon Arsenault: And what that includes is really vSAN, your Hypervisor, ESXi Enterprise Plus, vCenter. Again, Tanzu and, kind of the Aria standard Suite. Aria, if you don't know, it's a rebranding of vROps, the old the old vROps. So those are the two skews you're looking at. It's take it or leave it.
[00:07:06] Devon Arsenault: You can't add or remove different products. So you're going to fall under one or the other. And, that that's really what the pricing is going to include. Technically, they've dropped the price on the hypervisor and they've dropped the price on a number of these products as well. Unfortunately you may be paying for a product now that you don't currently use.
[00:07:30] Devon Arsenault: So that's where some of the price increase starts to come in.
[00:07:36] Christian Rolland: And I think that you know, unpacks perfectly from a standpoint of customers are seeing 2X, 3X price hikes. The reason for that is generally speaking is you're, you're buying packages of software, you're buying bundles of software.
[00:07:52] Christian Rolland: And if you're already a VMware shop and you're using and capitalizing on you know, that particular investment, [00:08:00] then your price hikes and in many instances are going to be non existent if maybe you would even see a reduction in some cases based upon the way that the software has been provisioned in these packages.
[00:08:12] Christian Rolland: But most oftentimes we see a lot of customers that are, that are a la carte. What if, what if I already own VMware in this perpetual method? I've already bought my licenses and in subscriptions and I have my support and sure I have a maintenance window coming up. But I'm a perpetual license holder of VMware.
[00:08:33] Christian Rolland: What, what now?
[00:08:35] Devon Arsenault: Perpetual. You own the software. It's not going to just shut off the day your support ends. Again, they've made some announcements about doing some security patches going forward with perpetual licenses. What does not renew and what you can't purchase today is additional perpetual licenses and their support and subscription offerings.
[00:09:00] Devon Arsenault: They are not renewing those going forward. So you're going to fall under this new licensing scheme and these new VMware SKUs.
[00:09:14] Christian Rolland: How does this perpetual decision impact things like VX rail and other competitive offerings? How do you think, I think, you know, it's still probably a little bit too early to, to know definitively what the impact is.
[00:09:27] Christian Rolland: I think there's still some negotiation going on behind the scenes.
[00:09:31] Devon Arsenault: Yeah, right now, they've pulled OEM licensing. So I think that's the biggest. The biggest change, how that's going to play out for
[00:09:42] Devon Arsenault: products like VxRail still to be determined.
[00:09:48] Christian Rolland: Very good.
[00:09:49] Broadcom's Acquisition: Innovation or Monetization?
[00:09:49] Christian Rolland: Let's talk a little bit about, you know, the overall innovation from VMware. I mean, Broadcom [00:10:00] has gone through and they've been. bought, this isn't their first technology acquisition. I'll put it that way. They've, they've had a number of technology acquisitions over the years. Some of those technology acquisitions maybe have seemingly been more financial models than necessarily innovation drivers.
[00:10:24] Christian Rolland: What is your overall perception about, you know, Broadcom and, and their forward looking advancement of the technology and moving to this, this cloud and SaaS infrastructure? You think it's an acquisition that's going to drive innovation looking forward?
[00:10:41] Christian Rolland: I mean, that's hard to say, Christian.
[00:10:43] Christian Rolland: Broadcom has got a history of their acquisitions and what they've done with them.
[00:10:51] Christian Rolland: And they do like to monetize. I think they've even announced with some of their filings with Wall Street that they're looking to grow revenues from VMware from about, I think it's about four and a half billion to about eight, 8. 4 billion over the next three years.
[00:11:12] Christian Rolland: So there is an expectation that they're going to be able to monetize this acquisition. Here's the deal. VMware today, it's still probably the best alternative out there for a majority of workloads.
[00:11:31] Christian Rolland: So, does that mean it will be three years from now? Who knows? Certainly with this acquisition, we do expect that there's going to be some competitors that may start to work their way back into the.
[00:11:47] The, the server virtualization infrastructure play. So again, Hyper V, Microsoft hasn't done any updates on that for years, but they are talking about, you know, doing some [00:12:00] updates.
[00:12:00] Christian Rolland: They've also got their hyper converged solution, their Azure stack that they're working on.
[00:12:06] Christian Rolland: We're seeing stuff with Zen used to be a fairly big play with Citrix that, Citrix is allowed to go back to open source.
[00:12:15] Christian Rolland: And there's talk that they're going to bring that back in and start doing some development with that. Obviously Nutanix has had a hypervisor offering out there. It's kind of tied to their, their HCI stack, their software defined storage stack. But, they're potentially, they could be releasing that hypervisor, as a standalone product.
[00:12:36] Christian Rolland: So, it's hard to say what's going to happen in the future. But today, the reality is VMware is the 800 pound gorilla. It's got It's got a great feature set. It works for most workloads. It's got a great ecosystem around it. And so you have to do your planning today based on that.
[00:12:58] Christian Rolland: That's a great point that you brought up. You talk about the ecosystem around it, right? And we, most customers today. Operate a great number of production workloads on VMware, simply moving off of VMware could have a negative impact to the overall application to the applications, supportability in the future from a third party manufacturer.
[00:13:26] Christian Rolland: There, there are a number of considerations when you start thinking about, you know, what are my options moving forward?
[00:13:34] Devon Arsenault: Absolutely. And certainly, if you're looking to just straight kick the can and move to another hypervisor, there's, there's obviously components of the ecosystem. There's hardware, hardware support.
[00:13:49] Devon Arsenault: There's application support around your solution. There's compliance. there's compliance, things that you need [00:14:00] to, some, Some workloads may need a certain security accreditation that may not be available with certain hypervisor platforms. You've got your operations, your backup and recovery, your monitoring, all that stuff changes hypervisors. Disaster recovery.
[00:14:18] Devon Arsenault: How are you going to handle incident response? How are you going to handle long term support? Say you're going with an open source solution. So, there's a lot of things to consider when you're looking to just swap out a hypervisor that take some planning.
[00:14:38] Devon Arsenault: Absolutely.
[00:14:41] Strategic Planning for IT Infrastructure Evolution
[00:14:41] Devon Arsenault: Let's put ourselves in the shoes of one of the customers that we talk to each and every day.
[00:14:49] Devon Arsenault: There's a process that we go through. We've developed internally kind of a workshop format, which we can obviously offer to any prospector or inquiries, but if, if I'm that client. What are some of the things that, that I need to be thinking about as I go through and I navigate this, this landscape, right?
[00:15:15] Devon Arsenault: You talked about, you know, the packaging and you've talked about some of the tech things, sounds like there's some third party compatibility. How do you, how do you kind of package this into, you know, there's kind of the business side of it, which is, I think the short term financial implications that You know, obviously executives are, are gonna be facing.
[00:15:35] Devon Arsenault: And then there's the, there's the whole technology side of it, which is, you know, where are we going today? And, and how are we, how are we gonna transition potentially to something else in the future? And, and or maybe capitalize or monetize on the stack.
[00:15:48] Devon Arsenault: So , so that, that's a, that's a loaded question, Christian, and honestly, it, it kind of depends on how much time, how much runway the, the client has before they have to make a decision.[00:16:00]
[00:16:01] Devon Arsenault: If there's not enough, a lot of time before your renewal is up, you know, I think our recommendation right now is really to just kind of kick the can, go with a, a short term renewal, try to reduce the footprint as much as possible. Have a very good idea of what feature set that you're, that you're using and what you need to use, because certainly you, you don't want to.
[00:16:23] Devon Arsenault: Go with the VMware Cloud Foundation or the most expensive package if you're not using any of those features. but, if you can buy time, this is your opportunity to really go workload by workload and determine where the best place for that workload to reside. And, it's an opportunity to really rethink the architecture of the entire IT infrastructure.
[00:16:52] Devon Arsenault: So, an example, There, there are certain applications that maybe lend themselves to software as a service. I think a majority of our clients at this point moved their exchange to a software as a service offering as opposed to keeping it on prem. So that's an example of reducing footprint.
[00:17:17] Devon Arsenault: There are other applications that would fall under that, under that category. Some of your newer applications maybe lend themselves to, you know, an application modernization, instead of just sticking them on a VM, maybe we're talking about containers, maybe we're talking about putting those out on the cloud or even doing some sort of hybrid offering where you can run containers on prem for certain things and the cloud if you need to, to, to scale it, quickly. there are, There are options if you're looking to [00:18:00] really look to more of an OpEx model to just, just infrastructure as a service. So move to one of the public clouds and just move your server virtualization workloads out there.
[00:18:14] Devon Arsenault: So there are ways of reducing your VMware footprint, even if you don't completely get off of VMware. There are some workloads that that obviously need to stay on prem. So, there are instances where we're dealing with things like latency. You need it to perform very well.
[00:18:36] Devon Arsenault: It's got to stay close to the client, probably have to leave those things on prem. There are things with compliance. I need my data. I need it in my data center. I can't have it out in a public cloud. So there are certain instances where it, it does lend itself to staying on prem and you can start looking at hypervisor solutions that support those, those particular workloads, but I think the most important thing is to look at it from a workload to workload perspective, which requires time. It's not something you can do quickly.
[00:19:13] Christian Rolland: No, it's a great it's a great point of, You know, there are real world problems, primarily being the financial problem first and foremost, right?
[00:19:23] Christian Rolland: Which is the 1 that's going to hit everyone come renewal time. And, and I think the, the, obviously the knee jerk there is, well, we're going to, we're going to find something else. Cause in the tech world, we're used to finding the bigger, better, faster, cheaper, option. And, you know, in the world of hypervisors, the options really are pretty limited.
[00:19:42] Christian Rolland: And with the integration they have with. With third parties, et cetera. and, but I, But I hear the positive message here, right? Instead of the sensationalizing the issue. It's more about number one, re evaluating your [00:20:00] workloads, making sure that the workload is placed at. In the right place in the, in the, you know, right on prem, off prem, does the application need to be modernized?
[00:20:12] Christian Rolland: There's probably a chance for some optimization when it comes down to you know, overall workload placement and the licensing that you need, right. Reducing that footprint is as you called out, you know, likely are the knee jerk reaction of, you know, Hey, get off of it and move away may, may not be the right thing to do.
[00:20:36] Christian Rolland: How, how do customers start this process? I mean, you said it takes time. It's long and arduous. Sometimes when you think about the applications, you have everything from, you know, production applications to in house development. How do you systematically go through that?
[00:20:55] Devon Arsenault: Yeah. So, one of the, one of the key things,
[00:20:59] Devon Arsenault: is getting a task force together probably internally. This is not an infrastructure or an operations team discussion that can be done in a vacuum. This is a discussion that needs to bring in vendor management, needs to bring in your security teams and your compliance teams, your application teams, again, to help you.
[00:21:23] Devon Arsenault: Probably have some dependencies on VMware that you may not even be aware of. And, when you're talking about something that big, you really need executive sponsorship as well. So, it's a, it's a workshop type thing where, you need to get all the people in the room and you need to start, you know, Identifying your applications, identifying your, your critical business, critical applications and work on those first and really set some scope around requirements for those particular applications.
[00:21:58] Devon Arsenault: think the most important [00:22:00] thing that you can do, as you're going through these applications is if you have that scope and requirements is to eliminate options as quickly as possible. It gets very easy to get hung up on all of the different options that are out there and waste a lot of time going down rabbit holes that you didn't have to go down.
[00:22:23] Devon Arsenault: So, defining your requirements for your applications and, then being very strict as you evaluate. Different options will save you a lot of time in the long run.
[00:22:37] Christian Rolland: Fantastic. And kind of that philosophy that you're talking about.
[00:22:41] Workshop Offerings and Final Thoughts
[00:22:41] Christian Rolland: That's something that you can find in, in our workshop, right?
[00:22:44] Christian Rolland: So if you're going to e360.com/wmware-workshop. You'll be able to find out a little bit more about, about that offering, about taking, you know, look, taking that holistic approach, learn how we can go through and evaluate, you know, workload by workload and really, you know, Take into account the business and the technical decisions that go along with that.
[00:23:12] Devon Arsenault: Yeah. That workshop, it's an important first step. It's a first step. From that workshop, we can kind of. We can get our resources on our end because obviously we've got a great DevOps cloud team that can help out with application modernization. We've got our resources that have expertise in all sorts of different hypervisors and hyperconverged solutions, as well as help with software as a service offerings for different applications.
[00:23:47] Christian Rolland: Fantastic. Well, I know we're coming up on time here, but are there any final thoughts that you have for, you could share with, you know, anyone listening to, to this [00:24:00] particular podcast, you know, how to approach this guidance, any words of wisdom, if you will, that you can share with our, our audience here.
[00:24:10] Devon Arsenault: Slow down.
[00:24:12] Devon Arsenault: Slow down that I honestly, we, we have so many clients that are just looking to, you know, shoot VMware, get them out of the, the data center and, and move on with another solution. Slow down, there's probably things you're not thinking of, as you're looking to, to just rip and replace with VM. It is still the, it's the, it's the number one server virtualization technology for a reason.
[00:24:39] Devon Arsenault: So, slow down, make sure you've thought of everything before you just rip and replace.
[00:24:46] Christian Rolland: Those are, those are some very wise words, and definitely from someone who's been there and done that before, a few different times with our customers.
[00:24:55] Christian Rolland: Amazing words of advice, Devon, I want to thank you very much for being able to spend the time with me and share with our customers, and prospects, everyone who's listening to this podcast really. what this is all about.
[00:25:09] Christian Rolland: Absolutely.
[00:25:10] Christian Rolland: There's a lot of hyperbole, a lot of hype. It is a fluid situation seems to change by the week, if not by the hour sometimes.
[00:25:21] Christian Rolland: And looking past it, slowing down, making wise decisions, having a methodical approach.
[00:25:27] Christian Rolland: All of those are some great, you know, great processes and, philosophies to have, to be able to successfully navigate this change and really all of our worlds as we look forward, whatever the technology we end up choosing may be.
[00:25:43] Christian Rolland: So Devon, thank you again. We appreciate it.
[00:25:46] Closing Remarks and Podcast Wrap-Up
[00:25:46] Christian Rolland: That wraps up today's tech podcast series, Modern Infrastructure edition. Stay tuned until next time. We'll see you again. I'm Christian Rolland. There's Devon. Thank you. Bye [00:26:00] bye.
