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Ripple effect from Broadcom-VMware buy spreads to vSAN

Broadcom claims changes to VMware's licensing model will offer increased flexibility, but storage competitors say it's a red flag and encourage customers to move on.

Broadcom Inc.'s acquisition of VMware has generated no shortage of angst among enterprise tech buyers, including customers of the vendor's virtualized storage, vSAN.

Competitors at every layer of the virtualization stack are warning customers to jump ship before contracts expire or products and services vanish. Their calls aren't unfounded, as Broadcom eliminated VMware perpetual licenses late last year. The company also cut the free edition of the VMware vSphere ESXi hypervisor last month, eliminating an SMB on-ramp to the larger VMware ecosystem.

Competitors to VMware's virtualized storage software, vSAN, claim VMware customers should brace for an increase in price and an upgrade to more powerful hardware to maintain performance. Broadcom said in a press release that it's instead looking to standardize and simplify VMware's licensing, pricing and portfolio of products, and that it will expand options for VMware customers by collapsing previously separate purchases into offerings available to all subscribers.

Despite the competitive doomsaying, many of VMware's enterprise customers are still sizing up their choices and considering if a move is necessary, said Dave Raffo, an independent storage analyst.

The vSAN product is just one part of the larger virtualization package sold by Broadcom. And many hardware vendors, including Dell and IBM -- as well as hyperscalers such as Microsoft Azure and AWS -- offer competitive virtualization services with a la carte buying options, including for storage, he said.

Raffo and other storage analysts expect the ultimate choice, regardless of cost grousing, will come down to executive comfort over the Broadcom sale and how tightly integrated VMware's technology is to an organization's core business needs.

"The decision will not be made at that storage level. [The decision] will be made [based on] if they're going to stick with that [VMware] virtualization layer or not," Raffo said.

Broadcom narrows focus

VMware's new catalog under Broadcom will provide just four subscription offerings with a handful of additional services. Subscriptions to either VMware Cloud Foundation or vSphere Foundation will still include vSAN. The two other subscriptions are strictly for vSphere capabilities and access.

Cloud Foundation provides most of the vendor's offerings, including the vSphere hypervisor and NSX networking. The vSphere Foundation subscription provides fewer features, including vSphere, vSAN and Aria multi-cloud management software. Cloud Foundation includes 1 tebibyte of vSAN storage per CPU core, while vSphere Foundation provides 100 gibibytes of storage per core.

These two offerings are also eligible for additional service purchases, such as Kubernetes management with Tanzu Intelligence Services for AIOps and IT automation, and additional vSAN storage capacity.

Prior fragmentation of VMware's offerings and wildly varying sales contracts can lead to market confusion, according to Prashanth Shenoy, a vice president of marketing at VMware. Customers think they're getting a better deal through perpetual licenses and a la carte purchases rather than a subscription service, but could end up over- or underprovisioning capabilities.

"Those are not apples-to-apples comparisons, [and] that's where people are having this perception around price increases," Shenoy said. "When you give the customers a lot of choices, the perception is good, ... but it makes it confusing and causes a lot of our customers to ask, 'What is the right choice for me?'"

The subscription license model provides more flexibility in terms of the amount of storage under vSAN management alongside portability across public cloud and hardware infrastructure, said Mark Chuang, head of product marketing for VMware Cloud Foundation.

The service also eliminates some of the previously split-up versions of vSAN, such as vSAN Max for disaggregated storage uses released last summer, Chuang said. Instead, customers of either Cloud or vSphere Foundation will have access to the entire spectrum of vSAN offerings.

"When we looked at our customer data and the latest feedback, we're seeing more and more of them say, 'Look, just give me the integrated experience. I don't want to have to go muck with all the different components,'" he said.

Left in the lurch

Broadcom claims its new subscriptions will lead to overall lower costs and less market confusion, but that hasn't stopped competitors from vocalizing a siren song of lower prices, less restrictive licensing choices and more deployment options.

[Broadcom] is in the business to make money -- and they're good at it.
Paul WozniakDirector of professional services, PBG Networks

Virtualized storage vendor StorMagic's SvSAN, its flagship hyperconverged storage offering, competes with vSAN. It targets SMB or MSP customers that want hyperconverged storage capabilities for lower-end hardware or smaller clouds, typically at the edge, according to the vendor.

Now, those same SMB and MSP VMware customers are being left in the lurch with the vendor's latest subscription changes, according to Paul Wozniak, director of professional services at PBG Networks, an IT consultancy based in New Jersey.

"[Broadcom] is in the business to make money -- and they're good at it," Wozniak said. "We don't expect [vSAN] to become cheaper."

Wozniak, who spoke during a recent webinar hosted by StorMagic, anticipates that smaller vSAN deployments will see a price increase. But those customers will have little recourse short of changing their entire virtualization technology, he said.

VMware's elimination of perpetual license sales means customers will need to brace for recurring costs in the future, including for services they might have previously integrated for free.

"For clients who thought they had a safe haven [with a perpetual license], that's not an option," Wozniak said.

A breakdown of how virtualized and container platforms split resources for applications.
Enterprises might stay with virtualized environments compared with containers due to maturity and capabilities for the foreseeable future.

2 virtualized roads diverge

When considering new virtualization software, customers will need to look at each component of the VMware infrastructure stack, which has a variety of commercial and open source alternatives, according to analysts.

SMBs might consider StorMagic for virtualized storage, while larger organizations could consider Nutanix or VergeIO, Raffo said. Dell Technologies' provides software-defined storage supporting HCI with PowerFlex.

Hewlett Packard Enterprise's GreenLake provides hybrid cloud virtualization alongside hyperscalers such as AWS and Microsoft Azure. Organizations looking to go open source could look into Proxmox Virtual Environment or Linux kernel-based VMs.

"A lot of the vendors that sell vSAN on their hardware have options if their customers are leery to the deal with Broadcom," Raffo said.

For customers choosing to remain with VMware, the simplification of VMware's product line into a handful of subscriptions could be a benefit in the long run, according to Ray Lucchesi, president and founder of Silverton Consulting. Eliminating additional purchases such as vSAN Max could streamline capabilities for organizations.

"The VMware of old used to have very different packages and items, all of which were cost-plus items," Lucchesi said. "I think it'll be better for the technology. Hopefully they'll keep it moving in the right direction."

VMware remains among the most mature and feature-rich virtualization platforms available, according to Marc Staimer, president and founder of Dragon Slayer Consulting.

Despite the media attention surrounding the Broadcom acquisition, the actual competition for VMware will come from a technology shift away from virtualization to containers, Staimer said.

Containers offer greater flexibility and capabilities at a lower cost, both financially and with minimum hardware specifications. The lack of maturity for most container offerings holds them back from wider enterprise adoption as containers lack features such as high availability, persistent storage and data protection, he said.

But that will change, and the rise of containers in the enterprise will continue as platforms mature. Until then, VMware's virtualization tech will likely stick around for most enterprises.

"Nobody lost their job from buying VMware," Staimer said.

Tim McCarthy is a news writer for TechTarget Editorial covering cloud and data storage.

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