‹ All episodes

The Cloudcast

The $69B bet against replacement

March 31, 2024 Massive Studios
The $69B bet against replacement
The Cloudcast
More Info
The Cloudcast
The $69B bet against replacement
Mar 31, 2024
Massive Studios

Let’s dig into the mindset behind the VMware price increases that have been happening since Broadcom acquired the company in 2023. 

SHOW: 808

CLOUD NEWS OF THE WEEK - http://bit.ly/cloudcast-cnotw

CHECK OUT OUR NEW PODCAST - "CLOUDCAST BASICS"

SHOW SPONSORS:


SHOW NOTES:


BROADCOM IS FITTING VMWARE INTO THEIR BUSINESS MODEL

  • At least with acquisitions, Broadcom has a well-defined set of business metrics they expect from their companies
  • Broadcom acts somewhere like private equity in terms of investment, innovation, revenue generation

IT'S A BOLD STRATEGY BROADCOM, LET’S SEE IF IT PAYS OFF FOR THEM

  • In essence, the bet is that there is no replacement for VMware in the Enterprise
  • The timing is interesting with the shifting of budgets for AI projects
  • It puts customers in a position to pay more for limited upside, but having to distinctly cut other areas of their technology budget (risk the business)
  • Customers have some options, but again they risk the business (e.g. hold off on security patches)
  • Once a company accepts the new pricing, what guarantees are there about no additional big increases in the future? 
  • How much will this impact the longer-term vendor-customer relationship?

FEEDBACK?



Apple Podcasts Spotify Amazon Music Podcast Index Overcast Stitcher +
Show Notes

Let’s dig into the mindset behind the VMware price increases that have been happening since Broadcom acquired the company in 2023. 

SHOW: 808

CLOUD NEWS OF THE WEEK - http://bit.ly/cloudcast-cnotw

CHECK OUT OUR NEW PODCAST - "CLOUDCAST BASICS"

SHOW SPONSORS:


SHOW NOTES:


BROADCOM IS FITTING VMWARE INTO THEIR BUSINESS MODEL

  • At least with acquisitions, Broadcom has a well-defined set of business metrics they expect from their companies
  • Broadcom acts somewhere like private equity in terms of investment, innovation, revenue generation

IT'S A BOLD STRATEGY BROADCOM, LET’S SEE IF IT PAYS OFF FOR THEM

  • In essence, the bet is that there is no replacement for VMware in the Enterprise
  • The timing is interesting with the shifting of budgets for AI projects
  • It puts customers in a position to pay more for limited upside, but having to distinctly cut other areas of their technology budget (risk the business)
  • Customers have some options, but again they risk the business (e.g. hold off on security patches)
  • Once a company accepts the new pricing, what guarantees are there about no additional big increases in the future? 
  • How much will this impact the longer-term vendor-customer relationship?

FEEDBACK?