VMware: Simplification of Business, Portfolio Innovation, and Ecosystem Standardization
Changes are never easy, especially after VMware‘s acquisition by Broadcom. These changes were necessary to reshape the business of the VMware Cloud Foundation department and provide faster innovations with more value for customers, as well as better profitability and market opportunities for partners. What has changed after the acquisition, and how will your company benefit from it?
Transition to subscription licensing, now an industry standard
Radical simplification of our portfolio, go-to-market strategy, and organizational structure to streamline business transactions with us
Standardization throughout our ecosystem to create value through distributors/resellers, cloud service providers, hyperscalers, and technology partners
Business Transformation: A strategy summarized in one word – simplification
In summary, we have completed the shift from selling perpetual software licenses to subscription licenses, optimized what, how, and through whom we will sell our software in the future, and reorganized internally around our VMware Cloud Foundation strategy to enhance implementation efficiency.
Firstly, subscription licensing is the model used by all major enterprise software providers today. Subscription software is the right model to drive continuous innovation for customers. Last quarter, we, like everyone else, completed the full transition to subscription software. We immediately turned this transformation into a new net value for our customers. How? Looking for deployment flexibility? Now you can have it. When you acquire VMware Cloud Foundation, you get license portability. This means you can deploy on-premises and then transfer your subscription to a supported hyperscaler or VMware Cloud Services Provider environment at any time. You retain your license subscription during the transition. Google Cloud will be the first company to support license portability for VMware Cloud Foundation, with other hyperscalers and partner clouds expected to follow suit. Read the full Google Cloud announcement here.
What about this portfolio? Offering some offerings that are more affordable at the top end and provide more value at the lower end for the same or lower price is economically sound for customers, partners, and VMware. We are investing all of our R&D investments in fewer offerings, which is a double win for customers. Lastly, we have integrated all product teams into the VMware Cloud Foundation department. We are now better positioned to provide a single, integrated product for all core technologies, with a unified vision for the future of the VMware Cloud Foundation platform. Additionally, we have professional services and global support practically located next to R&D in the same business department. This allows us to focus on developing a product with the services and support necessary to achieve the maximum benefit.
Three changes, but massive impacts.
Portfolio transformation: Driving an innovation engine
We are now focusing our innovation engine on VMware Cloud Foundation, VMware vSphere Foundation, and some very strategic add-ons in the areas of security, ransomware protection and recovery, application platform services, and private AI.
VMware Cloud Foundation helps companies modernize their infrastructure with the best total cost of ownership. It is fully software-defined computing, networking, and storage with automated and streamlined operations. VMware Cloud Foundation enables a cloud operating model that combines the benefits of a public cloud with the security and performance of an on-premises private cloud. VMware Cloud Foundation provides developers with a self-service private cloud experience that leads to higher productivity. Development teams can leverage the embedded Kubernetes runtime and a self-service cloud consumption interface to deploy infrastructure as code. This results in smooth deployment of business-critical and cloud-native applications. IT teams can maintain security compliance by integrating security into policies deployed with each cluster. VMware Cloud Foundation provides enterprise-level resiliency and security. Customers can seamlessly scale infrastructure and applications across a hardened platform with integrated resiliency to ensure mission-critical apps are always available. The inherent security integrated into VMware Cloud Foundation significantly reduces the attack surface for lateral threats, and our emergency and ransomware recovery features help customers quickly and efficiently recover from cyber threats.
Despite all these changes, we have not stopped being innovative. Here are updates for both the core platform and our additional services that we have recently made available or will deliver by the end of the remaining second quarter of the fiscal year 2024 from Broadcom.
Improvements to the VMware Cloud Foundation Core Platform
Automation for infrastructure and application services: In response to the growing need of VMware customers to deploy and support next-generation cloud-native and AI-assisted applications in their private and hybrid clouds, we are announcing three new automation features:
Automation for data services: VMware Cloud Foundation is now available, offering a native infrastructure automation and management experience for data services. This allows IT to offer its teams self-service, enterprise-tested Postgres, MySQL, and Google AlloyDB Omni (Tech Preview) solutions that promote developer innovation, reduce IT costs, and ensure data stability. For more details, check out the blog here.
Automation for load balancing services: Through integrated VMware Cloud Foundation features, cloud administrators can offer application teams self-service access to L4-L7 load balancing services. This enables application and infrastructure teams to implement load balancing immediately at the time of application deployment with minimal expertise in load balancing technology or the need to create manual tickets. These features will be available in a few months to support the VMware Avi Load Balancer add-on.
Automation services for private AI: Customers can leverage the features integrated into VMware Cloud Foundation to automate the setup of private AI services and deploy GPU-enabled machines for ML workloads when VMware Private AI Foundation with NVIDIA add-on becomes available later this quarter.
Integrated network operations features: The latest integrated network operations features offered exclusively as part of VMware Cloud Foundation help IT users improve their network transparency, gain insights into network performance, and quickly identify and resolve network issues. These new improvements are available today. Learn more about them here.
Updates for VMware Cloud Foundation Add-On Services
Unified ransomware and disaster recovery: With VMware Live Recovery, customers can protect applications and data from modern ransomware and other disasters in on-premises and public clouds, with flexible licensing for changing business requirements and threats. VMware Live Recovery will merge existing features of VMware Cloud DR, VMware Ransomware Recovery, and VMware Site Recovery Manager, and add new features such as enhanced vSphere replication (1-minute RPO) and seamless extension of on-premises disaster recovery to the public cloud with ransomware recovery. All of this will be delivered with a unified management experience and will be available through a single add-on subscription for VMware Cloud Foundation expected to be available in the second quarter of fiscal year 2024.
VMware Private AI Foundation with NVIDIA: Revealed at VMware Explore 2023 in Las Vegas, VMware and NVIDIA are working on delivering this new add-on service for VMware Cloud Foundation. We are almost there, and you can expect an update on the solution’s availability later this quarter. But you don’t have to wait to learn more. Join the team’s AI Field Day 4 online from 8:00 to 10:00 PST on February 21st to get an update on the features we are advancing and the use cases we believe arise for VMware Private AI Foundation with NVIDIA.
Ecosystem Transformation: Standardization for a better experience
Broadcom’s strategy is to drive the adoption of our full-stack VMware Cloud Foundation as the best subscription-based private cloud platform for innovation. We will heavily rely on our partners to transition our broad customer base to the new subscription model and help them reshuffle their business with our private cloud infrastructure. This quarter, we welcome thousands of partners from all distribution channels to the Broadcom Advantage Partner Program.
In the channel, we are standardizing pricing so that everyone knows what to expect, all partners have equal conditions, and partners compete through value-added differentiation. This will lead to a better customer experience. We have also implemented a new customer segmentation model aligned with our simplified portfolio strategy. Here are some key things you should know about our customer segmentation model:
Partners have opportunities in all segments, including the strategic segment.
VMware will maintain closer direct relationships with its most strategically important customers to accelerate the adoption of VMware Cloud Foundation at these customers.
For Broadcom, it makes business sense to maintain close relationships with its most strategic VMware customers to ensure that VMware Cloud Foundation is adopted and utilized, providing customer value. However, we expect there to be a role change in accounts that needs to be worked through to ensure that both Broadcom and our partner strategic customers derive the greatest benefit and impact. And partners will play a crucial role in creating value that goes beyond what Broadcom can offer. VMware Cloud Service Provider partners will help make VMware Cloud Foundation accessible to an even larger number of enterprise and commercial customers, providing it as a Managed Service. And since not all customers are ready to adopt VMware Cloud Foundation, our thousands of reseller partners will drive the adoption of VMware vSphere Foundation. In the enterprise segment, we support co-selling with our CSP partners. And our commercial segment is 100% owned by reseller partners and led by them. This should help reduce channel conflicts, which according to partners have been a constant challenge.
Good business hygiene is never easy. When you acquire a company, you look at everything. Broadcom identified things that needed to be changed and as a responsible company, it swiftly and decisively implemented these changes. The changes that have taken place in the last 60 days were absolutely necessary. We understand that this massive transformation and simplification of the portfolio and our business model have raised many questions and concerns while you continue to examine how to maximize the value of your VMware software investments. We are proactively working with sales teams and distribution partners to support customers in this transition and encourage them to collaborate with us to develop the best approach for their business. One thing has not changed: the value we bring to you, our customers. You are the reason we develop and deliver great software. You are the engine of our innovation. The new VMware Cloud Foundation is the best platform for deploying a private cloud infrastructure that is ubiquitous, flexible, and integrated across cloud endpoints. It can only get better.
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https://news.VMware.com/news/VMware-by-broadcom-business-simplification