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VMware transition to subscription, end of sale of perpetual licenses

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Re: VMware transition to subscription, end of sale of perpetual licenses

#91

Post by phpisthebest »

ceroxylon wrote: post #87
bigstrat2003 wrote: post #43

Ah, I see that Broadcom is working on speedrunning the "lose all your customers" game. Not what I would do if I dropped eye watering sums of money to purchase those customers, but you do you, Broadcom.

AVGO is up 93% YTD, 4% on the day, the investors don't seem to be too afraid of the move, for some baffling reason.

Because they know no one is going to be swapping HV out that fast.

Most likely people will wait for a hardware refresh to make a change, if they change at all to that will be 2 to 7 years the increased rates

and we have no idea what the increase rates will actually be, if it less than 2x most company will just eat it, that would still be cheaper than switching for many

2-4x, you will see an aggressive change in the next 12-36 mos by many customers

over 4x any you might see the aggressive pull out people are are expecting by this announcement.

Re: VMware transition to subscription, end of sale of perpetual licenses

#92

Post by Nux »

rwmj wrote: post #41
pierrelf wrote: post #35

Earlier quoted context omitted.

I was at the Apache Cloudstack conference just a few weeks ago and it seems most of the integrators are pivoting to moving VMware customers to KVM + CloudStack, and have even upstreamed an auto conversion tool. https://cloudstack.apache.org/

Are they using virt-v2v for conversions from VMware to KVM or something else?

Virt-v2v indeed and thanks for that btw.

Re: VMware transition to subscription, end of sale of perpetual licenses

#93

Post by blagie »

mynameisvlad wrote: post #84
avar wrote: post #83

Earlier quoted context omitted.

If they were customer focused they'd focus on cutting their profits to give lower prices to consumers. Did you hear about the CEO that told institutional investors that the company missed projections, but that they shouldn't worry about it because he'd help them order a pizza? Me neither, but it shows how absurd this sort of story is if the shoe were on the other foot.

Disagree. Customer support is not free. Good customer support is not cheap. Whether you agree or not, good CS is one of the Zappos differentiators. There are outlets for cheap shoes (in this case) without overhead from support and other sources.

Quite often, higher-profit higher-margin businesses are more robust. If you have a 1% margin, and costs increase by 2%, you're bleeding money.

If you have a 50% profit margin, you're not sensitive to small (or even medium) fluctuations.

That's not a universal. I can give a half-dozen counterexamples (including Walmart) which, for example, operate with extreme efficiency, or achieve massive scale. But it's a good rule-of-thumb.

Running a business, there are sometimes more important things than profit. Robust businesses are more pleasant to run and to work in than ones with razer-thin margins (even if bigger and more profitable). As an entrepreneur, if I were to pick:

1) Guaranteed income of $200k for the rest of my life (inflation-adjusted) with fun work and reasonable work-life balance

2) A $20M payout with 50% odds

I think I'd pick #1.

Ergo, we see a lot of lifestyle businesses, businesses which don't try to grow, or otherwise. Yes, one can make a lot of arguments about fiduciary duty, shareholders, etc. Some of those are even correct for a large, public corporation. But most don't apply to a founder-owned founder-run business.

Re: VMware transition to subscription, end of sale of perpetual licenses

#94

Post by sangnoir »

mynameisvlad wrote: post #85
ARandomerDude wrote: post #75

Earlier quoted context omitted.

Amazon Prime is a subscription though. It seems Amazon and VMware are in many ways similar in that regard.

Just because the two both use subscriptions doesn’t mean their business models are in any way similar. JetBrains, for instance, also does subscriptions. They are generally lauded as doing them right. I would never compare JB to Amazon or VMWare just because they both do subscriptions.

To be fair, JetBrains did attempt to get rid of perpetual licenses too at one point, the plan they backed away from - after massive blowback - was to brick customers' IDEs as soon subscriptions lapsed.

Re: VMware transition to subscription, end of sale of perpetual licenses

#95

Post by bigbuppo »

Standard business model. Buy a company, lay off everyone, do no new development, move to a subscription model, keep shifting the decimal point every year or two, and by the time you're down to two customers, who cares because you're raking in a million dollars a minute.

A big hearty fuck you to all the regulators that allowed this to go through. You are derelict and negligent in your obligations to protect the public.

Re: VMware transition to subscription, end of sale of perpetual licenses

#97

Post by blcknight »

fifteen1506 wrote: post #61

I don't know how managers aren't paying for RedHat products excitedly. It's the only business which competes with itself and where an acquisition by a private equity firm will, by the application of the typical strategies, destroy it's own customer base in days. Not like open-source won, more like proprietary eats itself.

They are, but Red Hat is driving people to kubevirt which I’m not sure is ready for all vsphere customers. But it totally makes sense for anyone wanting to make the container journey eventually.

Re: VMware transition to subscription, end of sale of perpetual licenses

#98

Post by natbennett »

happytiger wrote: post #72
fxtentacle wrote: post #67

Soon we will have reached the point where software piracy is the only way not to build your company on digital quicksand. I sincerely hope we never get there because it would ruin the commercial software market, which did produce amazing tools in the past. But by now, it certainly looks like major participants are boosting their last remaining quarters (before the company implodes) by scorching the earth they walk on…

It’s could be a great day for Open Source software. Maybe we need to adapt Open Source so that cloud providers who use it have to pay for continued development instead of just using it for free or putting a control panel on top of something and calling it their own product, but that’s the solution we came up with the first time proprietary software vendors started trying to lock the universe down into perpetual upgra…

This is already the case in at least some large, boring businesses. Think like bank IT departments. There’s a whole generation of CTOs out there whose mentors got fucked over when Oracle pulled almost the exact move that Broadcom is pulling with VMware. Some of those people have billion dollar budgets and serious religion about OSS.

I kinda don’t think it’d be possible to build a business like VMware’s today tbh. Certainly not after Broadcom is done with them.

I think the thing to watch here is Tanzu. In theory most of the software under that brand has an off ramp onto some other vendor. It’d be painful (ripping OpsManager out of a TAS installation is no joke) but basically straightforward technically for the right person at the right price.

Re: VMware transition to subscription, end of sale of perpetual licenses

#99

Post by al_borland »

avar wrote: post #83
al_borland wrote: post #68

Earlier quoted context omitted.

At most companies it is an uphill battle to advocate on behalf of the customer. It's really important that those values start at the top, and get support at all levels of management. The best story I heard on this was from Zappos and Tony Hsieh. Zappos was famously customer focused (which probably played a big roll in Amazon acquiring them). The story goes that after a night of drinking they had someone call Zappos t…

If they were customer focused they'd focus on cutting their profits to give lower prices to consumers. Did you hear about the CEO that told institutional investors that the company missed projections, but that they shouldn't worry about it because he'd help them order a pizza? Me neither, but it shows how absurd this sort of story is if the shoe were on the other foot.

Low prices are not the only thing customers care about. They are a factor, but not the only factor. A company that has the lowest prices, but does so at the expense of customer service, and various other factors, will likely be hated by consumers. They might get some business, but customers will curse them while handing over their money, and the second something better comes along, the customers will leave.

Costco shareholders were very vocal with the founder of Costco, wanting him to do things that were against the mission of the company, all in the name of making a quick extra buck in the short term. He told them to get bent, and Costco has a lot of die hard fans who will defend Costco until their dying breath. You can't buy that kind of loyalty with some extra profit after treating customers like shit.

And obviously, if a company is going to spend extra for excellent customer service, the business needs to be able to support that. Operating at a loss, thinking they'll make it up on customer service, is not a business plan. That isn't what we're talking about here.

Re: VMware transition to subscription, end of sale of perpetual licenses

#100

Post by chii »

ljm wrote: post #64
natbennett wrote: post #24

You know, I always used to think that e.g. Amazon talking about “customer obsession” was stupid. Of course a business is focused on its customers? That’s where the money comes from? Then I got to see the conversation about subscriptions at VMware. The storyline was always “wouldn’t it be great for us if we switched to subscriptions? Look how good all the math gets!” The customer barely appeared as a background charac…

I read The Messy Middle some time ago, which mostly documents the process of Behance's CEO joining Adobe post-acquisition and then switching their entire suite of products over to their new subscription-based model, Creative Cloud, and sunsetting their perpetual license model. This is described in the book as a fantastic achievement for Adobe but one that was quite difficult to get off the ground. On reflection I do…

> it was done entirely at the expense of the customer and their experience.

this is what it means to be a monopoly.

Adobe may not be one by the legal definition, but it certainly is a monopolistic suit of products, as their "customer" does not have a way to switch, regardless of other competing software.

I personally think that the current legal idea of a monopoly is too narrow. I say the definition should be focused on the customer's cost of switching - and if it's higher than some reasonable threshold, the provider of said service/product must be considered a monopoly.

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