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VMware outsourcing their support
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Re: VMware outsourcing their support
#12Proxmox added VMware VM imports to their product. They must be doing well because of the purchase by Broadcom. Hahaha.
Our VMWare bill went from $66 to $3600 this year (just a dozen VMs). Next year we will be using ProxMox.
It must be possible to milk this "dumb" investor money - which directly destroys the bought goods in the long run. Basically you create two teams. Team A develops a business version of a open source-good. Team B works on that open Source good.
Team A gets acquired. The product destroyed. Team B now founds a company becoming Team A, while Team A forks the open source product and keeps the game going. Its a ton of migrations, but you could get wallstreet to donate to open source as a business strategy.
Re: VMware outsourcing their support
#13Broadcom must have the most idiotic management from all the large tech companies. Everybody understands you buy a company to recoup the investment, streamline operations and push forward with new markets. But do you have to increase license prices by three times within the first quarter of an acquisition? Drop all free licenses that allowed for learning of your technologies? Even professionals with years of experienc…
The view of Broadcom is that VMWare has low growth potential and the route to maximum short term financial returns is to extract as much money as possible from the largest customers.
So the strategy is to squeeze the 600 largest customers until they bleed, knowing they are so entrenched they cannot easily migrate. If the next couple of thousand stuck around as well that would be nice, but not essential. The long tail of hundreds of thousands of customers paying a few dollars a month they would gladly be rid of.
Re: VMware outsourcing their support
#14Earlier quoted context omitted.
If you look at its history, Broadcom is a financial acquisition company that operates in technology. I think Tan's position is: these are (mostly) mature technologies and should be horse traded like financial assets. Got lucky with the LSI Logic design team and Google TPU's. Presently $8 bln/yr I understand. Although such serendipity increases when you're able to buy everything you see. With the exception of Qualcomm…
Let's see how that turns out for them this time. This was last year but buy now is probably 5 in 5...: "1 in 5 VMware customers plan to jump off its stack next year" - https://www.theregister.com/2023/11/08/vmware_customer_forre...
They want 1 in 5 VMWare customers to jump. If they don't, they'll be forcibly pushed off of the edge. Broadcom's entire growth model is to take an established player that is entrenched in massive corporations, introduce that product to the existing portfolio Broadcom offers that customer, and then jack the price on the lot. If you're not in the Fortune 500, Broadcom doesn't want to talk to you and if they keep your business at all it'll be through digital sales or third party resellers.
I am not a fan of them and didn't like working for them, but their financial results speak for themselves. You can attack the ethics of Tan's leadership certainly, but to call him an idiot ignores the fact that he's doing exactly what his shareholders want. Growing the company at obscene returns.
Re: VMware outsourcing their support
#15It is somewhat smart capitalism, drive up the prices extract as much money as possible as fast as you can and when product stops selling write it all off. Executives get their pay checks from options and investors see line go up for short time...
Re: VMware outsourcing their support
#165 Years ago VMWare support was, in my opinion, absolutely gutter.
Calling in for any questions was met with a support tech who was actively hostile and tried their best to find some way to disqualify our ability to get support. The first trick was always Hardware Compatibility List ("HCL") followed by interrogating us about software versions. Before I get the cries of pity about all the dumb users who waste their time by not upgrading, we probably opened support cases twice weekly - and the same verification interrogation happened.
We'd routinely find situations where the stated support for SANs wasn't what it said, etc.
I'd have said it could not get worse, but reading what Broadcom is doing, I am convinced otherwise.
Anyone using VMWare for business critical things is likely in for both a huge pocket book hit and an even larger support headache.
Re: VMware outsourcing their support
#17Broadcom must have the most idiotic management from all the large tech companies. Everybody understands you buy a company to recoup the investment, streamline operations and push forward with new markets. But do you have to increase license prices by three times within the first quarter of an acquisition? Drop all free licenses that allowed for learning of your technologies? Even professionals with years of experienc…
The view of Broadcom is that VMWare has low growth potential and the route to maximum short term financial returns is to extract as much money as possible from the largest customers. So the strategy is to squeeze the 600 largest customers until they bleed, knowing they are so entrenched they cannot easily migrate. If the next couple of thousand stuck around as well that would be nice, but not essential. The long tail…
How do you know this is their view? I don't have any strong opinion or evidence to argue, but I'm curious if this is conjecture or inference or actual knowledge?
Re: VMware outsourcing their support
#18Earlier quoted context omitted.
Let's see how that turns out for them this time. This was last year but buy now is probably 5 in 5...: "1 in 5 VMware customers plan to jump off its stack next year" - https://www.theregister.com/2023/11/08/vmware_customer_forre...
They want 1 in 5 VMWare customers to jump. If they don't, they'll be forcibly pushed off of the edge. Broadcom's entire growth model is to take an established player that is entrenched in massive corporations, introduce that product to the existing portfolio Broadcom offers that customer, and then jack the price on the lot. If you're not in the Fortune 500, Broadcom doesn't want to talk to you and if they keep your b…
Unfortunately, an economy is now wholly peopled by shareholders, and the most important shareholders are usually the owners and corporate officers.
Software dev who's worked in both tech and finance. I don't measure things in just shareholder returns.
Re: VMware outsourcing their support
#19Earlier quoted context omitted.
Our VMWare bill went from $66 to $3600 this year (just a dozen VMs). Next year we will be using ProxMox.
It must be possible to milk this "dumb" investor money - which directly destroys the bought goods in the long run. Basically you create two teams. Team A develops a business version of a open source-good. Team B works on that open Source good. Team A gets acquired. The product destroyed. Team B now founds a company becoming Team A, while Team A forks the open source product and keeps the game going. Its a ton of migr…
I'm not sure this is appealing to wallstreet at all but this just describes the appeal of open source as a customer to me. VMware is a just perfect case example, they're literally firing paying customers and destroying a product lots of people are using to make a quick buck. The company and the product will ultimately be destroyed regardless of their underlying value but not before they make bank.
But if Vmware was open source they never would have bought it. The leverage being closed provides is the whole point.
Re: VMware outsourcing their support
#20Earlier quoted context omitted.
They want 1 in 5 VMWare customers to jump. If they don't, they'll be forcibly pushed off of the edge. Broadcom's entire growth model is to take an established player that is entrenched in massive corporations, introduce that product to the existing portfolio Broadcom offers that customer, and then jack the price on the lot. If you're not in the Fortune 500, Broadcom doesn't want to talk to you and if they keep your b…
Unfortunately, an economy is now wholly peopled by shareholders, and the most important shareholders are usually the owners and corporate officers. Software dev who's worked in both tech and finance. I don't measure things in just shareholder returns.
Nor do I, just saying "idiotic" is the wrong pejorative here. He's doing what he's being paid to do and doing it competently and successfully.