Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

It looks a lot like VMware just lost a 24,000-VM customer

theregister.com

Post reply on HN
Print view View original

121–130 of 151 posts

Re: It looks a lot like VMware just lost a 24,000-VM customer

#121

Post by nunez »

croes wrote: post #119
helsinkiandrew wrote: post #4

> Steve McDowell, chief analyst at NAND research, told The Register that VMware by Broadcom is “laser focused on high-revenue, high-margin business” and has priced its wares “just below the pain threshold for customers they care about.” If you hike your prices by 10-15x, you only need 6-10% of customers to stay to maintain your revenue, reduce costs and massively increase profit margins!

But that's the way to become a niche product and not one of the standard supplier of VM solutions. They will lose reputation and reference customers.

Broadcom absolutely does not care about this.

Re: It looks a lot like VMware just lost a 24,000-VM customer

#122

Post by nunez »

yokaze wrote: post #38
alephnerd wrote: post #21

Earlier quoted context omitted.

Broadcom makes $35B a year in revenue. VMWare made at most $13.4B. Even with severe churn, VMWare would make around $12.8-13B. VMWare is just a BU now, not a company, and the economics of managing "just another product line" is different from a company with a flagship product As I've mentioned before on HN, the math is different and it makes sense to up prices and only concentrate on F1000s at that size. > Pinning al…

> Large customers are sticky. You can't migrate your hypervisor or cloud provider overnight. These are multi-year projects. Yes, but that scale, everything is an multi-year effort. The contracts likely as well. That doesn't mean, it's not going to happen. And it's not like all has to happen in one go. So before you were all in VMware, and that vendor is practically promising to hike up the prices to make you bleed. W…

VMware isn't just VMs. They are deep, deep, deep in the stack at some places. There isn't a realistic migration path away from VMware for the customers that Broadcom is interested in keeping. Or, put another way, the time it will take for those customers to move away from VMware (which they won't) will take Broadcom to make their money back on this acquisition a few times over.

Re: It looks a lot like VMware just lost a 24,000-VM customer

#123

Post by sofixa »

grubbs wrote: post #113
sofixa wrote: post #31

Earlier quoted context omitted.

They still force you into a specific hardware organisation (hyperconverged, disks are on the compute nodes and storage is distributed) which doesn't make sense for everyone's workloads. Also, at least a few years ago(hope it's not still the case), a lot of their services were a bunch of open source poorly stitched together with bash, and their poor abstraction over it was leaking heavily. Their APIs were also very po…

I believe it's all Supermicro hardware. We looked into it as well (higher ed) and it was just way too expensive for their NX servers with Intel Silver CPUs. I've heard stories that it's usually low cost to enter, but when you want more CPU/storage it's ungodly expensive. Even the initial quote for three hosts was ridiculous for the CPUs offered.

> Even the initial quote for three hosts was ridiculous for the CPUs offered.

And storage, a few years ago they were trying to convince us that their cache is soo good, you should use spinning disks with some SSD cache. Of course they wouldn't provide any concrete numbers, and even with hybrid storage and subpar CPUs, they were a decent chunk more expensive than traditional servers with better CPUs and a dedicated full flash SAN.

Add to that the subpar (even in their demos!) software with lacking APIs, and it just seemed extremely weird to see them getting business.

Re: It looks a lot like VMware just lost a 24,000-VM customer

#124

Post by meepmorp »

re-thc wrote: post #35
avidphantasm wrote: post #10

I admit to not understanding or caring about the full scope of Computershare’s business (side note: that’s a dumbass name), but having been forced to suffer their software when working for a former company, it boggles my mind that they need 24,000 VMWare VMs, in addition to a bunch of Nutanix VMs.

> it boggles my mind that they need 24,000 VMWare VMs Their whole business is based on computer sharing. There's a lot of microservices to make it happen.

Their business is providing stock transfer and related services to corporations, not computer sharing.

Re: It looks a lot like VMware just lost a 24,000-VM customer

#125

Post by oliwarner »

helsinkiandrew wrote: post #4

> Steve McDowell, chief analyst at NAND research, told The Register that VMware by Broadcom is “laser focused on high-revenue, high-margin business” and has priced its wares “just below the pain threshold for customers they care about.” If you hike your prices by 10-15x, you only need 6-10% of customers to stay to maintain your revenue, reduce costs and massively increase profit margins!

But we're talking subscriptions so the drop-off is recurring. You will have customers who will burden the cost while they migrate and ditch you as soon as they're done.

If you start celebrating your new pricing structure with just a 90% customer loss in Y1, you're in for a nasty shock in Ys 2-5.

That's before you factor in the shift of mindshare to alternatives. Pointing this thing at ultra-large customers means everyone else is using and training on something else.

Re: It looks a lot like VMware just lost a 24,000-VM customer

#126

Post by op00to »

Spooky23 wrote: post #77
alephnerd wrote: post #21

Earlier quoted context omitted.

Broadcom makes $35B a year in revenue. VMWare made at most $13.4B. Even with severe churn, VMWare would make around $12.8-13B. VMWare is just a BU now, not a company, and the economics of managing "just another product line" is different from a company with a flagship product As I've mentioned before on HN, the math is different and it makes sense to up prices and only concentrate on F1000s at that size. > Pinning al…

Don’t attribute this stuff to strategy. The people running “the BU” are just counting on friction to hold on to revenue. They aren’t able to even meet the commitments they make and are disrespectful to customers in other ways. I think they overestimated their market power. I have 2 years left on my main ELA. I have budget to spend 5x to exit. My spend will go from 8 figures to under $1M. Personally, I resisted the vi…

You can fuck up A LOT and retain customers if you're honest and truly working in the customer's favor. The absolute second a customer picks up that you're in it to simply pick their pocket, there will be nothing left but a customer shaped hole in the wall. I have been in situations where we've completely fucked a customer's business causing all kinds of financial damage and customers have stayed because we committed to making things right. I've also been in situations where hubris assumed a sticky customer isn't going to unstick themselves, and of course the customer left.

It's so much better business not to be an asshole. I really don't understand how people can't internalize this.

Re: It looks a lot like VMware just lost a 24,000-VM customer

#127

Post by dbspin »

smallnamespace wrote: post #59
dbspin wrote: post #8

Earlier quoted context omitted.

Also pretty much guarantees flight of your former customer base to close compliments - who then have improved revenue to bring their products closer in alignment to yours. You'd better have a hell of a moat to follow this strategy.

Tiny nitpick: complement means a good in an adjacent part of the supply chain (e.g. batteries and EVs are complements), you might have meant 'competitors'.

From the point of view of a customer, a complementary service would be a product that fits the same niche and is reasonably substitutable.

Re: It looks a lot like VMware just lost a 24,000-VM customer

#128

Post by markus_zhang »

alephnerd wrote: post #112
markus_zhang wrote: post #87

Earlier quoted context omitted.

However, would it be sensible to keep a small team on a different tech (in this case move everything to N but keep a small V team) so that when shit happens in the other side you have an immediate team to migrate everything to this side? (I'm thinking about MSFT who maintained a small Windows team when the majority effort went to OS/2 back in the 80s)

The MSFT case was R&D spend, but Infra falls under the Finance&IT bucket, where the available capital is much less.

I see. I guess the multi-cloud example you mentioned earlier makes more sense then.

Re: It looks a lot like VMware just lost a 24,000-VM customer

#129

Post by Bene592 »

sidewndr46 wrote: post #69
m0llusk wrote: post #36

Earlier quoted context omitted.

That is not a good comparison. NeXT was far more than "a BSD". It was a whole bunch of frameworks, development tools, applications, and a hardened team that had already ported to several other architectures. BeOS was still mostly vision at that point.

wasn't Next actually developed by the former CEO of Apple as well?

Yes, Steve Jobs was CEO of Next when they got bought

Re: It looks a lot like VMware just lost a 24,000-VM customer

#130

Post by hylaride »

alephnerd wrote: post #97
AtlasBarfed wrote: post #84

Earlier quoted context omitted.

You might be right, but at least it is SOME skeptical source to fight back against the unending gusher of marketing bullshit. The fact they may preferentially apply the snark based on "extortion" isn't great, but at least they are SOME voice, and like comedy some snarky sarcasm is often much more incisive that (shockingly) fluff. And considering the gushing amound of shadow-sponsored fluff in other magazines, aka the…

> is SOME skeptical source to fight back against the unending gusher of marketing bullshit. They aren't though. They are also marketing bs. If you work at a vendor, go slack your content marketing team for a coffee chat to understand how it works. This is the managing company for The Register [0]. We'd work with AMs at Situation Publishing to be looped to the right magazine (Register, Next Platform, Blocks and Files,…

You're complaining about the news/publishing industry in general, though.

As I mentioned earlier, the register isn't on my radar anymore and obviously sold out. In your original post, you had a hate-on with their tone, but it was their tone that (originally) made them refreshing. The discourse without it would be have reporting on corporate release announcements and various reviews by people who don't use the products day-to-day in their actual job.

Snarky tones about Larry Ellison needing yacht money or referencing whether a good or useful IBM product was worth having to deal with their aggressive sales people was the indications that the writers (again at one time) got or understood the industry.

Of course, that's not sustainable as a business model...

Anyways, my main point is that it's not the tone that's the issue, it's the publication industry for reasons that you stated.

Post reply on HN