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

theregister.com

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

#41

Post by hnbear »

alephnerd wrote: post #13
nottorp wrote: post #7

Earlier quoted context omitted.

You hate they're speaking as (very snarky) humans? Corporate speak is better?

They are not snarky and they very gladly work with corporates as well. Look at all the sponsored content they have from ZTE, as well as all the Nutanix specific articles because of Nutanix .NEXT Snark is fine if you are evenhanded by being snarky about everyone, but it ain't great if you're clearly picking and choosing and deciding to take money from vendors.

They lost the fun snark and just went pissy and needlessly edgelordy 10 years ago.

It’s not the great site it was in the 90s anymore when it was fair, balanced and fun, along with having accurate news.

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

#42

Post by quickthrowman »

generic92034 wrote: post #23
cjk2 wrote: post #20

Earlier quoted context omitted.

I remember my father doing this one. He was an SME support company. With two clients. He cranked the price up 4x and said ”we’ve got them by the balls” . They both opened a tender process and shot him and he was bankrupt 6 months later.

> They both opened a tender process and shot him What does that mean?

They went shopping for a new vendor by sending out a request for proposal to multiple companies.

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

#43

Post by alephnerd »

karmarepellent wrote: post #37
alephnerd wrote: post #2

> he found the IT department using two hypervisors: Nutanix AHV, and ... VMware. The CTO felt two hypervisors was one too many and considered a consolidation Good move, and plenty more like this will happen. But like I've said before, the winners will be Nutanix, Citrix, and other existing enterprise infra vendors - not Proxmox. And companies like Broadcom are fine with that because market segmentation is a thing. (A…

> Good move, and plenty more like this will happen. What is a good move? Maybe I misunderstand what you are saying, but I thought the main lesson from the whole VMware fiasco would be that IT departments would not rely on a single vendor/hypervisor in the future. This consolidation just increases their dependence on Nutanix, does it not?

Consolidation is a good move, because it minimizes your overhead from a team management and procurement management basis.

Infra is a cost center at the end of the day.

> I thought the main lesson from the whole VMware fiasco would be that IT departments would not rely on a single vendor/hypervisor in the future

Can you justify spending 2x your hypervisor budget when that same pot of money could be used to hire more engineers who make the product the company is selling?

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

#44

Post by alpaca128 »

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!

Acquiring new customers would become quite difficult, though. If you increase prices to a point where everyone who can leave will leave, who in their right mind would choose your product and risk another price hike in the future?

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

#45

Post by alephnerd »

hylaride wrote: post #33
alephnerd wrote: post #2

> he found the IT department using two hypervisors: Nutanix AHV, and ... VMware. The CTO felt two hypervisors was one too many and considered a consolidation Good move, and plenty more like this will happen. But like I've said before, the winners will be Nutanix, Citrix, and other existing enterprise infra vendors - not Proxmox. And companies like Broadcom are fine with that because market segmentation is a thing. (A…

To be fair, the tone is supposed to be that way. It was designed as a UK-tabloid style IT news source, which have informal and opinionated tones (I don't know if it was originally done in jest or not). The fact that it publishes in a low-brow, combative style in an industry that is (historically, anyways) mostly educated is part of the "joke", especially has most other tech press at the time it was created in the 199…

The issue is these old school blogs aren't some random dudes eating ramen who love technology for the sake of technology anymore.

They are now owned by press wire publishers and corporate conference owners, and as companies have increasingly moved away from both these options, the tone has become increasingly uneven.

Look at how much RSA flamed Palo Alto Networks for deciding to quit RSA and how Register never uses snark in the articles it writes with CEOs, leadership, or companies who invite Register to their conferences.

It's basically an attempt at extortion, not the truth. The practitioners who are technical don't write for these rags. And most of the Register's (and at all their parent companies publications) are non-technical journalists for whom this is a dayjob which they'll inevitably leave to become a Comm Marketer at a Vendor like the dozens I've worked with.

> especially has most other tech press at the time it was created in the 1990s had conflict of interest relationships with tech companies

So does The Register. I've literally wined and dined their writers at RSA years ago.

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

#46

Post by alephnerd »

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…

When you have a sticky existing customer who's about to churn, you end up discounting below the price of the migration, then slowly rise the cost again, then do the same thing again (this is easy because margins are 80% in our industry).

All vendors do this - you can't escape it. This is why companies began leaving for the Cloud - sure it's upfront more expensive, but the negotiations are not as protracted.

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

#47

Post by bombcar »

cjk2 wrote: post #20
pmx wrote: post #5

Earlier quoted context omitted.

This massively increases risk too, right? Pinning all your revenue on a much smaller customer base means losing one or two of them has a huge impact!

I remember my father doing this one. He was an SME support company. With two clients. He cranked the price up 4x and said ”we’ve got them by the balls” . They both opened a tender process and shot him and he was bankrupt 6 months later.

4x and in one go is too much for many to bear. If you do it at 25%-50% a year or so you can boil the frog with much more reliability.

Everyone and everything is replaceable. The question is if it’s worth it.

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

#48

Post by [deleted] »

averageRoyalty wrote: post #29
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 was a very reasonable name in 1978 when they started, as they provide stock and share services for companies via computers - something uncommon in that time.

[deleted]

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

#49

Post by prmoustache »

alephnerd wrote: post #21
pmx wrote: post #5

Earlier quoted context omitted.

This massively increases risk too, right? Pinning all your revenue on a much smaller customer base means losing one or two of them has a huge impact!

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.

In VM's case it is not that long really. It really depends how much priority you put into it.

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

#50

Post by p_l »

alephnerd wrote: post #21
pmx wrote: post #5

Earlier quoted context omitted.

This massively increases risk too, right? Pinning all your revenue on a much smaller customer base means losing one or two of them has a huge impact!

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 also can have resources to simultaneously negotiate you on price while starting 3 initiatives to "remove vmware ASAP".

F1000 can have sticker price shocks and sensitivity too, especially if you happen to raise your prices soon after other events that might have made them look into cost savings...

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