I get that this is a deliberate strategy by Broadcom, but can someone explain how the strategy makes any sense? Broadcom apparently spent $69 billion to acquire VMware, so how does setting it on fire make sense financially?
Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
61–70 of 134 posts
Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
#62Earlier quoted context omitted.
> The strategy you described has no upside for the vendor (in this case Broadcom VMWare). It has. Product/brand trust matters ... the most obvious example being Google, who have had an extremely hard time getting their stuff to be actually used as they have shown time and time again that even if you're the biggest game publishers on this rock, you won't be able to rely on Google keeping up their end of any deal.
> Product/brand trust matters At Enterprise SaaS level it does not. You do not have an individual purchaser - the deal will be vetted by committee for 1-3 quarters. > most obvious example being Google, who have had an extremely hard time getting their stuff to be actually used Extremely hard disagree. GCP does well in enterprise/strategic accounts where a customer in some way competes with Amazon (which is around 20-…
[deleted]
Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
#63Earlier quoted context omitted.
Absolutely. When you reach VMWare size ($13.5 BILLION in revenue in FY 23), $8M is chump change. The margins on support might not make sense. With the level of revenue VMWare had, it's realistic to assume mean deal size is in the 8-9 digit range. > what retention TAMs, CSMs, constant PFRs, constant escalations, etc
> The margins on support might not make sense. Yeah, maybe. Without some real figures this is very speculative > TAMs, CSMs, constant PFRs, constant escalations, etc You seem to be assuming the customer takes up man-weeks or months of support and legal, not particularly typical for a repeat customer in that game - not sure how else you could account for the margin on $8m being completely eaten up So... speculative an…
This is my bread and butter.
These kinds of numbers are closely guarded for competitive reasons.
Go chat with the sales or account teams at your employer - they can confirm in broad strokes what I've mentioned.
Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
#64Cant wait to watch VMware die a slow death
Is there that much negativity towards VMWare? I got the impression they were generally liked by users? Still enterprise software, but good stuff, and not awful about their licencing like some other companies?
The software always was fairly horrible behind the scenes, albeit with a nice user interface. However I've spent years and years dealing with the sheer awfulness which is VDDK (https://libguestfs.org/nbdkit-vddk-plugin.1.html) which leaves a bitter taste.
Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
#65How much would it cost to build VMware from scratch?
Nothing because you can already use KVM + oVirt to get something which is reasonably close to vSphere's user interface for all but the highest end users.
Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
#66Cant wait to watch VMware die a slow death
There are people who have put their blood, sweat and tears into it. Never a good thing when something dies.
Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
#67Earlier quoted context omitted.
Do you have information not in the link? I don't see anything related to your comment. > This is basically a polite way to fire a customer. I'll throw out that raising the price like this is also a strategy to increase profit. In the absence of a source for your claim, I'll go with that instead. > Is that $8m worth it if in aggregate you spending an equal amount of time on that account as you are on a $20-30m account…
> Do you have information not in the link I do this for a living, first as a PM and now as a VC. These multiples are fairly common knowledge for anyone in Enterprise SaaS, and have have worked with accounts teams that have done this and have recommended similar strategies (at a smaller scale) to portfolio companies. > the person making them needs to be fired, and fast. They should have considered that they could hand…
> caused a big shitshow at a major cybersecurity startup recently that brought a federal investigation
Care to elaborate?
Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
#68Earlier quoted context omitted.
You can't really "build" VMware though. It's a proprietary hypervisor and ecosystem of interoperable products with tons of hardware vendor drivers. Building on KVM or even a new hypervisor would not get you 'VMware"
For 100M $ you can buy Proxmox, start advertising, scoop up all the lower end VMware customers and fill in the feature gaps according to customer demand over time.
Can Proxmox do things like vMotion?
Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
#69Called it ... 89 days ago.
Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M
#70Earlier quoted context omitted.
I mean, VMWare customers were warned about this ever since the deal got announced. This is literally the Broadcom strategy for the last decade at least: Buy vendor with lockin, cut non-core features, raise prices and squeeze the customers who are in too deep. Broadcom goes into these deals knowing it will hemorrhage a lot of customers and they don't care, they know they can make it up on those who are forced to stay.…
Customers were all expecting to get milked, sure. But the milking process usually tries not to kill the cow. Usually that means prices increasing by ~10% every year, so that it's never quite worth it to switch to an alternative system.
Sounds like customers were not familiar with how Mr Tan plays ball, he's been doing this forever. He isn't trying to kill the cow, he will famish the cow to the point where the cow will be alive enough for him to milk his required rate of return and not an ounce more. Its a risky strategy, but Tan is loved by Mr Market so he gets the benefit of the doubt.