Can confirm a current Broadcom VMware customer went from $8M renewal to $100M • Hacker News Board

Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M

#71

Post by biorach » Mon, Feb 26, 2024, 11:41 AM UTC

alephnerd wrote: post #63

biorach wrote: post #48

Earlier quoted context omitted.

> 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.

I think the strokes are a bit too broad for meaningful conversation

Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M

#72

Post by alimbada » Mon, Feb 26, 2024, 11:42 AM UTC

hnthrowaway0328 wrote: post #6

I guess no way there are going to pay that many. Maybe a huge discount and they are looking for a way out in a year or so?

They paid: https://twitter.com/cioontherun/status/1761882689886433742

Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M

#73

Post by alephnerd » Mon, Feb 26, 2024, 11:44 AM UTC

miki123211 wrote: post #67

alephnerd wrote: post #44

Earlier quoted context omitted.

> 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?

I can't exactly. The Enterprise SaaS industry is very small. Ask around over drinks during a cyber trade show like RSA or Blackhat.

I can say this is a company where the CRO "left".

Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M

#74

Post by alephnerd » Mon, Feb 26, 2024, 11:46 AM UTC

biorach wrote: post #71

alephnerd wrote: post #63

Earlier quoted context omitted.

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.

I think the strokes are a bit too broad for meaningful conversation

It's Sales and Pricing - there isn't a predefined curriculum around this.

Most of this is tribal knowledge you learn working a Field facing job.

Like I've said before, talk to SEs, AEs, and TAMs at your employer. They can confirm similar strategies and numbers.

Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M

#75

Post by brazzy » Mon, Feb 26, 2024, 11:47 AM UTC

alephnerd wrote: post #11

biorach wrote: post #8

Earlier quoted context omitted.

$8m doesn't cover retention (what retention?) and support? Not sure that makes sense.

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

> With the level of revenue VMWare had, it's realistic to assume mean deal size is in the 8-9 digit range.

8 million is quite close to the low end of 8 digits. And at the high end of 8 digits, your assumption woud already mean they have only a few hundred customers in total, which is about as far from "realistic" as can be.

Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M

#76

Post by boring-alterego » Mon, Feb 26, 2024, 11:52 AM UTC

what-the-grump wrote: post #34

danpalmer wrote: post #18

Earlier quoted context omitted.

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?

Not really. On the smaller scale there was no reason outside of familiarity to run VMware over hyper-v. This will be a shift for on-prem deployments. For cloud solutions running VMware in AWS/Azure, unless those renewals go up significantly, most of VMwares mrr is already locked in and the people running these setups generally refuse to learn how the cloud works so it’s a pure lift and shift mentality. But the patter…

On prem deployments at my sites swapping to hyper v prior to renewal with VMware. We saw the writing on the wall after what broadcom did to us when they bought Symantec.

Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M

#77

Post by RedShift1 » Mon, Feb 26, 2024, 11:52 AM UTC

vardump wrote: post #68

RedShift1 wrote: post #46

Earlier quoted context omitted.

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?

Yes

Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M

#78

Post by alephnerd » Mon, Feb 26, 2024, 11:55 AM UTC

rwmj wrote: post #61

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?

$8m is chump change in the Enterprise SaaS/cybersecurity industry.

AV or Endpoint spend at a F1000 is around that much alone.

A backbone vendor like VMWare can and does charge 4-6x more ime.

Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M

#79

Post by xav0989 » Mon, Feb 26, 2024, 11:55 AM UTC

vardump wrote: post #68

RedShift1 wrote: post #46

Earlier quoted context omitted.

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?

It has a live migration feature so I’m going to go with yes.

Re: Can confirm a current Broadcom VMware customer went from $8M renewal to $100M

#80

Post by d1sxeyes » Mon, Feb 26, 2024, 11:59 AM UTC

rwmj wrote: post #61

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?

So if you have a customer (A) whose current business is worth $80M to you, and you have a customer (B) whose business is worth $8M to you, you might look to consolidate some of your operations to try to get $88M of value out of customer A with less expenditure than you need to lay out to get the $8M from customer B.