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

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

#81

Post by badcppdev »

alephnerd wrote: post #25
AshamedCaptain wrote: post #19

Earlier quoted context omitted.

I have seen companies that would refuse to serve customers that had not been growing as expected. Literally. Bogles my mind.

Why? Margins matter, not just dollars alone. If you spend 75 cents to earn a dollar on one customer and can spend 25 cents to earn a dollar on another customer, you'd be dumb not to take customer 2.

It's a SAAS product why not take both customers. Don't leave breadcrumbs to feed your competitors.

It seems nobody can believe your assertion that a company would deliberately fire a profitable customer by quoting an x12 contract increase. There's no point asking me to talk to people in my business. You're going to have to point to publicly accessible resources.

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

#82

Post by throw0101b »

nodeman7 wrote: post #4

Cant wait to watch VMware die a slow death

> Cant wait to watch VMware die a slow death

Their strategy is to go after a few of the biggest organizations, and not a bunch of small mom-and-pop shops. Just like IBM with mainframes, which still seems to be profitable for them.

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

#83

Post by [deleted] »

bachmeier wrote: post #38
alephnerd wrote: post #7

This is basically a polite way to fire a customer. You don't want to sell to everyone - you need to make sure the cost of retention+support is significantly less than what they are paying. If a customer is too troublesome or spending too little (for a company like VMWare, a $8m contract is on the smaller end) this is the politest way to fire them. It sounds like this customer is a legal firm, which makes sense - they…

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…

[deleted]

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

#84

Post by Nullabillity »

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?

https://libvirt.org/migration.html

Though I would argue that relying on cooperative/live migration in the first place is a mistake.

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

#85

Post by chgs »

politelemon wrote: post #43
chgs wrote: post #5

You choose proprietary and you get screwed. I can’t wait for the AWS sob stories.

Aws pricing is listed though, you know what you're being charged. VMware is conversation based though isn't it.

My company pays less than 1/10th list for aws

But even if it wasn’t, aws could add a zero to the end of their prices next year and a lot of companies will not be able to migrate

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

#86

Post by rwmj »

Nullabillity wrote: post #84
vardump wrote: post #68

Earlier quoted context omitted.

Can Proxmox do things like vMotion?

https://libvirt.org/migration.html Though I would argue that relying on cooperative/live migration in the first place is a mistake.

Live migration is a pretty hair-raising feature if you know how it is implemented internally, but nevertheless qemu/libvirt put in a vast effort to make it work and many Red Hat customers are using it routinely.

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

#87

Post by pxeger1 »

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?

How many $8m customers did VMware have? I reckon it’s not far from 690.

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

#88

Post by sys_64738 »

Ekaros wrote: post #23
alephnerd wrote: post #11

Earlier 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

13,5 billion is 1687 8 million customers... That is not actually that many...

Enterprise is about focusing on the top earning accounts. This clearly isn't one of them.

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

#89

Post by sys_64738 »

AshamedCaptain wrote: post #19
alephnerd wrote: post #7

This is basically a polite way to fire a customer. You don't want to sell to everyone - you need to make sure the cost of retention+support is significantly less than what they are paying. If a customer is too troublesome or spending too little (for a company like VMWare, a $8m contract is on the smaller end) this is the politest way to fire them. It sounds like this customer is a legal firm, which makes sense - they…

I have seen companies that would refuse to serve customers that had not been growing as expected. Literally. Bogles my mind.

They're not volume providers so much as focused on the top revenue generating accounts. This is targeted and specific to remove the low revenue accounts from the business. It's a normal tactic.

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

#90

Post by itsdrewmiller »

alephnerd wrote: post #33
michaelt wrote: post #30

Earlier quoted context omitted.

> The strategy you described has no upside for the vendor (in this case Broadcom VMWare). The upside is you don't scare off other customers when they hear reports of a 12x price increase. Right now, in response to this post, VMWare's biggest customers will be drawing up plans for if they need to walk away at the next contract renewal. And they'll want those plans to be extremely credible - it's worth spending $5 mill…

As I said in my comment - you can safely assume mean contract value is in the mid 8 or low 9 digits at a company the size of VMWare. If this scares away customers spending less than that, good for them. It doesn't make a dent when a F1000 is spending tens of millions a year on VMware and purchase by committee and will get sweetheart deals by being strategic accounts.

VMWare has 400k customers and 13.4b revenue according to google, which means their average customer is around 335k.
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