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

[helsinkiandrew]

> 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!

[pmx]

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!

[alpaca128]

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?

[oliwarner]

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.

[apwheele]

Similar to pmx's point, an implicit assumption in this (which is unlikely to be true in many scenario's) is that the there is a negligible spread in the distribution of revenue per customer. Imagine if you have one whale customer and a bunch of small fish, if you lose the whale in the change you won't maintain the same revenue.

Some scenario's this assumption is reasonable though (say Netflix subscribers).

[croes]

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.

[sthuck]

A lot less sales and cuatomer support people

[BurningFrog]

For a while.

This is a massive invite for competing businesses to offer the same service 20% cheaper, and still make lots of money.

[Log_out_]

Sounds like a plan to invest into competition

[alephnerd]

> 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.

(Also I hate hate HATE The Register's tone - so happy I'm not a PMM who has to wine and dine them at RSA or Re:Inforce.

The moment RSA and these holdover 90s blog cartels like Register and DarkReading die, discourse in the space can become so much better.

Practitioner lead conferences like Bsides and practitioner blogs are superior to these kinds of rags that are written in conjunction with vendors)

[hylaride]

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 1990s had conflict of interest relationships with tech companies (mostly relying on the same companies for advertising) - which is why the tagline is "biting the hand that feeds IT". It's easy to forget that most tech news sources were overwhelmingly uncritical to even bad tech. For those of us who had to actually deal with it, it was refreshing to know other people hated <insert vender product here>. For a good while in the 1990s (before it could stand on its own) it was a site written by people who actually worked with products from the tech companies (with their sales people) and could comment if they were going downhill or got screwed by pricing changes.

Is it possibly outdated and tiring now? Sure (it stopped being a daily news source for me around 2010), but it helps to understand the history and why it is or was popular.

[gruturo]

> Also I hate hate HATE The Register's tone

I find the snark refreshing compared to all the corporate drones using their carefully worded lawsuit-proof, passive-voice, non-committal, lawyer-vetted style.

You must work in a very, very sane environment - for most of us this is literally a breath of fresh air.

[JeremyNT]

> But like I've said before, the winners will be Nutanix, Citrix, and other existing enterprise infra vendors - not Proxmox.

It can be all of the above though. I work in higher education and Proxmox is the only option we are seriously considering right now.

[nottorp]

You hate they're speaking as (very snarky) humans?

Corporate speak is better?

[karmarepellent]

> 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?

[avidphantasm]

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.

[averageRoyalty]

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.

[trebligdivad]

A lot might be staff 'desktops' - some companies run thinclients and run the desktops in VMs. Easier to reinstall them when staff screwup.

[re-thc]

> 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.

[9cb14c1ec0]

I don't think I've ever seen to this degree such a misguided focus on short-term profit at the expense of driving away ALL future customers. At this point, who ever would even consider VMware for a new project or business? Vmware will exist only as long as their current customers exist. Being a VMware salesperson has to be a brutal job right now.

[rekoil]

And you can bet that many of them are currently looking at removing or severely reducing their VMware dependance, maybe even decommissioning projects that are deemed unfeasible to move to another platform.

[mhuffman]

Yes. A 15% price hike is a little high, but could be expected in bigger businesses from time to time, a 15X price hike is something that the entire C-Suite now has to discuss. And what 15X new features are coming with it now?

[nunez]

There are lots of details missing. VMware had a crazy amount of product and support SKUs. It is possible that they were vastly underpaying relative to what they should have been licensed for. Also, 24k VMs is a lot but core count is what matters. They could have been running that compute with insane overprovisioning, and Broadcom generally wants customers with REALLY HIGH core counts. Finally, the new SKUs that Broadcom are pushing consolidate lots of products together that would have previously been purchased separately. If they were _only_ vSphere customers, the hike might have come from now needing to be NSX and vSAN customers against their will.

All that said, lots of customers definitely had similar experiences; it's all over /r/vmware. Broadcom is not joking about wanting to cull the herd here.

[alephnerd]

> There are lots of details missing

It's a submarine article from Nutanix .NEXT who seemed to have done a media buy with The Register.

I've always detested that kind of underhanded vendor tactic, and am honestly happy that giants like ZScaler and Palo Alto Networks are moving away from the conferences+trade rag GTM and moving towards either direct sales or more targeted usergroups+conferences (eg. BSides).

> Broadcom is not joking about wanting to cull the herd here

Yep! Niklesh did the same thing to turn around PANW, and imo VMWare kinda needs it. The products are good, but it seemed like a lot of shenanigans were happening at the AE level.

I've heard down the grapevine that there's a significant shift towards cloud security now, which I think is something VMWare really needed to do - they had the right products, but became addicted to on-prem cash cows.

Either become a PANW or become a Rackspace.

[rado]

The P.S. links to an interesting article about the Broadcom site UX peculiarities: https://matduggan.com/the-worst-website-in-the-entire-world/

[spydum]

I just hope Nutanix can keep their act together, they've been given a gift.

[elygre]

As someone looking at nutanix: what are the issues?

[fred_is_fred]

Broadcom couldn’t care less about Computershare. Many others will pay and they will milk this until it’s dead.

[underseacables]

I wonder if this is why GEM suddenly stopped working! All of a sudden, I couldn't access my stock option platform for a previous employer through ComputerShare. The platform was suddenly shut down in April.

[mindcrash]

And Nutanix is working incredibly great (although that is not a big surprise considering it is "just" KVM with heavy modifications), I recently finished a small consulting gig at a SMB making the jump from VMWare to Nutanix.

It would not surprise me that soon Broadcom will realize they purchased a dead company, because according to my contacts at Nutanix the OP is not an edge case and small and large companies are migrating from VMWare to Nutanix and/or other solutions such as OpenStack in droves.

[AtlasBarfed]

"Nutanix, he said, is now his champion for databases, all 128,000 of them, after delivering 1,000 percent better performance than another unnamed rival and pulling off tricks like recovering a forty-terabyte database in eight minutes."

... yeah. I like El Reg, but... come on. ONE THOUSAND MEGAPERCENT vs unnamed rival.

Nutanix has an in-house cassandra fork I believe, I wonder if they are weasel wording some linear scaling.

[quibuss]

Good for proxmox.

[mlrtime]

I will stay this is still good for Proxmox in the long run.... Maybe not for this article's use case.

Just the fact that less people will know or care about vmware and just start playing with proxmox and not ESX.

[alephnerd]

Read TFA. Customers are going to Nutanix, Citrix, etc. NOT Proxmox.

[hhh]

Is Kubevirt stable enough for me to unplug a host and have the VMs fail over to another?

[withinboredom]

I believe kubevirt just delegates to the under-hypervisor (whatever it is). That being said, default kubernetes waits at least 5 minutes before considering a down host as actually down.