By 2028, Over a Third of VMware Workloads Will Migrate
▼ Summary
– Gartner predicts VMware will lose a significant portion of its business over the next three years due to customer departures.
– Broadcom’s acquisition of VMware in 2023 led to changes that alienated customers, including higher costs and reduced channel partners.
– A major concern is the shift from perpetual licenses to subscriptions and bundling products into fewer, more expensive SKUs.
– Hyperscalers like AWS can no longer resell VMware subscriptions, pushing 35% of VMware workloads to migrate elsewhere by 2028.
– VMware claims these changes ensure consistency and offer customer flexibility, while also increasing Broadcom’s direct sales.
A major shift is underway in the enterprise virtualization market, with over a third of VMware workloads expected to migrate by 2028. This forecast comes from Gartner research vice president Julia Palmer, who points to significant operational changes following Broadcom’s acquisition of VMware in late 2023. Many organizations, particularly small and midsize businesses, are reconsidering their reliance on VMware due to rising costs and altered licensing structures.
Since taking over, Broadcom has moved aggressively to reshape VMware’s commercial model, shifting from perpetual licenses to subscription-based offerings and consolidating products into fewer, more expensive bundles. These changes have been compounded by a reduction in the number of authorized channel partners, limiting resale options and pushing customers toward direct purchases. The new approach appears tailored to larger enterprises, leaving many smaller organizations feeling sidelined and financially strained.
Palmer shared these insights during a presentation at Gartner’s IT Symposium in Australia, highlighting that a significant portion of the coming migration wave involves customers who currently use VMware through hyperscalers like Amazon Web Services. Shortly after the acquisition, Broadcom altered its agreements with these cloud providers, preventing them from reselling VMware subscriptions to end users. This policy shift disrupts existing cloud deployment models and effectively forces customers to seek alternative solutions.
As a result, hyperscalers are expected to encourage clients to transition to native public cloud services rather than VMware-dependent environments. In response to earlier criticism, VMware published a blog post in mid-2024 defending the licensing changes as efforts to ensure consistency and enhance customer flexibility. However, the practical outcome has been a consolidation of control and revenue under Broadcom, accelerating customer departures and fueling interest in competing platforms.
(Source: Ars Technica)
