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They know customers will pay, but mostly they can lock in long term contracts on favorable terms.
Hock is scarily good at his job, depending on how you define his job.
this post was submitted on 04 Oct 2024
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Surely this is self defeating? Everyone seeing these insane price increases will scare off any potential new customers and drive away the customers they do have. Sure it might increase revenue in the short term but ultimately it'll kill the product. Or is that the point? Make as much money as they can with as little effort as possible and then let it die?
think of it similar to consumer examples like adobe products. there are a lot of people/industries tied to it where they can start to charge ludicrous prices. while there are alternatives, there is also a cost attached to retooling and retraining people with the new tech.
It's very much the Oracle model.
A long time ago, Oracle DB could handle workloads much, much larger than any of their competitors. If you needed Oracle, none of the others were even a possibility. There are even tales that it was a point of pride for some execs.
Then Oracle decided to put the screws to their customers. Since they had no competition, and their customers had deep pockets (otherwise they wouldn't have had such large databases), they could gouge all they wanted. They even got new customers, because they had no competition.
Fast forward and there are now a number of meaningful competitors. But it's not easy to switch to a different DB software, and there are a ton of experienced Oracle devs/DBAs out there. There are very few new projects built using Oracle, but the existing ones will live forever (think COBOL) and keep sucking down licensing fees.
VMware thinks they are similarly entrenched, and in some cases they're right. But it's not the simple hypervisor that everyone is talking about. That can easily be replaced by a dozen alternatives at the next refresh. Instead it's the extended stack, the APIs and whatnot, that will require significant development work to switch to a new system.
To add a concrete example to this, I worked at a bank during a migration from a VMware operated private cloud (own data center) to OpenStack. In several years, the OpenStack cloud got designed, operationalised, tested and ready for production. In the following years some workloads moved to OpenStack. Most didn't. 6 years after the beginning of the whole hullabaloo the bank cancelled the migration program and decided they'll keep the VMware infrastructure intact and upgrade it. They began phasing out OpenStack. If you're in North America, you know this bank. Broadcom can probably extract 1000% price increase and still run that DC in a decade.
Sounds like a pretty standard project, we did the same, but hyperv instead of openstack. Just finishing cleanup...
Currently doing the same thing.again, just with openstack :) hope it won't have the same outcome
It is the point, this is exactly what Broadcom does.
Standard private equity form behavior
The fact that it's called Broadcom at all... They just bought the company a while back and started using the brand because it's recognizable in the tech industry. It's not really Broadcom, just a shell.
Yup, this is on form for them. This isn't the first product they've done it to and surely won't be the last.
The moment the news broke we started migration planning, a short while later their new pricing came through and immediately justified the project spend. Tens of thousands of VMs migrated, a ton of labour, and even some hardware refreshes thrown in - and still cheaper than renewing, by a looong shot.
Shame, I liked VMware.
Unfortunately our director just doesn't pay attention to these things. When I try to bring them to him, suggest "hey this looks very bad, maybe we should plan on something now", he brushes it off. Same thing happened when I pointed out how much VMWare we use and that it would be good to start a transition, or at least start shopping around for some alternatives to consider.
Now like a year later he's only just starting to mutter stuff about Hyper-V.
Which just feels like...Hyper-V is fine I guess, but god damn, could we at least try not to sink further into Microsoft quicksand? There's better options out there.
What platform your company (I assume) migrated to?
Probably Xen. Maybe proxmox. Both had tools to assist with migration.
Yay capitalism
What you're seeing is the best economic system ever created in action
/s
Short term is all that matters. Did the line go up this quarter? Then they're good.
Killing the product is the future CEOs problem.
Any one want to guess who will really end up paying for the price hike?
It's not AT&T.
HyperV looking like a good option for a lot of customers now. They are in the Microsoft noose anyway.. so now they can go all in.
Microsoft is sunsetting Hyper-V Server (Not Hyper-V itself) so now you have to run Hyper-V on a bloated Windows Server install. Too bad because Hyper-V is actually a decent hypervisor and Microsoft is shutting out a lot of their smaller customers who don't have the money for tons of exhorbitant licensing.
I even use Hyper-V for my self hosted setup but I'll be forced to switch in a few years whenever my host server is ready for retirement.
They also offer the Azure Stack HCI platform, which is the modern version of hyper-v, but goddamn is it a pain in the ass (and requires active connection and subscription to azure for onprem workloads).
It's alright, but it's my least favorite of the 3 platforms we run.
I think administrative overhead is the hidden cost that a lot of technology vendors fail to consider. Microsoft is especially guilty of this. Is a "good" product that requires an obscene amount of esoteric knowledge and experience to maintain really that good?
Yeah, I'm definitely not the biggest fan of HCI, especially the reporting aspect of it. I had to write my own damn reports just to see how badly we over provisioned disks once we found out it only reports on actual utilization.
I tolerate Microsoft products and admin them, but damn they're annoying to use at times.
Thankfully Microsoft is a thrustworthy partner with the users best interests in mind. /s
At home Proxmox works reall well. When our VMWare licenses expire we'll certainly evaluate that as option.
I'd start now.. these transitions usually take a bit. And Broadcom will only get more predatory. Staying with VMware is not a realistic option.. especially if you rely on a support partner. With these mega corps only the other mega corps will get proper support.. the rest can crawl in a hole and die
So now is the time to figure out what replacement fits best, check your team for capability gaps and send your VMware people to courses to get intimate with the replacement.
This 1000% because you know for fuck sure that some dev in the corner of a building that's going to be the last holdout.
Start planning now with an implementation plan to complete a few months before the contract is set to expire. Plans like these often hit bumps and delays.
Once you're down to the last 5%, tell them "Join or Die".
Yeah.. or.. if your team insists on keeping VMware only for you, you will need to pay for licencing out of your own budget.
That's good advice, we will. Thank you.
Openshift is also a good competitor product if you're interested in containers.
Why would MS not use this opportunity to also hike the prices of their equivalent offerings? 1000% increase leaves a lot of room for an increase while still being cheaper.
They absolutely will. Maybe not tomorrow.