Navigating the Shift: The Impact of VMware’s Acquisition by Broadcom on SMBs

Kris WilkinsonMarch 1, 2024

In a move that has rippled through the IT industry, Broadcom’s acquisition of VMware marks a significant shift in the landscape of virtualization and enterprise solutions. This change heralds a critical pivot in managing and deploying virtual environments for those in the small to medium business (SMB) sector. This blog aims to demystify the complexities of this transition, look into the implications for SMBs, and outline why moving to another platform like Microsoft Hyper-V becomes a necessity.

Virtualization: What is it?

Before we dive into the nitty-gritty, let’s unpack what virtualization means. Imagine your computer is a house. Normally, one family (operating system) lives in this house. Virtualization allows the house to be divided, enabling multiple families (operating systems) to live in it simultaneously, efficiently sharing the house’s resources (your server’s hardware). For example, if your business requires 4 Windows Servers (file, print, Remote Desktop, and Active Directory), they can all be run on a single physical server. This technology revolutionized IT by allowing businesses to run multiple virtual servers on a single physical machine, reducing costs and improving efficiency.

The Tectonic Shift: Broadcom’s acquisition of VMware

Broadcom’s strategic acquisition of VMware is a game-changer, especially with their pivot towards focusing more on enterprise businesses. This shift has significant repercussions for SMBs, primarily due to changes in licensing models and the discontinuation of certain VMware offerings. If you currently use VMWare in your environment, you will likely need to use something else very soon unless you’re in the enterprise space.

VMware’s rapid transition away from perpetual licensing to a subscription-based model hits the SMB market hard. Perpetual licenses allow businesses to buy a product once and use it long-term, a cost-effective solution for SMBs. However, the new subscription model, appears to be considerably more costly and is, therefore, likely unsustainable for many smaller businesses. To give you some context, we’ve seen examples where third parties were quoted an increase above 10x.

With the expiration of perpetual licenses, businesses face a pressing dilemma. No updates or support from VMware means increased vulnerability to security risks, which is non-negotiable for any business in today’s digital age. Additionally, planning and executing a migration to a new virtualization platform, like Hyper-V, is not overnight work. It requires months of careful planning, testing, and execution to ensure business continuity and data integrity.

Impacted Products

If you are an SMB and use VMWare products, you likely have the following:

  1. VMware vSphere: The core virtualization platform from VMware, vSphere is critical for managing virtual machines and server resources. The transition from perpetual to subscription licensing affects how businesses deploy and scale their virtual environments.
  2. VMware ESXi: As a bare-metal hypervisor that installs directly on the server hardware, ESXi is a foundational component for running virtual machines. The changes in licensing particularly affect the accessibility of future updates and support for ESXi.
  3. VMware vCenter Server: This product provides a centralized platform for managing vSphere environments, enhancing scalability and offering advanced management features. The shift in licensing impacts how businesses manage and operationalize their virtual infrastructure.

We highly recommend checking when your current licensing expires so that you know how much time you have to plan a migration.

The most logical alternative

Microsoft’s Hyper-V offers a robust, cost-effective alternative for SMBs venturing away from VMware. It integrates seamlessly with existing Windows environments, making it an attractive option for businesses looking to transition without the steep learning curve associated with new software. As a perk, you may already have enough licensing to use this product, if you currently own Windows Server licensing, you should check with your MSP.

Migrating from VMware to Hyper-V may require a significant undertaking that necessitates a strategic approach. Start by inventorying your current virtual servers, assessing their criticality, and planning the migration in stages. Consider the compatibility of your virtual servers and the capacity of your current server hardware to support Hyper-V. Engaging with a managed IT services provider can simplify this transition, providing expert guidance and support throughout the process.

In Conclusion: Embracing Change

While often daunting, change is also an opportunity for growth and improvement. Broadcom’s acquisition of VMware and the subsequent shift in focus away from SMBs is a stark reminder of the volatile nature of the IT landscape. However, it also presents a chance for businesses to explore new technologies and platforms that could offer better efficiency, cost savings, and scalability in the long run.

As a leading managed IT services provider, we help our partners with all things technology, ensuring your business remains resilient, secure, and ahead of the curve. If you are a current partner, we’ll reach out soon. If you’re not and would like to learn more about our services, please reach out anytime.