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VMware: Business Simplification, Portfolio Innovation and Ecosystem Standardization

Photo for Prashanth ShenoyPrashanth Shenoy
Long term value will be proven out in delivering on customer outcomes and partner profitability

Change is never easy. Since the completion of Broadcom’s acquisition of VMware, we have been all about change. For the VMware Cloud Foundation division, all of this change was necessary to transform our business to deliver faster innovation with more value to customers, and even better profitability and market opportunity for our partners. So, what's changed now, post-acquisition, and why will this benefit your organization?

  • Business model transition to subscription licensing which is the standard in the industry
  • Radical simplification across our portfolio, go-to-market and organizational structure to make it easier to do business with us.
  • Standardization across our ecosystem to drive value through distributors/resellers, Cloud Service Providers, Hyperscalers and technology partners.
Business Transformation: A Strategy Summarized in One Word - Simplification

To recap, we’ve completed our transition from selling perpetual software to subscription licensing only; streamlined what, how, and through whom we will sell our software going forward; and reorganized internally around our VMware Cloud Foundation strategy to streamline execution.

First, subscription is the model all major enterprise software providers are on today. Subscription software is the right model for fueling continuous innovation for customers. This past quarter we finalized the switch fully to subscription software, just like everyone else. We immediately turned this transformation into net new value for our customers. How? Do you want to have deployment flexibility? Now you can. When you purchase VMware Cloud Foundation, you get license portability. This means you will be able to deploy on-premises and then take your subscription at any time to a supported Hyperscaler or VMware Cloud Services Provider environment as desired. You retain your license subscription as you move. Google Cloud will be the first to support VMware Cloud Foundation license portability with other Hyperscaler and partner clouds expected to follow. Read the full Google Cloud announcement here.

How about that portfolio? Offering a few offerings that are lower in price on the high end and are packed with more value for the same or less cost on the lower end makes business sense for customers, partners and VMware. We’re putting all our R&D investment towards fewer offerings, which is a double win for customers. 

Finally, we’ve brought all of the product teams into the VMware Cloud Foundation division. We are now better positioned to deliver a single, integrated product across all core technologies with a single vision for where we are taking the VMware Cloud Foundation platform. We also have professional services and global support practically sitting right next to R&D inside the same business division. This gives us a laser focus on building one product with the services and support needed to drive maximum value.

Three changes, but massive impact.

Portfolio Transformation: Fueling an Engine of Innovation

We are now focusing our innovation engine on VMware Cloud Foundation and VMware vSphere Foundation, along with some very strategic add-ons related to security, ransomware protection and recovery, application platform services, and private AI.

VMware Cloud Foundation helps organizations modernize their infrastructure with the best possible TCO. It’s fully software-defined compute, network, storage with automated and simplified operations. VMware Cloud Foundation enables a cloud operating model that provides the benefit of public cloud with the security and performance of on-premises private clouds. 

VMware Cloud Foundation provides developers a self-service private cloud experience, which results in greater productivity. Development teams can leverage the embedded Kubernetes runtime and a self-service cloud consumption interface to deploy infrastructure as code. This results in frictionless deployment of business-critical and cloud-native applications. IT teams can maintain compliance against security requirements by building security into the policies deployed with every cluster. 

VMware Cloud Foundation provides enterprise-grade resiliency and security. Customers can scale infrastructure and applications seamlessly through a hardened platform that has built-in      resilience to ensure mission-critical apps are always available. The intrinsic security built into VMware Cloud Foundation helps significantly reduce the attack surface for lateral threats, and our disaster and ransomware recovery capabilities help customers rapidly and efficiently recover from cyber threats.

Through all of this change we’ve not stopped innovating. Here are updates to both the core platform and our add-on services that we have recently made available or will deliver throughout the rest of Broadcom’s Q2FY24.

VMware Cloud Foundation Core Platform Enhancements

Automation for Infrastructure and Application Services: In response to a growing need from VMware customers to deliver and support next-gen cloud-native and AI-powered applications across their private and hybrid clouds, are announcing three new automation capabilities:

  • Automation for Data Services: available today, VMware Cloud Foundation provides a native infrastructure automation and management experience for data services. This enables IT to offer self-service, enterprise-hardened Postgres, MySQL, and Google AlloyDB Omni (tech preview) to their teams, boosting developer innovation, reducing IT costs, and ensuring data resilience. For more details read the blog here.
  • Automation for Load Balancing Services: through built-in VMware Cloud Foundation capabilities, cloud admins will be able to offer application teams self-service access to L4-L7 load balancing services. This will enable application and infrastructure teams to immediately deploy load balancing at the time of application provisioning, with minimal know-how of load balancing technology or the need to create manual tickets. These capabilities will be available to support the VMware Avi Load Balancer add-on starting in a few months.
  • Automation Services for Private AI: customers will be able to use capabilities built into VMware Cloud Foundation to automate private AI service setup and provisioning of GPU-enabled machines for ML workloads when VMware Private AI Foundation with NVIDIA add-on becomes available this quarter. 

Integrated Network Operations Capabilities: The latest integrated network operations capabilities offered exclusively as part of VMware Cloud Foundation help IT users improve their network visibility, gain insights into network performance, and quickly identify and resolve network issues. These new enhancements are available today. Read about them here.

VMware Cloud Foundation Add-On Services Updates

Unified Ransomware and Disaster Recovery: With VMware Live Recovery, customers can protect applications and data from modern ransomware and other disasters across on-premises and public clouds with flexible licensing for changing business needs and threats. VMware Live Recovery will bring together the existing capabilities of VMware Cloud DR, VMware Ransomware Recovery, and VMware Site Recovery Manager, and add new capabilities such as enhanced vSphere replication (1-minute RPO) and seamless extension of on-premises disaster recovery to the public cloud with ransomware recovery. All of this will be delivered with a unified management experience and available through a single add-on subscription for VMware Cloud Foundation, which is expected to become available in Q2FY24.

VMware Private AI Foundation with NVIDIA: unveiled at VMware Explore 2023 Las Vegas, VMware and NVIDIA are working to deliver this new add-on service to VMware Cloud Foundation. We’re almost there, and you can expect an update on availability of the solution this quarter. But you don’t have to wait to learn more. Join the team online for AI Field Day 4 on February 21 from 08:00-10:00 PST to get an update on the capabilities we’re driving and the use cases we’re seeing emerge for VMware Private AI Foundation with NVIDIA.

Ecosystem Transformation: Standardization Drives a Better Experience

Broadcom’s strategy is to drive adoption of our full stack VMware Cloud Foundation as the best subscription-based private cloud platform for innovation. We will rely heavily on partners to transition our broad customer base to the new subscription model and help them transform their business with our private cloud infrastructure. This quarter we are welcoming thousands of partners across all routes to market into the Broadcom Advantage Partner Program.

In the channel, we are standardizing pricing so that everyone knows what to expect, all partners are on a level playing field, and partners are competing on value-added differentiation. This will deliver a better customer experience. We’ve also implemented a new customer segmentation model aligned with our simplified portfolio strategy. Here are some important things to know about our customer segmentation model:

  1. Partners have opportunities across all segments including the strategic segment.
  2. VMware will have deeper direct relationships with its most strategic customers, in order to accelerate the adoption of VMware Cloud Foundation in these accounts.

It makes business sense for Broadcom to have close relationships with its most strategic VMware customers to make sure VMware Cloud Foundation is being adopted, used and providing customer value. However, we expect there will be a role change in accounts that will have to be worked through so that both Broadcom and our partners are providing the most value and greatest impact to strategic customers. And, partners will play a critical role in adding value beyond what Broadcom may be able to offer itself. 

VMware Cloud Service Provider partners will help take VMware Cloud Foundation to an even broader set of corporate and commercial customers and deliver it as a managed service. And because not all customers are ready to consume VMware Cloud Foundation, our thousands of reseller partners will drive adoption of VMware vSphere Foundation. In the corporate segment, we support co-selling with our CSP partners. And our commercial segment is 100% owned and led by reseller partners. This should help reduce channel conflict, which partners have said was an ongoing challenge previously.

Good Business Hygiene is Never Easy

When you acquire a company, you look at everything. Broadcom identified things that needed to change, and as a responsible company, made the changes quickly and decisively. The changes that have taken place over the past 60+ days were absolutely necessary. We understand this massive transformation and simplification of the portfolio and our business model has raised many questions and concerns as you continue to evaluate how to maximize value from your VMware software investments. We are proactively working with the sales teams and channel partners to help customers make this transition and encourage customers to engage them to work through the best approach for their businesses. 

One thing has not changed…delivering value to you, our customers. You are the reason we build and deliver great software. You drive our innovation. The new VMware Cloud Foundation is the best platform for deploying a private cloud infrastructure that is ubiquitous, flexible and integrated across cloud endpoints. 

It will only get better.