Opinion Cancel your Netflix account. Delete Season 2 of House of the Dragon from your diary. This year’s must-watch drama will play out in three episodes that will appear in the early weeks of June, September, and December, when Broadcom reveals its results and perhaps also whether its model for software licenses is viable.

In case you came in late: After ingesting VMware, Broadcom quickly decided to sell only subscriptions comprising support and bundles of its software, claimed costs would fall for customers who currently use even two of the products in the bundle, and that this plan will allow customers to extract maximum value from the VMware stack and its wares effectively will pay for themselves in improved agility and efficiency.

Plenty of VMware customers don’t like this plan. Some feel they must now acquire products they may not want or are not ready to implement in order to get the products they currently use and rely upon, and have pointed to price rises, some of them massive. The Register has been told of bills rising by 500 or 600 percent and read accounts of license costs leaping from $17,000 to $470,000, and $8 million to $100 million. Your vulture here even heard of an org that thinks returning to bare metal could be cheaper than new VMware licenses.

Broadcom has told The Register those who complain about price hikes haven’t done their sums right by considering the cost of support on top of VMware’s old perpetual licenses.

Yet the American mega-corp has also promised shareholders its approach will see it achieve double-digit revenue growth for its VMware portfolio throughout 2024.

That’s an unusual growth rate in the enterprise software industry and rarer still in mature markets like virtualization and hybrid cloud that don’t attract massive numbers of new customers each year.

Every other business software vendor in the world is likely therefore watching to see if Broadcom can meet its targets, because if it can others will surely be tempted to replicate its tactics.

Those tactics are not unique. Cloud Software Group and private equity owners of enterprise software companies do similar things.

But Broadcom is a public company. Every quarter it must share its numbers and then explain itself to investors and do likewise at an annual general meeting.

So we will soon know if Broadcom’s plan worked.

For what it’s worth, your humble vulture thinks Broadcom will come close to meeting its target, for three reasons.

One is that it probably budgeted to lose customers - as happened when it acquired Symantec.

Another is that migrations from VMware will be painful and the alternatives beyond Nutanix aren’t enormously strong. If the likes of Scale Computing were going to go big, it would have happened by now. Vendors such as SoftIron are arguably too small for big buyers.

Open source alternatives to VMware aren’t hugely tempting. OpenStack remains a challenging sprawl. Citrix’s interest in server virtualization was so sporadic that the resurgent XenServer must surely prove itself anew before it attracts new customers other than those forced to adopt it by the ejection of the hypervisor from Citrix’s bundles of its other wares. The likes of XCP-NG and Proxmox have solid reputations, though they have ecosystems that won’t suit large buyers. Many vSphere users will stick around despite inflated bills while they wait for alternatives to mature.

A third reason your correspondent thinks Broadcom will succeed is that VMware users haven’t organized to fight back other than in Europe, where four user associations have asked the European Commission to have a look at Broadcom’s practices. There’s no sign Europe will act, and even if it does, any rulings will be made so far into the future that most VMware customers will have been required to adopt Broadcom’s licenses.

Broadcom is therefore unthreatened.

Except, perhaps, by Microsoft because many VMware users will also be Windows Server customers and have some under- or unused Hyper-V entitlements they can press into service to take on virtualized workloads.

You read that right: Microsoft, which evolved a dominant gene for predatory licensing when it cornered the PC market in the 1980s, and continues to express it today by making its products cheaper when they run in Azure, might soon be VMware users’ least unpleasant alternative.

Ain’t technology grand? ®

https://www.theregister.com//2024/04/05/the_world_is_watching_broadcom/