Next Global stock-market share registry operator Computershare looks like it has just decided to bail from VMware rather than suffer Broadcom’s latest licensing regime and price hikes.

Speaking during the closing keynote of Nutanix’s Next conference in Barcelona on Wednesday, Computershare's CTO Kevin O’Connor was asked how he feels Broadcom’s acquisition of VMware has played out.

O’Connor replied that when he arrived 18 months ago he found the IT department using two hypervisors: Nutanix AHV, and another from what he described as coming from “a well-known competitor." Cough, VMware. The CTO felt two hypervisors was one too many and considered a consolidation, but the numbers didn’t stack up and no project was initiated.

He later received a phone call he said took place after what he described as “the change.” And in that conversation he was quoted a future price for Computershare’s non-Nutanix hypervisor that represented an increase by a factor of between 10 and 15.

Migrating to AHV suddenly made a lot more sense and O’Connor has pulled the trigger. Over the next year, before that massively inflated bill falls due, Computershare will migrate 24,000 VMs to Nutanix.

O’Connor said the project will pay for itself in “single digit months.”

“Surprisingly, we've come out of this a lot stronger and leaner with cost base lower than it was before the acquisition,” he said without specifying which acquisition. “We're actually quite delighted it's spurred us to do what we should have done anyway.”

This smells like trouble

The facts mentioned by O’Connor and the Nutanix emcee in the keynote give The Register a very high degree of confidence that Computershare is quitting VMware.

If so, this smells like trouble for Broadcom because earlier today, Steve McDowell, chief analyst at NAND research, told The Register that VMware by Broadcom is “laser focussed on high-revenue, high-margin business” and has priced its wares “just below the pain threshold for customers they care about.”

The Register has no insight into whether Broadcom cares about Computershare, but we do know it has focussed its efforts on working with big business.

And Computershare is big: the Australian company had revenue of $3.3 billion last year, its 14,000-plus staff work across more than 20 countries, serving 40,000 clients and 75 million end-customers. All of which requires 24,000 VMs - a fleet few orgs will match.

The Register imagines that calculating pain thresholds is an imprecise science. If Broadcom consistently gets it wrong then Computershare’s experience shows customers will seek relief. ®

https://www.theregister.com//2024/05/22/computershare_vm_migration_project/