VMware customers are seeing massive late fees since Broadcom acquired the company

• VMware customers look steep price hikes and precocious fees post-Broadcom acquisition.
• Under Broadcom, VMware now focuses connected strategical clients and subscription models.
• Competitors spot an opportunity arsenic VMware's changes thrust request for replacement solutions.

VMware customers person been experiencing sticker daze since Broadcom acquired nan package institution astir a twelvemonth ago.

Besides massive value increases, immoderate customers are being deed pinch a precocious interest of astir 20%, according to 2 partners. They said customers person been caught disconnected defender because these are nett caller subscriptions. The nonstop late interest complaint depends connected factors for illustration their circumstantial woody pinch Broadcom and which products they use.

Under Broadcom, VMware now focuses connected its largest aliases astir "strategic" customers, and its customers must besides person from a perpetual licensing exemplary to a subscription model— moves that Wall Street analysts are optimistic about.

It's unclear erstwhile these precocious fees started. The partners who said pinch Business Insider said that it's impacting immoderate customers transitioning to a subscription erstwhile they miss renewals and moreover customers who still person existing support and subscriptions (SnS) that haven't expired but haven't yet signed up for caller subscriptions.

Additionally, immoderate customers are charged this interest if they initially dropped support but past resumed it erstwhile they upgraded to a caller version.

"Two customers I was talking to past week said, 'Out of nowhere, it seems, a VMware income rep sent maine a statement and said, hey, if they don't renew earlier SnS expires, location will beryllium a 20% precocious renewal fee," said Dean Colpitts, CTO astatine Members IT Group. "My consequence was, really tin location beryllium a precocious renewal fee?"

Likewise, Ignacio Llorente, CEO of OpenNebula Systems, said successful an email that his institution has received "numerous emails from companies expressing concerns complete VMware's caller changes successful contractual terms, licensing models, and pricing policies."

"Many customers who transitioned from perpetual licenses to VMware's subscription-based services are uncovering nan caller exemplary challenging, arsenic they are unaccustomed to nan ongoing renewal process," Llorente said." This has led to immoderate being caught disconnected defender by unexpected further costs, particularly erstwhile renewals are missed."

Colpitts said that nan matter astir nan precocious interest successful nan email was bolded, making it look for illustration a "scare tactic." He added that customers did not get immoderate erstwhile warnings aliases connection astir this precocious fee.

"They're not giving customers immoderate discount aliases information for what they presently have," Colpitts said.

Rick Vanover, vice president of merchandise strategy astatine Veeam, said it's communal for companies to complaint a interest if customers don't renew connected time. Although this is not ever enforced, it tin beryllium utilized to discuss a woody pinch customers to get them to renew earlier nan value increases, he added.

Broadcom did not respond to requests for remark from Business Insider.

Changes to VMware nether Broadcom

Several VMware partners and customers antecedently told BI that they are seeing price increases up to 10 times arsenic precocious arsenic their erstwhile contracts erstwhile they renew, mostly owed to merchandise bundling.

"This displacement has proven peculiarly difficult for organizations that person agelong relied connected VMware, particularly unreality work providers," Llorente said.

VMware partners person besides faced respective changes successful really they waste their software. Colpitts said there's been little tech support, and partners nary longer get early entree to VMware's package arsenic they antecedently did. This intends they'll person to bargain their ain copies to trial it earlier rolling it retired to customers.

"I deliberation Broadcom went astir it wholly nan incorrect measurement and near a bad sensation successful people's mouth," Colpitts said.

Switching to VMware alternatives

Some VMware competitors person seen nan acquisition by Broadcom arsenic an opportunity to triumph complete VMware customers.

"This vexation pinch VMware business practices is causing monolithic request for replacement virtualization solutions," Bruce Kornfeld, main merchandise serviceman astatine StorMagic, said successful an email.

A recent Forrester report said that VMware gross would proceed to drop. While customers will put further successful nan backstage unreality aliases hybrid unreality for regulatory compliance, they apt won't summation business pinch VMware, nan ascendant backstage unreality player, because of bundling and value increases. Still, "many VMware shops will renew astatine a constricted scale," nan study said.

The study said alternatives for illustration Nutanix aliases open-source package for illustration OpenStack will spot accrued interest, though OpenStack will require improved tech income processes.

Llorente said VMware's changes person made customers concerned astir being locked into 1 vendor and driven accrued liking successful akin offerings that are disposable arsenic unfastened source.

Still, different partners opportunity there's nary different viable alternative. Plus, it's a difficult, costly process for customers to move to a different provider, Colpitts said.

"What different really bully options are there?" Colpitts said.

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