VMWare Exit Strategy for an Enterprise Company--Is It Worthy

The recent acquisition of VMware by Broadcom has caused upheaval in the industry, primarily due to price hikes and alterations in the business model. Industry sources report differing experiences with the price changes, with some noting a 60% increase, while others mention a 200% rise. Complicating matters further is their new perpetual licensing model. This model involves a fixed licensing fee, irrespective of the size of your VMware usage. Consequently, licensing costs for 1 core are the same as for 100 cores. As long as their is 1 workload using VMWare the commercial costs in licenses remains the same.

There isn't a single comprehensive VMware exit strategy for an enterprise that addresses price and licensing concerns effectively. Such a strategy will inevitably be inadequate. Instead, a multi-step approach should be used to increase the likelihood of full exit. It's important to emphasize the word "chance" because VMware's own strategy is quite robust in keeping customers. As a market technology leader, early mover, and pioneer in virtualization--most workloads of enterprises are greatly invested in their technology. Not to mention a beautiful product it self.

Hypothetically; what will it take for an enterprise company to exit VMWare.

First Strategy: House Keeping

The initial VMware exit strategy for an enterprise involves housekeeping, which includes decommissioning and sunsetting unused virtual machines to reduce the on-premise footprint. While this might seem ineffective due to VMware's perpetual licensing model, where costs remain unchanged regardless of the enterprise footprint, housekeeping serves as an indirect approach. By decreasing the on-premise footprint, a company's data center can lower operational overhead and reduce the need for hardware replacement when servers depreciate. This leads to future cost avoidance, potentially offsetting future price increases and reducing technology dependency on VMware through operational efficiencies.

Second VMWare Exit Strategy: Right Sizing Compute Capacity

This strategy aims to optimize the CPU requirements of each virtual machine by decreasing the vCPU allocation for each workload based on historical usage. By doing so, a virtual machine with excess capacity can be adjusted according to its actual usage. For instance, a workload initially assigned 8 vCPUs can be reduced to 4 vCPUs if its historical utilization is under 30%. Although this may seem irrelevant to VMware's perpetual licensing model, it offers long-term cost benefits. Reducing vCPU requirements results in fewer licenses needed for future virtualization technologies that an enteprise may choose as replacement. For example, consider migrating to Nutanix, where licenses are still priced per physical core. Less vCPU means less core reducing the exit cost.

Third VMWare Exit Strategy: Cluster Rebalancing

An enterprise company typically manages numerous VMware clusters, including those for Production, Development, and Disaster Recovery. By assessing clusters that are either underutilized or overutilized, the company can reallocate nodes from underutilized clusters to those lacking sufficient compute resources. Another option is to remove surplus nodes from underutilized clusters to decrease their footprint. Although VMware's perpetual licensing model may render this strategy ineffective, it should not be underestimated. Streamlining your cluster needs and reducing your footprint simplifies future investments to hardware specification. Moreover, reducing the cluster footprint leads to cost avoidance, such as lower power consumption, cooling needs, and data center space usage, all of which contribute to cost savings that can help counteract VMware's price increases.

Fourth VMWare Exit Strategy: Build Alternative Opensource Virtualization Technology

Exploring alternative virtualization technologies can assist in developing a VMware exit strategy. By adopting a virtualization solution like ProxMox, enterprises can shift some non-critical workloads to open-source virtualization, thereby decreasing their dependence on VMware. To reduce the risks associated with using less familiar virtualization technologies, organizations can begin by migrating first non-critical or development workload to these alternative virtualization technology.

Fifth VMWare Exit Strategy: Migrate to Public Cloud or New Private Cloud

As previously noted, strategies 1 through 4 appear ineffective in tackling the perpetual license issues with VMware individually. However, their advantages become evident during the migration phase. These strategies aim to reduce the footprint and dependency on VMware. By minimizing these aspects, the migration to your new public or private cloud becomes easier, as there is now a smaller workload to transfer, with a more straightforward structure. Further more, the migration only requires to move those that are left on-premise avoiding the effort of unnecessary workload migration that does not add value.

Final Thoughts

There isn't a single strategy that guarantees a successful exit from VMware. By integrating the five strategies previously discussed, an enterprise might manage to transition away from VMware. Nonetheless, technology leaders need to acknowledge that VMware remains a significant presence. Implementing these strategies will have consequences:

• The Service Cost of Migration

• The Cost of New Hardware

• The Licensing Cost of New Platform

• The Cost of Downtime during migration

• Sunk Cost for the incumbent against the new

• Learning curve

• Change in operating model

• Organizational Effort

Considering the consequences of executing of these exit strategies as mentioned above. Technology leaders must evaluate—is the exit from VMware worth the effort and the overhead? Or perhaps it is even more costly to exit. Otherwise, enterprises should accept that these price increases and change to perpetual licensing model are long-overdue market correction that is bound to happen. Comparing to an enterprise alternatives based from sources in the industry. The price of VMWare competitors is at the same cost as their new price.

I suggest a different strategy: optimize your investment with VMWare, develop a small open-source virtualization solution for hosting non-critical and non-production workloads on existing hardware, and prepare a comprehensive migration playbook that can be activated as a contingency plan if necessary. This way, reliance on VMWare is reduced, while minimizing disruption and overhead within the organization.

Disclaimer: This article are solely based in my opinion, and does not represent the voice of any organization or companies. It is a mere reprsentation and expression of what is in my mind. I am not also affiliate to any of the technologies or companies mentioned above.