Since the acquisition of VMware by Broadcom in November last year, customers using the VMware platform have been facing a period of uncertainty and concern. This is especially the case when it comes to the financial impact of changes being made to the VMware product portfolio and its licensing model.
In this guide, Damian Reffin, Azure Service Architect, shares how you can navigate VMware’s shift to subscription licensing.
While many VMware customers are facing risks associated with the licensing model shift, it is important to note that a price increase in of itself is not enough to upend an operating investment in VMware technology.
VMware technology is good – it powers the IT services of many organisations who have decided that their preferred cloud is a private or hybrid cloud. These organisations have invested a great deal towards VMware adoption in their people, tools and processes to drive their mission-critical objectives.
While the changes are unsettling, unexpected, and have generated significant emotional reaction in the customer base, decisions on what to do next will be based on strategy and sound business principles. It will be a combination of factors that drive the requirements for a change, and this guide highlights some great opportunities and drivers available to VMware customers.
Licensing model shift
VMware is transitioning from perpetual licences to a subscription-based model. This change is significant for customers who are accustomed to one-time purchase agreements.
Budget shock
Customers on perpetual licensing are anticipating large price increases, and those still to renew existing term-based agreements are expecting costs to rise significantly as well. This could impact budgeting and the total cost of ownership (TCO) for businesses relying on VMware technologies to power their IT operations.
Customer transition
Broadcom is offering incentives to help customers move to the new subscription model, but this shift may still represent a substantial change in how companies manage their IT resources.
Supplier confidence
While the immediate impact is that customers must assess their TCO based on significant cost increases, many more have suffered a loss in confidence in a key supplier that extends far beyond an unplanned budget shock. Large VMware employee layoffs, a shift to selling to their top 1,000 customers where most revenue is located, and analyst predictions of large numbers of customers leaving VMware, are shaking customer confidence.
Strategic uncertainty
Organisations may be unsure how these changes will impact their long-term technology plans due to unpredictable pricing and licensing changes as well as divestment of several VMware end-user products, such as Horizon View and Workspace ONE. Organisations that once enjoyed relative stability and control with their private cloud investments are now having to explore alternative hypervisor solutions, or hyperscale providers like Microsoft Azure.
Azure options for VMware investments
Modernise on your own terms with a range of options with Microsoft Azure.
Azure VMware Solution
Retain VMware skills, maintain familiar tools, quick and low risk migration or datacentre exit, with no app modifications. VMware subscriptions included or bring your own with the hybrid licensing benefit. Extend you current VMware cloud into Azure while maintaining consistency with your current investments.
Azure IaaS and PaaS
Modernise with flexible IaaS and PaaS services and extended capabilities in data and AI. Leverage Azure and cloud skills by shifting to Azure compute, storage and networking with no requirement for VMware licensing.
Arc-enabled VMware vSphere
Where VMware licensing is going to be extended, connect your VMware cloud environment with Azure Arc to enable Azure services and lifecycle operations into your VMware investments.
What are the key use cases of AVS?
- Data centre migration: business critical events such as data centre consolidation/retirement, lease expiry, large Capex hardware refreshes, or extended Windows/SQL support
- Data centre extension: bursting and/or capacity expansion, unplanned projects, and non-production development and test environments
- Application modernisation: bring your applications closer to modern cloud capabilities in Azure; standardise your microservices architectures; operate hybrid applications or develop next-gen applications
- Desktop transformation: operate your current VMware Horizon and Citrix desktops in Azure, bring your desktops closer to cloud apps, or leverage Azure for desktop bursting; or completely transform your desktop approach with Cloud Endpoint solutions like Azure Virtual Desktop or Windows 365 Cloud PCs
- Disaster recovery: new, replacement, or complementary DR services with optimised DR TCOs
The advantages of AVS
The technological and operational benefits of Azure VMware Solution (AVS) are convincing but there are other advantages, often misunderstood, that should be explored.
A fully managed service from Microsoft
This one shouldn’t be overlooked. No longer do you need to administer and support the physical infrastructure – Microsoft will manage it for you in its datacentres, and it’s backed by service level agreement (SLA).
Funding programs
Microsoft offers a variety of partner-led funding programs that reduce the cost of migration.
Dynamic infrastructure
Azure’s dynamic infrastructure allows businesses to respond to evolving customer demands and preferences by rapidly scaling clusters and servers and distributing resources to fulfil current needs without large Capex investments.
Migration
Whilst no migration process would probably ever be entirely simple, migrations to AVS are some of the most seamless. VMware on-premises customers can move their workloads to AVS with only a few adjustments and maintain their current IP addressing schemes.
Phased approach and scalability
AVS enables you to scale your cloud environment to easily meet your needs for future growth. By engaging in a phased approach, you are able to control which workloads are moved to the cloud. This enables your teams to upskill over time and avoid additional staffing costs.
Financial benefits of choosing AVS
Coupled with generous migration cost offset support, Microsoft has additional stand-out offers and benefits now accessible for AVS customers, crucially with some of the deepest discounts currently available for a limited time only.
- Use Reserved Instances to lock in pricing for one, three or five years.
- An additional 20% discount on Azure VMware Solution when you purchase a new one-year Reserved Instance before 31 December 2024.
- A five-year Reserved Instance for Azure VMware Solution is only available for a limited time and access ends on 31 December 2024.
- Free Extended Security Updates (ESU) for Server 2012 and 2012 R2 until October 2026
- License portability for VMware Cloud Foundation subscriptions
What’s next for your VMware estate?
The changes to VMware’s licensing model and the uncertainty around the future of the product may seem challenging but Microsoft has invested in a long-term partnership with VMware to offer stability and service excellence for VMware customers who need options. Whether you need to maintain your VMware investments long term or provide enough runway for modernisation and transformation, AVS is a compelling choice for many organisations.
As we’ve explored, there are various options available to help you mitigate any risk you feel you may have around your VMware investment. AVS is one of these options, which is providing organisations with a comprehensive VMware service on Azure allowing them to capitalise on their VMware investment while managing any risk. As organisations work to innovate and/or reduce costs, Azure and Azure VMware Solution can offer a strategic edge in maintaining competitiveness and operational efficiency.
Advania is a leading Microsoft partner in the UK, accredited with the Microsoft Azure VMware Solution specialisation.
