I usually don’t discuss business models, but what Broadcom did is a good example of how thinking you have an irreplaceable product and not understanding your customers can cause problems.
One of the main challenges with VMware was the variation in business models, which made license portability difficult.
That variation also led engineering teams to go to great lengths to avoid collaborating.
In many ways, VMware was like several companies in one, each with its own distinct business model, selling layered products on top of vSphere.
Changing this corporate structure has been the main driver behind Broadcom’s changes to VMware’s product setup.
At the same time, we live in a very complex world. Corporations have very complicated budgets.
The core of selling goods is to meet your customers where they are.
Broadcom’s goal is to remove customer choice. The idea is that by forcing customers to work with the team that owns VCF credits, workloads will be pushed back into on-premises environments or not moved to the cloud.
Here’s how it works:
Think about “Big Corp Co.” with two teams. Team A wants to run some workloads in the cloud, while Team B is responsible for on-premises virtualization. Team A has workloads on vSphere that need to be migrated to the cloud, and the most cost-effective way to do this is to utilize some of their corporate credits.
But now, Team A can’t use those credits.
Since running the stack on VCF requires VCF credits, they will be directed to the internal VCF team, Team B, which will tell them that instead of running in the cloud, they should run on-premises.
Team A might protest, but Team B, which controls the budget, will explain that there isn’t enough budget for the cloud deployment and offer an on-premises alternative.
Therefore, Team A, because they are forced to use VCF for certain reasons, will theoretically have to move any workload that could have run in the public cloud back on-premises.
This approach assumes Team A has no options.
And that’s where this model of limiting choices fails.
Customers always have options.
And when you force someone to do something, they will quickly find ways to choose differently.
It’s why Nutanix has been adding many customers lately.
Leave a Reply