The Acquisition that Led Customers into Turbulence

It is no longer a secret. Broadcom’s acquisition of VMware has sent ripples across the cloud and virtualization industry. Before we take a deeper look at how customers will fare with VMware’s acquisition, let’s analyze and assimilate the changes. The three noticeable shifts in VMware’s business are:

1. Change in License Model

Broadcom has ended the sale of VMware’s perpetual licenses and introduced a subscription-only model. In addition, it introduced a “bring-your-own-subscription license” option while suspending Support and Subscription (SnS) renewals.

According to our analysis, even though the current subscription cost per year is half the old perpetual license cost, it increases 1.5 times over three years and 2 times over five years compared to SnS. Therefore, these high licensing costs, popularly known as the “vTax,” can accumulate into large expenses over time.

2. Changes in Product Offerings

Broadcom plans to divest a few non-core assets, including VMware’s Carbon Black security business and End-User Computing products like VMware Horizon.

Changes such as add-on features, bundling, and minimum purchase capacity are made to the VMware Cloud and vSphere Foundation portfolios to simplify its offerings. These changes limit customers’ flexibility in choosing the products or features per their needs while increasing the overall costs.

3. Changes in Offices and Staff

Broadcom is rumored to have closed some of VMware’s offices in the Asia-Pacific region, along with layoffs in multiple states across the US. According to Worker Adjustment and Retraining Notification (WARN) notices, the layoffs could cost VMware at least 2,837 employees. The reduction in manpower, especially in the Asia-Pacific, can result in slow innovation, delayed responses, and less localized support.

According to Alex Demeule, an analyst at Technology Business Research (TBR), the cuts are reportedly in the areas of software development and cloud engineering, two areas that could significantly impact existing customers and future development.

Vendor Consolidation: A Long-Term VMware Replacement Strategy

The Result: Replacement of VMware Products

The increase in license costs, coupled with the risk of no significant improvement in product innovation and lack of timely and localized support, are prompting VMware customers to opt out and choose other vendors in the market. The replacement of VMware products generally forks out into two paths for customers based on their priorities.

Category 1: If cost-effectiveness is your priority

Let’s say you are the customer and currently use VMware products alongside those from other vendors to meet your diverse needs. If cost-effectiveness is your primary objective, you will only replace the VMware products, bringing new and less expensive products from other vendors. In this scenario, you’re simply replacing VMware because of its growing license costs.

Category 2: If performance and reliability are your priority

On the other hand, some organizations may take this chance not only to replace VMware but also to improve the performance and reliability of their systems. In such a case, the focus would be to choose from the best virtualization solutions in the market for high performance.

However, we believe that these paths are short-sighted, both in terms of cost and usability. The new vendor’s products may not fully integrate with those from existing vendors and may need extra reinforcements to lubricate them together. This again increases the overall costs. It becomes an even costlier affair when you add the opportunity costs of time and energy invested in learning the workings of the new vendor’s products.

To address these challenges more effectively, we propose a third path: Vendor Consolidation.

What is Vendor Consolidation?

Vendor consolidation is the strategic process of reducing the number of suppliers or vendors from which an organization acquires products or services of interest – cloud and virtualization in the case of this article. The primary goal of vendor consolidation is to streamline and simplify the supply chain and subsequent operations. The simplification can be achieved either by acquiring more products/services from existing vendors or completely new vendors.

In simple words, vendor consolidation is employing the same vendor for most or all your product and service needs to run your business.

Why Vendor Consolidation is Important for Your Organization

In the evolving landscape of information technology and digitalization, organizations face a myriad of challenges and needs as they grow and expand. These include scalable storage to manage exponential data growth, scalable architectures like hybrid cloud for efficient workload and cost management, and security solutions to ensure compliance with local data regulations. These requirements extend to areas like disaster recovery (DR), management and automation tools, virtual desktop infrastructure (VDI), containers, cloud capabilities, and more.

Organizations typically have two approaches to address these needs: choosing different vendors for each of these needs or a single vendor offering a holistic suite of these products and services.

The former approach leads to the complex web of products involving multiple management platforms, operation siloes, different licenses and accounts, new learning and training, perhaps different teams to manage each solution, and different avenues of support. Additionally, some products may not integrate or be compatible with each other. All these not only bring down efficiency but also raise the overall costs by multiple folds.

However, organizations that are keen on long-term planning when selecting a virtualization solution need a different strategy. A strategy in which current and future needs are streamlined and directed toward a single or a few vendors, precisely known as vendor consolidation. It is a forward-thinking strategy that aligns with the overarching goal of business growth, offering a more efficient, cost-effective, and manageable way to expand IT and digital services.

Hyperconverged Infrastructure: The Path to Vendor Consolidation

For organizations wishing to adopt a long-term vendor consolidation strategy when selecting a virtualization solution, Full-Stack Hyperconverged Infrastructure (HCI) offers an ideal solution. It is a comprehensive solution that satisfies most current and future product and service needs. Gartner defines full-stack HCI software as “a complete software solution that includes virtualized compute, storage and networking from a single instantiation running on server hardware.” This strong convergence differentiates it from standalone server virtualization solutions like VMware vSphere.

This vendor consolidation trend is also highlighted in the Gartner Market Guide for Full-stack Hyperconverged Infrastructure (HCI) software, in which Sangfor is recognized as a Representative Vendor (read the full report). With full-stack HCI worth more than $1 billion worldwide, the Market Guide draws attention to the preference for organizations to obtain a broader range of infrastructure support from a single provider. In other terms, organizations are looking for a single vendor who can provide all the needed virtualization infrastructure.

As IT infrastructure goes, full-stack HCI under a single vendor is the way forward, as it converges various resources, solutions, and services for simplified management, seamless integration, future scalability, improved cost-effectiveness, streamlined support, and more.

Benefits of Vendor Consolidation with HCI

  • Simplified Management: You will no longer have to deal with multiple vendors figuring out license renewals, expiries, troubleshooting, compliance needs, contracts, and agreements. Vendor consolidation eliminates most of these efforts and frees up time to focus on your core business goals.
  • Integration and Compatibility: If all your products and services can be traced back to a single or a few vendors, you can facilitate better integration and compatibility between them. A more coherent and interoperable workflow can be established with minimum risk of conflicts and improved overall system performance.
  • Streamlined Training: The need to allocate manpower to learn the products’ functioning from numerous vendors reduces significantly with consolidation. A single, integrated solution from one vendor will require minimum staff training to become familiar with how it works.
  • Scalability and Flexibility: Vendor consolidation also caters to unpredictable fluctuations in the market. Working with one or a small set of vendors provides greater scalability and flexibility as your organization grows, making it adaptable to demand and supply changes.
  • Better Risk Management: When it comes to risks associated with third-party relationships, vendor consolidation narrows down the effort to efficiently manage and monitor them. A smaller vendor pool makes it easier to assess and address potential risks, ensuring your organization is efficient and cyber-resilient.
  • Cost Savings: Instead of handling multiple individual payments to many vendors, consolidating to a single vendor saves costs through volume discounts and streamlined processes.
  • Easier Compliance Management: With a few vendors, complying with governmental regulations is easier. It simplifies the auditing process and ensures that all products and services align with the mandatory compliance requirements.

Sangfor HCI: The Ideal VMware Replacement

Holistic Vendor

Sangfor Technologies offers both cutting-edge cybersecurity and cloud solutions. This makes it a one-stop vendor for your organization’s digitalization needs. We offer all equivalent features of VMware products in one solution, Sangfor Hyperconverged Infrastructure (HCI), including virtualized compute, storage, networking, security, and management.

Sangfor HCI also provides built-in backup and disaster recovery (DR), virtual desktop infrastructure (VDI), hybrid cloud, cloud management, containers, and storage expansion with a dedicated software-defined storage (SDS) solution.

With Sangfor HCI, customers will get more than just virtualization. It provides the foundation for building a simplified and resilient digital business that is highly performant, secure, and cost-effective.

Security Specialization

Sangfor HCI offers a complete security suite to ensure robust protection for both workloads and the underlying infrastructure. This includes a distributed firewall and a virtual next-generation firewall for safeguarding network traffic. Additionally, Sangfor HCI incorporates the aSEC Cloud Security Center, which is designed to oversee VM security through features such as EDR and distributed IPS. Moreover, with Sangfor Cyber Guardian, we offer an integrated security service, providing a one-stop security solution for your needs.

Hybrid Cloud Adoption

When looking to include a public cloud in your digitalization strategy, integrating it with your on-premises infrastructure may result in several challenges. Specifically, a different infrastructure and technology stack could lead to consistency and compatibility issues.

Adopting our Unified Hybrid Cloud eliminates these challenges. Sangfor offers both Sangfor Managed Cloud (public cloud) and Private Cloud built on Sangfor HCI and a homogenous technology stack. This ensures consistent management, operations, and security across your entire cloud environment.

Flexible Licensing

Unlike VMware’s rigid shift to a subscription model, Sangfor offers both types of licenses for customers to choose from. This flexibility in license choices allows customers to adapt according to their needs without the cost limiting them.

Local Support

Sangfor has 60+ branches worldwide with a strong local presence in the countries where they are situated. Our local presence operating 24/7 ensures direct vendor support promptly, smooth communication with no language barriers, and readily accessible for any need.

Navigate the VMware Acquisition Turbulence with Sangfor

Sangfor Technologies is a leading cybersecurity and cloud solutions vendor, accentuated by recognitions from industry experts such as Gartner, Forrester, Frost & Sullivan, and IDC. We specialize in integrated security and cloud frameworks encompassing AI-driven platforms, products, and services for both on-premises and the cloud. In these times of turbulence, consider switching to a single vendor that satisfies your existing and future digital business needs. Contact us today to learn more about our offerings or visit us at www.sangfor.com.

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