9 Predictions for VMware Users of Unexpected Broadcom Consequences 

By Lee Caswell, SVP Product & Solutions Marketing

January 16, 2024 | min

VMware customers, particularly those with knowledge of Broadcom’s acquisitions of CA and Symantec, are expressing concerns over pricing, packaging, sales coverage, product plans, and support.  

There is no doubt that Broadcom, after a year of planning, is moving quickly and decisively to execute changes consistent with a plan to nearly double VMware profitability over three years.1 Layoffs2, product bundling changes3, canceled channel contracts4, and a direct sales coverage model for the top 2,000 customers5 are just some of the changes publicly announced and underway.  

9 Predictions on Unexpected Consequences

Business model changes often carry unexpected consequences for customers and many VMware customers are now asking Nutanix for advice on how to minimize their exposure to these Broadcom changes. With these asks in mind, here is a list of the top nine unexpected consequences we expect customers may encounter as the Broadcom playbook goes into effect.  

  1. Most VMware customers will pay more. Despite Broadcom statements that it would not focus on raising prices6, we believe new bundling strategies will drive up effective prices for most customers. For example, vSphere ENT+ customers could see 2x – 3x increases now that this product is only available bundled with vSAN and vRealize licenses – especially if a vSphere customer is not an HCI customer. For other impacts of bundling, see  
  2. Legacy storage payback periods will lengthen. SAN and NAS investments are often justified based on the consolidation benefits of moving from physical to virtual servers, offset by the added cost of the hypervisor. Customers should be asking SAN and NAS providers to update their TCO and ROI models with higher effective vSphere costs.
  3. Channel partners will reduce VMware investments. VMware has 65,000 reseller partners7 and 4,500 active cloud, hyperscaler and managed service providers8.  By our estimates, Broadcom’s plan to take VMware’s top 2,000 customers direct could eliminate up to $650M in channel margins and lead to a decrease in channel-delivered VMware installation and support resources.  
  4. Expect Dell, HPE, and Lenovo to similarly reduce VMware investments. VMware has extensive relationships with the largest systems providers, including Dell, HPE, and Lenovo. Joint deals have been typically fulfilled by channel partners, with partners realizing margin on the aggregate solution value. System companies risk alienating their channel partners by promoting VMware offerings and may look for more channel-friendly alternatives.   
  5. VMware EUC offerings may become more open. Sales and support strategies for VMware Horizon and View solutions have been largely tied to vSphere. If Broadcom divests the EUC business as has been reported9, it’s possible the new EUC owner would offer support for other hypervisors to increase market reach and escape the effective cost of vSphere Ent+. 
  6. VMC may no longer be a VMware-managed service. Managed services are expensive because they require dedicated investment in cloud resources. With Broadcom’s focus on cost containment, VMC may become a customer or provider-managed service. This may introduce switching costs for all existing VMC customers.
  7. Dell may shift VxRail focus to ScaleIO. VxRail is a joint HCI offering from Dell and VMware. With Broadcom going direct, sales of VxRail would likely require joint selling and shared account control between Dell and Broadcom. Consequently, Dell may attempt to substitute ScaleIO in place of vSAN, even if ScaleIO does not offer an HCI experience.  
  8. DPU adoption could slow. Customer plans to support SmartNICs and DPUs from NVIDIA, HPE, and Intel may slow down if the vSphere Ent+ bundling strategy and higher effective cost is extended to the more complicated DPU environment.  
  9. Customer support may change. VMware’s top 2,000 customers may see changes in coverage as layoffs proceed and they lose channel support. 

We’re talking with customers everyday about these and other concerns. Let us know how we can help you navigate the changing VMware landscape and help you manage these and other risks. 

1 Source -
2 Source -
3 Source -
4 Source -
5 Source -
6 Source -
7 Source -
8 Source -
9 Source -

©2024 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo and all Nutanix product and service names mentioned herein are registered trademarks or trademarks of Nutanix, Inc. in the United States and other countries. Nutanix, Inc. is not affiliated with VMware by Broadcom or Broadcom. VMware and the various VMware product names recited herein are registered or unregistered trademarks of Broadcom in the United States and/or other countries. All other brand names mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). Certain information contained in this presentation may relate to, or be based on, studies, publications, surveys and other data obtained from third-party sources and our own internal estimates and research. While we believe these third-party studies, publications, surveys and other data are reliable as of the date of this paper, they have not independently verified unless specifically stated, and we make no representation as to the adequacy, fairness, accuracy, or completeness of any information obtained from third-party sources.

This post may contain express and implied forward-looking statements, which are not historical facts and are instead based on our current expectations, estimates and beliefs. The accuracy of such statements involves risks and uncertainties and depends upon future events, including those that may be beyond our control, and actual results may differ materially and adversely from those anticipated or implied by such statements. Any forward-looking statements included herein speak only as of the date hereof and, except as required by law, we assume no obligation to update or otherwise revise any of such forward-looking statements to reflect subsequent events or circumstances