"Extreme" Broadcom-proposed price hike would up VMware costs 1,050%, AT&T says

https://arstechnica.com/information-technology/2024/10/broadcom-tried-to-jack-vmware-prices-by-1050-percent-att-claims/

by cebert • 2 years ago

67 45 2 years ago

arstechnica.com

gnabgib• 2 years ago

Article source (28 points, 4 days ago) https://news.ycombinator.com/item?id=41718139

azinman2• 2 years ago

Seems like a dumb idea for Broadcom; they’re going to keep loosing customers to proxmox and others. Why such a hike?

llm_trw• 2 years ago

Extract as much value as you can from a quickly depreciating asset before you dump it.

Makes so much money.

wkat42423• 2 years ago

The thing is, this asset wouldn't have depreciated so much if it weren't for broadcom.

bityard2• 2 years ago

Dumb or not, getting rid of their smaller customers and jacking up prices for their large customers is exactly what Broadcom said their strategy was going to be immediately after they bought VMware. They are in the execution stage now, it shouldn't come as news to anyone at this point.

kazinator2• 2 years ago

Is AT&T is an example of a smaller customer?

wilted-iris• 2 years ago

Broadcom follows the private equity playbook: hike prices and reduce expenses. Customers will leave until only the most locked in remain. This extracts value from the business and makes it more capital efficient. Broadcom will continue to extract value until only a husk remains.

Ekaros• 2 years ago

At 300% or 1000% rates you might make more in a few years it takes customer to move than you spend on acquisition. At that point, well you are still getting paid or you roll it out to someone else again and still recover part of cost if tech is still good enough.

TabTwo• 2 years ago

Squeeze as much money from the customers until their pain is big enough and they migrate away from VMware.

iJohnDoe• 2 years ago

It’s a shame that VMware allowed this to happen. Yes, it’s just business, but talk about not giving a fuck about who acquired them and what was going to happen to their product.

bityard2• 2 years ago

A company I work with is dumping VMware as fast as they can. Direct orders from the c-suite after Broadcom raised the prices by 300%.

wkat42423• 2 years ago

We are too (major enterprise). It's a shame. It was a good product. They don't even seem to be interested in sustaining it. Just trying to extract maximum value as quickly as possible before they kill it.

partitioned• 2 years ago

VMware has always sucked so this is good news in the long run

luma• 2 years ago

vSphere is, by far, the most mature enterprise datacenter virtualization platform which is why this is so challenging. Orgs are going to have to make do with openShift or Hyper-V etc and a lot of functionality will be lost along the way.

Loic2• 2 years ago

As a long term VMware Workstation user with a Linux host, to run Windows VMs, what is the alternative? This is for professional use.

aragilar• 2 years ago

For work we're looking at proxmox (https://www.proxmox.com/en/).

anonym29• 2 years ago

Out of curiosity, what specifically does VMware Workstation enable you to do, that Virtualbox doesn't?

cfn3• 2 years ago

I don't know if this is still true of Virtualbox but VMWare Player supports USB devices such as payment processors and others and Virtualbox doesn't (or didn't when I tried it).

vladvasiliu• 2 years ago

KVM works fine for my admittedly limited needs.

omgtehlion• 2 years ago

Linux to windows on a single (or a handful of) host? Why not just libvirt (KVM and qemu) then?

cfn3• 2 years ago

I also have a Linux host with Windows VMs running VMWare and KVM/qemu didn't work for me because the VMs don't capture Alt-Tab and other combinations. This is a major annoyance when doing development on the VMs. There were other small things that made me go back to VMware but I can't recall exactly what they were.

Loic2• 2 years ago

I started using VMware more than 10 years ago because of the good USB support for license dongles and pki stuff. I am using Windows as a development machine.

I must admit that the license was cheap, it worked, so I didn't took the time to explore alternatives. But for what I understood, my use case doesn't exist anymore. You cannot buy a single pro license anymore. So, the day I upgrade my system, I may be forced to switch to another solution.

wkat42423• 2 years ago

KVM is fine. Virsh or virt-manager to manage it. No issues with compiling kernel modules either.

I wouldn't look at virtualbox. It's a good product but oracle is just as bad a company as broadcom.

raverbashing• 2 years ago

Virtualbox or QEMU+KVM

Depends on what you need exactly

blackeyeblitzar• 2 years ago

I wonder if AT&T could retaliate in some unexpected way. For example could they do something to prevent devices with Broadcom chips from accessing their network or degrade their performance? I think Apple might fall into that though, as they had made some deal with Broadcom...

chmod775• 2 years ago

How is making random customers switch because you slowed down their internet speeds anything but a self-own?

People don't buy devices because they work with AT&T, they buy AT&T to get internet on their device.

pjc50• 2 years ago

AT&T probably have quite a lot of broadcom hardware in their own network. Besides, we really do not want that kind of thing happening as a precedent because it destroys the market.

nkrisc• 2 years ago

Customer: my internet is slow!

AR&T Service Rep: Ah, That’s because your computer has a Broadcom chip in it.

Customer: How is that possible? I don’t even eat chips!

Yeah great idea.

itsdrewmiller• 2 years ago

Most companies don't try to operate like Automattic for good reason.

kazinator2• 2 years ago

How embarrassing. The company that I once owned the prolific Bell Labs is now being arm twisted by a second hand virtualization software peddler.

manquer• 2 years ago

That is by design?Bell was broken up by the government. It didn’t become what it is today without that intervention.

The anti trust policies till the early 80s and seeing a revival currently with Lina khan and the FTC is not to have monopolistic companies.

Bell labs could be funded because of the monopoly of Ma bell . Larger organizations do not efficiently use capital to really innovate.

Bell labs was really great for research, but Ma bell wasn’t all that successful bringing that research as products to market . Same reason why Google couldn’t get GPTs to market like OpenAI could or GM couldn’t make an electric car successful like Tesla did or SpaceX innovating better than ULA, Boeing et al.

We ideally want companies to grow and die, not become rent seeking models that occasionally throw some scraps for research or CSR activities while returning bulk of the value extracted to shareholders without innovating on their products

shrubble• 2 years ago

I keep thinking I should buy options for AVGO (Broadcom's stock symbol), betting that their stock will drop; however I am surprised they are doing so well, perhaps buoyed by their AI chips business.

However the VMware acquisition will become a millstone around their necks, is my prediction. I am thinking the second or third reported quarter in 2025 will be enough to take the bloom off the rose.

prmoustache• 2 years ago

Any CTO that hasn't started a migration project 2 years ago right when the acquisition was announced shoukd have been fired. It was written on the wall the prices would hike.

olavgg2• 2 years ago

I have talked with several. They were like: Yeah we expect a significant price increase, but our customers will pay that. In oil and gas sector: We can afford that!

rwmj• 2 years ago

I did a talk a few months ago about our efforts to move people off VMware onto KVM: https://pretalx.com/devconf-cz-2024/talk/review/WHHHPFLS9RJD... (https://www.youtube.com/watch?v=lE9yxl0h1pg)

throw888882• 2 years ago

This is modus operandi for many acquisitions in the field of proprietary software.

If you have been in the business for a decade or two, you’ve seen this play more than a few times. It’s legal, it’s profitable, so it keeps happening. Even when it destroys valuable products in the end.

Open source software with permissive licensing is the only true guarantee of not getting squeezed.

But you can’t always find suitable FOSS etc. so here we are. It’s a sad situation IMO

mroche2• 2 years ago

Open source software with permissive licensing is the only true guarantee of not getting squeezed.

I may be misinterpreting here, so please do correct me.

Does the permissiveness of the license matter more than the utility of the tool? Whether or not an application/platform is using a permissive or copyleft license shouldn't really be a determining factor here for viability or vendor escape.

But you can’t always find suitable FOSS etc.

This is the most prevalent problem, it's a lot easier to just spend money for a working tool than use an open source project that doesn't have everything you need, causes papercuts, and is being worked on in the developers' spare time.

However, a lot of FOSS options would be much better off if consumers did contribute to the project. Code is great, but financial support to the core developers goes much, much farther. Particularly if it enables them to prioritize the project over other things in life.

throw888882• 2 years ago

I may be misinterpreting here, so please do correct me

I meant to say that being open source doesn’t automatically mean you can use the software commercially, hence the need for a liberal (enough) license (to permit you this option).

No ideology intended so to say :)

Does the permissiveness of the license matter more than the utility of the tool?

No of course not. A useless, but free tool is still useless. Likewise I’d argue that a useful open source tool you can’t use commercially is equally useless to many.

However, a lot of FOSS options would be much better off if consumers did contribute to the project

I agree with you here

"Extreme" Broadcom-proposed price hike would up VMware costs 1,050%, AT&T says

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