VMware

VMware Accelerates AWS Cloud Adoption (but not the way you think)

The schism between VMware and AWS has only served to accelerate AWS cloud adoption


 

The recent announcement of Broadcom’s significant price hike for VMware services, reportedly as much as 1,050% in some cases, is causing ripples across the tech industry. This move, which has drawn criticism—and even litigation—from large enterprise clients like AT&T, is expected to reshape cloud migration strategies. For many organizations heavily invested in VMware, the price increase may catalyze a shift to public cloud services, particularly Amazon Web Services (AWS). Here’s how this change could impact the landscape of cloud computing.

The Price Hike: A Catalyst for Change

The substantial increase in VMware's pricing under Broadcom has left many enterprise customers reeling. This price surge has created significant concerns for businesses that rely on VMware’s virtualization tools, making their on-premises infrastructure more costly to maintain. Organizations like AT&T have already begun exploring alternatives, suggesting that the high costs of VMware’s subscription-based licensing may no longer justify sticking with the software, especially given the ease of accessing modern cloud-native infrastructure through platforms like AWS​.

The rising costs associated with VMware have caused AWS to end its long-standing partnership with VMware, effective April 30, 2024. Despite no longer being partners, the change is poised to accelerate cloud adoption, particularly toward AWS, as organizations look to avoid steep infrastructure costs and seek new solutions to manage their IT workloads

Why AWS Stands to Benefit

AWS has long been a leader in the public cloud market, offering a comprehensive suite of services that enable organizations to run scalable, secure, and highly reliable applications. However even more important: the fallout between VMware has meant that AWS is now all in on helping customers migrate to their cloud. Here are some key points:

For companies struggling with rising costs of traditional on-premise VMware environments, AWS presents a more cost-effective, scalable solution that can support workloads traditionally handled by VMware.

Beyond the aforementioned incentives, several factors make AWS an attractive alternative:

  • Cost Efficiency: AWS operates on a pay-as-you-go model, making it an appealing option for businesses looking to avoid the steep price hikes from VMware. This pricing model allows companies to only pay for the computing resources they use, often resulting in significant savings compared to traditional on-premises infrastructure.
  • Cloud-Native Architecture: Many companies are beginning to prioritize cloud-native technologies such as containerization, serverless computing, and microservices. AWS is well-positioned in this space, with services like AWS Lambda, Elastic Kubernetes Service (EKS), and Amazon Elastic Container Service (ECS) offering alternatives to traditional virtualization models.
  • Migration Tools: AWS has invested heavily in making cloud migration easier through services like AWS Application Migration Service. These tools help businesses migrate existing VMware workloads to the cloud, reducing friction during the transition process.

Accelerated Cloud Adoption

As companies weigh the financial implications of sticking with VMware versus migrating to a cloud solution, many may decide that now is the time to fully embrace the cloud. Broadcom’s price hikes could create a tipping point for organizations that had previously been reluctant to migrate, particularly those already on hybrid infrastructures. By moving to AWS, enterprises can lower operational costs while also gaining access to AWS’s wide array of services, including AI, machine learning, big data analytics, and more.

Industry Disruption

While Broadcom's pricing strategy may secure short-term revenue gains, it risks alienating VMware’s existing customer base, pushing them toward cloud-first solutions. As more organizations pivot towards AWS, it could disrupt the traditional virtualization market and accelerate the shift towards public and hybrid cloud models.

Companies that had previously hesitated to move their mission-critical applications off VMware now have a financial incentive to explore cloud alternatives. This could lead to a snowball effect, as more businesses see the success of their peers in AWS and follow suit, further boosting AWS’s dominance in the cloud space.

Also see:
Incentives and Options for VMware Migration to AWS  

VMware to AWS migration: A Comprehensive Guide 

Similar posts

Get notified on new marketing insights

Be the first to know about new B2B SaaS Marketing insights to build or refine your marketing function with the tools and knowledge of today’s industry.