VMware axes another SaaS product as Broadcom ramps up its relentless subscription model push

VMware has announced its Aria SaaS offering is the latest victim of efforts to simplify its product lineup and boost subscription rates, and will be one of many SaaS solutions no longer offered as standalone products moving forward.

Over 50 other standalone cloud services from VMWare will no longer be available as individual licenses as parent company Broadcom pushes for a subscription-only, bundle-based business model.

Some of these products will be integrated into two new bundle packages, VMware Cloud Foundation, and VMware vSphere Foundation.

Cloud Foundation is billed as VMware’s flagship enterprise hybrid-cloud solution targeting large businesses, whereas vSphere Foundation is aimed at providing intelligent operations management solutions for their mid-sized to smaller customers.

But a number of VMware's services will not be carried over or replaced in either of VMware’s new Cloud Foundation and VSphere Foundation offerings, such as VMware Sphere+, vCentre Foundation, and the Cloud Director Service. 

In December 2023,  VMware announced it would be transitioning from a perpetual license to a subscription model, following its acquisition by Broadcom.

Customers will still be able to use the perpetual licenses they have purchased for products but will not be able purchase additional licenses once the product reaches end of availability. 

Touted as a “dramatic simplification of our product portfolio”, VMware claimed this shift was in line with customer and partner feedback calling for the company to reduce the complexity of its offers and go-to-market strategies.

VMware customers “anxious about where they stand”

Some analysts have claimed enterprise customers feel there has been a lack of clarity around the significant shift in operating models. 

Speaking to ITPro, senior vice president EMEA at cloud computing company Nutanix, Sammy Zoghlami said Broadcom’s previous actions after acquiring companies has given customers cause for concern.

“What we’re hearing from many customers and prospects, especially among enterprises heavily invested in complex VMware environments, is that they are anxious about where they stand, given Broadcom’s track record in the wake of earlier takeovers”, he explained.

Zoghlami recounted two examples of the tech giant stripping recent acquisitions to the detriment of existing customers.

“Among customers, the fear that history is repeating itself is intense. Many will remember that, in 2018, Broadcom bought CA Technologies for $18.9 billion and immediately set about reducing its workforce. Chunks of the company were sold off to private equity, including its application security testing platform, Veracode” he said.

“Only a year later, customers saw a repeat performance following Broadcom’s purchase of Symantec’s enterprise security business for $10.7 billion. Bits of that business were also broken off and sold on. In line with that pattern, it has already been made clear that VMware End-User Computing (EUC) and Carbon Black business units will be divested.”

Another concern among VMware customers is changes to the company’s pricing model, with one executive at an investment management firm telling Zoghlami the change in business models will lead to a 2-5x price hike.

“One VMware customer, Phil Matuszak, technology services director of Kinship Trust Company LLC, has already bemoaned a switch away from perpetual licensing to annual subscriptions, leading to a 2-5x price hike”, Zoghlami told ITPro.

“We are being told that VMware customers want a level of choice, value and pricing certainty that they are no longer confident of getting.”