Broadcom expanded its VMware portfolio Wednesday, adding a lower-cost virtualization offering for smaller environments with up to 128 cores across all deployments. The subscription-based product includes vMotion, high availability, distributed switching, patch management and TPM security capabilities, the company said in the announcement.
The product is available immediately through authorized resellers and distributors. Broadcom has not disclosed pricing but said Express will cost significantly less than the full VMware vSphere Foundation and VMware Cloud Foundation bundles. A one-year vSphere Express bundle is currently listed on the TD Synnex marketplace for $9,600, or $75 per core.
The launch comes as Broadcom reports more than 2,600 VMware Cloud Foundation 9 customer deployments representing more than 24 million allocated cores as of September. It also marks a renewed emphasis on midmarket customers following a VMware portfolio overhaul that prioritized comprehensive enterprise offerings.
With the introduction of VMware vSphere Express, Broadcom is signaling a renewed push into the SMB market it has largely overlooked in the three years since it bought VMware and revamped the product portfolio and partner ecosystem.
The changes — which included eliminating perpetual licenses, streamlining SKUs and reducing the number of authorized partners — left many smaller customers and their channel firms feeling abandoned and drove some to migrate to other virtualization providers.
In September, Paul Turner, chief product officer of Broadcom’s VCF division, acknowledged to the Register that VMware had “too big a focus on VCF” and recently adjusted incentives that steered customers toward the larger suite.
Broadcom characterized Express as a sign of its attention to buyers of all sizes.
"We are committed to all customers across all segments, and vSphere Express is a clear expression of that," Prashanth Shenoy, VP of product marketing for the VCF division, told Channel Dive.
Shenoy said vSphere Express comes after Broadcom reassessed its portfolio at the start of its fiscal year and, as a result, is "launching a new offering for customers with smaller virtualization environments." Express runs on the same underlying vSphere 9 technology as VMware's more comprehensive platforms, but with fewer features and without requiring a full private cloud approach.
The channel challenge
The vSphere Express structure and purchasing restrictions could complicate Broadcom's affordability pitch. C4C Group, a technology consultancy specializing in VMware renewals, said reseller and distributor briefings indicate customers must pay for 128 cores even if they don't need that many. In addition, the package is limited to one non-expandable license per customer, per C4C.
German reseller Software-Express reported that Broadcom must approve purchases and determine which existing VMware customers qualify for the offering. Broadcom has described vSphere Express as a per-core subscription but has not publicly detailed specific restrictions.
Meanwhile, Broadcom is turning to partners to sell vSphere Express. Shenoy defended Broadcom's channel strategy, which eliminated VMware's lowest reseller tier and instituted tighter partner requirements. He said the company wants partners "who can architect, sell and service a complete platform rather than just fulfill product transactions."
"That's a different bar than counting logos, and it's the right one," Shenoy said.
Shenoy said the commercial segment, which includes SMBs, is entirely channel-led. "We don't need to add new partners to sell Express or reach the SMB market; we're going to reach smaller customers through the partners we have today, the ones who have already committed to Broadcom and to this platform."
Gary Chen, research director for software-defined compute at IDC, attributed VMware's delayed attention to SMBs to the priorities that followed Broadcom's acquisition.
"From my conversations with VMware, they never intended to leave the SMB market," Chen told Channel Dive.
He said enterprise accounts took priority after the acquisition, with VMware only now able to expand its focus.
"As you know, partners are the route into SMB, so you have to have the partners in order to actually deliver the product," Chen said.
Winning back businesses that have already migrated to competing virtualization platforms could prove tough for VMware by Broadcom, though.
"It's way easier to retain a customer than to try and get one back," Chen said.
Organizations that have already switched face contractual commitments and the expense of another migration, Chen explained. And, for Broadcom, fixing damaged relationships presents another hurdle.
"[I]t's not just about having the right packaging and price, the trust and relationship is also huge," Chen said. "And if customers felt ignored or treated badly, that's a lot harder to repair."
Chen predicts Broadcom faces a long road to rebuilding VMware's position in the market.
"I think the priority now is going to be retention, to keep the customers they have coming up for renewal and then longer term come up with a plan to win back customers who've already left," he said. "Getting that trusted relationship status takes a long time to rebuild. VMware's going to have to prove that they're committed to this market.”
