35 percent of vmware workloads expected to Gartner’s recent findings indicate that VMware is poised to lose a substantial portion of its business, with 35 percent of its workloads expected to migrate to other platforms by 2028.
35 percent of vmware workloads expected to
Background on VMware and Its Acquisition by Broadcom
VMware, a leader in virtualization technology, has long been a staple in enterprise IT environments. Founded in 1998, the company revolutionized the way organizations manage their IT infrastructure by allowing multiple virtual machines to run on a single physical server. This innovation not only improved resource utilization but also simplified IT management.
In November 2023, Broadcom, a global technology company known for its semiconductor and infrastructure software solutions, acquired VMware. This acquisition marked a significant shift in VMware’s business strategy and operational model. Broadcom’s intent was to integrate VMware’s virtualization technology into its broader portfolio, but the transition has not been smooth for many of VMware’s existing customers.
Changes Under Broadcom’s Ownership
Since the acquisition, VMware has implemented several changes that have raised concerns among its customer base. Julia Palmer, a research vice president at Gartner, highlighted these issues during her presentation at Gartner’s IT Symposium in Gold Coast, Australia. One of the most significant changes has been the shift from perpetual licenses to subscription-based models. This transition has resulted in higher costs for many organizations, particularly small- to medium-sized businesses (SMBs) that may not have the budget to absorb these increases.
Impact of Subscription Models
The move to subscription pricing has led to a re-evaluation of VMware’s value proposition. Traditionally, organizations invested in perpetual licenses, which allowed them to use the software indefinitely after a one-time payment. The new subscription model, while offering flexibility, has created a recurring cost structure that can be more expensive over time. This change has prompted many organizations to reconsider their reliance on VMware products.
Bundling and SKU Reduction
Another significant change has been the bundling of products into fewer, more expensive SKUs. This strategy has alienated many customers who previously had the option to select specific products tailored to their needs. The reduction in available options has made it challenging for organizations to find suitable solutions, leading some to explore alternatives outside the VMware ecosystem.
Channel Partner Dynamics
The changes in VMware’s business model have also affected its channel partners. Broadcom has reduced the number of channel partners authorized to resell VMware technologies. This decision has limited the options available for customers seeking support and solutions tailored to their specific requirements. The reduction in channel partners has raised concerns about the availability of localized support and expertise, particularly for smaller organizations that may rely heavily on these partners for guidance and implementation.
Customer Migration Trends
As a result of these changes, many organizations are actively exploring alternatives to VMware. Palmer’s prediction that 35 percent of VMware workloads will migrate elsewhere by 2028 reflects a growing trend among customers who are dissatisfied with the current direction of VMware under Broadcom’s ownership. This migration is particularly pronounced among organizations that utilize VMware technology through hyperscalers such as Amazon Web Services (AWS).
Hyperscaler Influence
Hyperscalers have become increasingly influential in the cloud computing landscape, providing scalable and flexible infrastructure solutions to businesses of all sizes. However, following Broadcom’s acquisition, the company implemented restrictions that prevent hyperscalers from reselling VMware subscriptions to customers using their cloud services. This change has significant implications for organizations that rely on both VMware and hyperscaler platforms.
Many customers using VMware through hyperscalers are now being pushed towards public cloud solutions that do not rely on VMware technology. This shift is not merely a matter of preference; it is driven by the need for cost-effective solutions that align with the evolving cloud landscape. As hyperscalers continue to innovate and expand their offerings, organizations may find it increasingly difficult to justify their continued investment in VMware products.
Implications for the Industry
The anticipated migration of VMware workloads has broader implications for the virtualization and cloud computing industries. As organizations seek alternatives, competitors such as Microsoft Azure, Google Cloud Platform, and other cloud-native solutions stand to benefit from VMware’s challenges. These platforms offer robust virtualization capabilities and may provide more favorable pricing structures, making them attractive options for businesses looking to transition away from VMware.
Long-Term Viability of VMware
The long-term viability of VMware as a leading virtualization provider is now in question. The company’s ability to adapt to the changing landscape and address customer concerns will be critical in determining its future. If VMware fails to regain the trust of its customer base and adapt its offerings to meet evolving needs, it risks losing its competitive edge in the market.
Stakeholder Reactions
Reactions from stakeholders, including customers, industry analysts, and channel partners, have been mixed. Many customers express frustration over the changes implemented by Broadcom, particularly regarding pricing and product availability. Some have begun to actively seek alternatives, while others are waiting to see how VMware responds to these challenges.
Industry analysts, like Julia Palmer, are closely monitoring the situation. They emphasize the importance of understanding customer sentiment and the factors driving migration decisions. As organizations weigh their options, the insights provided by analysts will be crucial in shaping their strategies moving forward.
Conclusion
The landscape for VMware is shifting dramatically as a result of its acquisition by Broadcom and the subsequent changes to its business model. With 35 percent of VMware workloads expected to migrate elsewhere by 2028, the company faces significant challenges in retaining its customer base. As organizations increasingly explore alternatives, the implications for the virtualization and cloud computing industries will be profound. The coming years will be critical for VMware as it navigates this transition and seeks to regain the confidence of its customers.
Source: Original report
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Last Modified: September 12, 2025 at 12:37 am
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