It looks a lot like VMware just lost a 24,000-VM customer

Next Global stock-market share registry operator Computershare looks like it has just decided to bail from VMware rather than suffer Broadcom’s latest licensing regime and price hikes.

Speaking during the closing keynote of Nutanix’s Next conference in Barcelona on Wednesday, Computershare's CTO Kevin O’Connor was asked how he feels Broadcom’s acquisition of VMware has played out.

O’Connor replied that when he arrived at the company 18 months ago he found "a large Nutanix estate and running on top of it was a hypervisor from a well known competitor." Cough, cough, VMware, which is entirely possible as Nutanix's stack can manage VMs running on hypervisors other than its own AHV.

The CTO felt two hypervisors was one too many and considered a consolidation, but the numbers didn’t stack up and no project was initiated.

He later received a phone call he said took place after what he described as “the change.” And in that conversation he was quoted a future price for Computershare’s non-Nutanix hypervisor that represented an increase by a factor of between 10 and 15.

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Migrating to AHV suddenly made a lot more sense and O’Connor has pulled the trigger. Over the next year, before that massively inflated bill falls due, Computershare will migrate 24,000 VMs to Nutanix.

O’Connor said the project will pay for itself in “single digit months.”

“Surprisingly, we've come out of this a lot stronger and leaner with cost base lower than it was before the acquisition,” he said without specifying which acquisition. “We're actually quite delighted it's spurred us to do what we should have done anyway.”

Register comment

The facts mentioned by O’Connor and the Nutanix emcee in the keynote give The Register a very high degree of confidence that Computershare is quitting VMware.

If so, this smells like a little bit of trouble for Broadcom because earlier today, Steve McDowell, chief analyst at NAND research, told The Register that VMware by Broadcom is “laser focused on high-revenue, high-margin business” and has priced its wares “just below the pain threshold for customers they care about.”

The Register has no insight into whether Broadcom cares about Computershare, but we do know it has concentrated its efforts on working with business that want to go all in on its Cloud Foundation stack - and the breadth of that bundle means customers are nearly always large entities.

Computershare is certainly large: The Australian company had revenue of $3.3 billion last year, its 14,000-plus staff work across more than 20 countries, serving 40,000 clients and 75 million end-customers. All of which requires 24,000 VMs, which isn't the largest fleet around but also certainly isn't trivial.

The Register imagines that calculating pain thresholds is an imprecise science. If Broadcom consistently gets it wrong then Computershare’s experience shows customers of its size and ilk will seek relief. ®

PS: Anyone else find the Broadcom website for VMware stuff is now a bit sub-par?