VMware and AWS part ways: What’s next?

In November 2023, Broadcom purchased VMware for $69b. Their big plan was to invest in VMware Cloud Foundation. Broadcom also announced they would divest itself of VMware’s end-user computing, VMware Horizon. The other large change was the move away from perpetual licensing towards a subscription model. These licensing costs can become large for businesses, according to AWS, software licensing costs are 3x the cost of all other costs in the cloud combined. So the decision to move to a subscription model means that prices may increase.

Then, in March of the following year, rumors began of significant price hikes for users of VMware’s on-premises cloud storage. Discussions swirled of price increases of 100% to 1,200%. Users were (unsurprisingly) concerned about the huge rise in prices.

All of these significant changes created uncertainty for users, as the ITAM Insights Report highlighted. They especially impact mid-life data centers and small to medium-sized companies that can’t afford a huge price increase. These price increases are part of Broadcom’s new strategy to focus on global enterprises and cut support for smaller companies.

Then at the start of May 2024 came the bombshell news that Broadcom was ending their AWS VMware Cloud (VMC) reseller program. All clients who purchased VMware Cloud via AWS will now work with a Broadcom representative. Otherwise, they can look at other options, such as moving to be 100% AWS cloud native. To encourage the latter, AWS announced that they would now offer incentives for VMware customers to migrate to AWS cloud services.

How Do These Changes Impact VMware Customers?

The changes to VMware’s pricing have become a sink-or-swim situation. If you’re a smaller company, you can either drown under a tidal wave bill or swim towards a better alternative. 

As Ryan Norton from Relutech said, “From now on customers can focus on how do I lift and shift out of my existing Data Center and then migrate and modernize.”

“At the end of the day that's what's going to impact most customers: What is the cost to migrate these workloads? What are the holdups that we have? And how can we avoid double bubble cost? … Then for us, as migration experts, we need to think about how we get customers natively out of VMware into AWS or how do we get them out of their VMC architecture to be AWS native?”

Ryan’s closing piece of advice was “If I were a customer today, I would be reaching out to my tech partner and figuring out immediately what we need to do to get out from underneath my existing data center and start to consume on AWS native” 

If you don’t yet have a tech partner who can help you migrate properly to the AWS cloud and who can help you take advantage of the financial incentives that AWS announced we can help you.

Our MigrateOne partnership with Relutech, Xosphere, and ProsperOps is the most comprehensive migration partnership available. We can help you migrate swiftly and cost-effectively. You don’t need to panic about a possible VMware renewal or move fast to AWS without thinking about your setup. StratusGrid and our partners can walk you through your options, we can move fast if needed but migrate well.

What Are The AWS Incentives?

AWS Partners can apply for up to $400 in credits to move VMC clients to AWS by the end of the year. 

These promotional credits are available to partners who migrate accounts from VMware Cloud to become AWS users. Partners who migrate 80 or more VMs from this platform to AWS will receive $400 in credits per VM. For 40 to 79 VMs, the offer is $200 per VM.

That means that partners like StratusGrid can help you receive special credits to make migration more accessible and affordable.

Partners can also apply for additional funding on your behalf with the AWS Migration Acceleration Program (MAP). Through MAP we can guarantee up to $460K. AWS Partners have also been informed that as well as the normal MAP funding, they are creating VMware exceptions for migration and modernization funding.

These credits include up to $500k ARR for all businesses that become AWS native. If you have a Microsoft workload is Microsoft, it can stack with MAP.  Then if it’s VMware-specific there’s also a 10% higher funding amount if it is VMware-specific.

To find out more, reach out to StratusGrid, an AWS Premier Partner, for a free consultation.

What To Do If You Use VMware + AWS:

Chris Hurst, CEO of StratusGrid assured us that “AWS has a great track record of supporting products as long as clients are using them.” So you shouldn’t be concerned about AWS cutting your cloud access.

However, Hurst pointed out that long-term AWS will want to reduce the support for that service which is why they are offering incentives to migrate.

To mitigate these cost increases and structural changes, Chris advises:

“I would recommend working with an AWS partner who can assess your situation. They will look at your use case to understand if you really need on-premise workloads. A partner can put together a plan rapidly to get you to a better state. The solution may be to become cloud-native or move your operating model. My experience is that existing environments that needed to be on-premise may not need to anymore. As bandwidth and connection have improved so that companies could become 100% cloud-native.”

What Does StratusGrid Do?

StratusGrid is an AWS Premier Tier Partner with over 10 years of experience migrating to AWS environments. We are your expert guide and partner throughout the migration process, and beyond. 

Our migration methodology is mapped on the MAP framework. It works as follows:

1. Assess: We fully assess your cloud readiness and create a personalized plan that aligns with your goals. We also apply for Amazon funding at this point.
2. Mobilize: We create the foundations for the migration by using Cloud best practices. We then identify any other additional funding that may be available.
3. Migrate and Modernize: Finally, we design, migrate, and validate workloads using cloud-based services. We ensure critical operations work and can be scaled for future growth. If we can ensure any discounts or extra funding, we do that for you.

Our philosophy is to work with you to make your new AWS cloud environment fit your needs. We make migrating as smooth as possible, with minimal impact on your business. Our funding applications can also potentially save you millions of dollars.

To help our customers migrate even more efficiently, smoothly, and cost-effectively, our unique MigrateOne partnership includes other incredible players in the market. Together, we can help you offset the costs of your on-premises data centers, move applications at exactly the right time, analyze usage patterns and implement saving strategies, provide expert advice on your new environment, and improve financial transparency within AWS.

You can book a free consultation with us to talk about your migration options.

BONUS: Find Out if Your Organization is Ready for The Cloud ⤵️