The Broadcom/VMware Dynamic Drives Changes in Workload Placement Strategy

Does the Broadcom/VMware Acquisition Have You Questioning Your Strategy?

The assimilation of VMware by Broadcom continues to be important IT industry news. There are extensive reports of cost models impacted, concerns with the partner network, and broader questions about the future of the product suite.

VMware’s deep integration into the infrastructure, combined with the absence of a 1:1 replacement, makes the course of action complex. IT organizations need objective analysis from an unbiased source.

GTSG can help. Let’s discuss, and understand:

• Where you are in the process
• What you need to build a contingency plan
• What you need to begin a multi-year migration path to a different technology or another hybrid model
• Take the next steps anywhere in between.

Broadcom’s Acquisition of VMware Creates Disruption for Many Data Center Cost Structures

Concern. From the day of the announcement in May 2022, clients expressed concern based on previous Broadcom acquisitions. Then, in December 2023, Broadcom announced the intent to divest EUC and Carbon Black, the elimination of perpetual licensing, and future support services for those who held perpetual licenses ^[i].

Over half a year later, the concern persists. ^[ii]

Communication. Changes in the partner program: Broadcom has taken strategic clients direct ^[iii] and required reapplication to the program for most partners, creating “significant concern and chaos.”^[iv]

Complexity.  For many if not most, the marketplace holds no simple “x for y” replacement.

Any change to a product as integral as VMware is to so many environments – a pillar of the data center –introduces significant risk.

Cost Models Broken. A trusted source who’s seen a lot of pricing changes (and a lot of VMware) told us, “When an expenditure which represents 20 to 30% of your data center cost structure is suddenly two to six times that- or even more- your financial model is fundamentally broken.”

In sum:

• The cost model may be broken – at a time when you were already working to reduce legacy infrastructure and data center budgets to fund growth initiatives with value to the business
• There is probably no “one-for-one” replacement for the product
• The product suite is likely tied to most, if not all, of your distributed footprint
• Just so we don’t lose the thought, there’s no inherent business benefit:  It’s purely a cost challenge.

“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”^[v]

Gartner advises that most shops need at least “a contingency plan.” ^[vi]

How do we handle it? GTSG sees the Hybrid Cloud Workload Placement Strategy as the best construct for evaluating potential alternative responses to this challenge. The model works best if we “run it from the beginning” to be sure we’re incorporating into the Guiding Principles, the organizational and human resource dynamics of this potentially wrenching change.

Attacking via the Workload Placement Strategy allows an organization to:

• Re-evaluate decisions based on the change in one critical input – cost –
• Keep in mind that cost is only one of the criteria for a proper workload placement decision
• Introduce or reconsider alternatives (whether a competitive hypervisor, HCI, or cloud migration)

The right response doesn’t necessarily require “tearing up” the workload placement strategy. If a client does not yet have a strategy, GTSG will help build one that suits the needs of the business today, and always with an eye to the future. But if the client has already done the work, all the better: we can leverage that analysis to accelerate the refinement of the existing strategy.

There is complexity associated with the support ecosystem – backup/recovery, DR, and data protection; other systems with which VMware has been integrated for 10-20 years. Much of this will require decisions and adjustments along the way.

There is an organizational impact as well: fear of change; fear of doing nothing; questions about the platform’s future.

Analysis of VMware’s Deep Integration is a Substantial Unplanned Effort for Many Clients

According to Gartner^®,

We see the effort in four parts:

• Defining what we need to accomplish
• Understanding the available “real world” alternatives
• Evaluating the alternatives and gaining approval to proceed
• Building out a detailed roadmap, and executing with the absolute minimum of disruption to the business

Evaluate and Charter the Project

Define the need. What kind of analysis is required?

• Perhaps your organization is strategic to VMware and not impacted by any of the changes
• If not, we need to understand the potential costs and implications of “doing nothing” – or at minimum, create a contingency plan
• Perhaps you are already on a path to migrate everything to the cloud, your providers have been selected and these price changes only serve to accelerate the timeline

Each scenario can lead to a different framing of the work effort.

Strategic alignment: Engage a broad team. We also need to act consistently with the guidance and guardrails the business has set for application development, hybrid cloud infrastructure, and the approach to managing technical debt.

The strategy for physical data centers may also come under review. Adding to the complexity: some organizations are already rethinking their plans to ‘exit the data center’ as they come to terms with the cost of running AI workloads in the cloud.

The breadth of these considerations demands consensus to either:

• Set a new architectural direction
• Cut costs elsewhere to fund Broadcom-driven cost increases

At a minimum, we’ll need:

• The voice of the business as expressed by application development and enterprise architecture
• Infrastructure & Operations
• IT finance
• Support functions with a stake in the direction, including:
  • Risk and Compliance
  • Security
  • Business Continuity
  • Sourcing
  • Procurement
  • Vendor Management

Define Success. Develop Guiding Principles which reflect the strategies governing, at a minimum; cloud, application development, and the data center. Guiding Principles establish the framework for what we do next, and frame the criteria used in decision modeling moving forward.

More than a software replacement decision. Of course, there’s a part of this process where we compare features and functions, benefits, and drawbacks, and build alternative solution architectures carrying “price tags” that we can compare.

Beyond the analysis of alternative architectures, there’s the complexity of integrating with the support ecosystems (backup/recovery, DR, data protection; other systems that may have been in place for years, and the organizational impact from this sudden change in a pillar of the data center.

Understand & Develop Alternatives: What, Realistically, Can We Do?

Whether it’s the creation of, or an update to, a Workload Placement Strategy, we require a deep understanding of all of the interrelationships among applications, databases, and services.

And again: with GTSG, this doesn’t necessarily mean “back to square one” in terms of the analysis. We will always leverage any information and artifacts we can to accelerate the analysis of the critical and potentially time-sensitive issue in front of us.

Once we get down to the analysis, different workloads may be looked at in different ways.

For example:

Evaluate Alternatives & Win Approval to Proceed

Good consulting provides you with a well-documented set of recommendations that explains what the alternatives were and why some were discarded, what we chose and why, and identifies the costs, resource requirements, and risks associated with each.

Looking at Workload Placement alternatives, we need to consider not only the licensing costs themselves, but:

• Migration, training, and skills acquisition
• External resources to make a change
• Opportunity costs of deploying scarce skilled resources to a project (again, with no inherent benefit to the business)
• Risks with mitigation plans defined to accompany the presentation

GTSG wants to be sure that our client is ready to answer whatever questions the funding or governance bodies might have.

Develop Roadmap & Execute

While we’re working on the business case, we’re building out the multi-year roadmap to a level of detail that can guide execution. This roadmap will consider contracts, competing business priorities, and the cost of maintaining the status quo vs the funding available to make the change.

Of course, we’ll look to consolidate – a trusted source told us of at least one effort which resulted in a 30% reduction.

From there, with all the rigor demanded by any complex workload migration, we’ll get down to the detailed planning using our T-Minus Migration Control Methodology.

And then, with the discipline rightly demanded by intolerance for service interruption, we’ll employ our proven methods for move-day management and post-migration support while advocating a governance-level commitment to a regularly scheduled review of the workload placement strategy.

Why GTSG?

GTSG brings a 100% agnostic approach with:

• Deep knowledge and hands-on experience with VMware and the VMware migration
  • Years ago, GTSG was a reseller before adopting our agnostic “consulting-only” path but retained substantial VMware expertise on staff
• Extensive hands-on ISV migration experience
• Deep skills in application and infrastructure discovery and dependency mapping
• Decades of experience with the management and governance processes that support an infrastructure’s performance and availability
• Extraordinary technical project leadership, provided exclusively by experienced practitioners

We Hope This Has Been Helpful

If we can help you evaluate the impact of the changes at VMware on your shop, or if we can help move to new platforms as non-disruptively as possible – please write us at Partners@GTSG.com. Thanks.