VMware by Broadcom: New Offerings and Opportunities

Since Broadcom announced its plans to acquire VMware, OVHcloud has been proactive in preparing for potential changes to minimize any impacts on pricing. For the past two years, our customers haven’t seen any price changes linked to VMware licensing. We have been actively developing new offerings in preparation for potential changes to license pricing. The migration from NSX-V to NSX-T is progressing rapidly, as we plan to release the VMware Cloud Director (VCD) solution in September 2024. This high availability solution will be hosted in “Stretch” mode in two data centers. We have set the stage for our customers to confidently benefit from VMware by Broadcom​​​​​​.

In the meantime, the competent authorities have approved Broadcom’s acquisition of VMware, and the plan is being rolled out, albeit more quickly than expected. Firstly, Broadcom chose to maintain a direct relationship with only 2,000 partners across the globe. These partners will act as go-betweens for the rest of the market. To ensure fair pricing, Broadcom has decided to standardize the price of its license, regardless of the sales channel or license type. By offering a single license type and price, Broadcom’s new strategy underscores its focus on cloud infrastructure. This affirms the value of the solutions we have offered our customers over the past 14 years. The vision we had in 2012 is finally becoming a reality!

Broadcom has chosen OVHcloud as one of its top global cloud partners. This standing, which stems from our extensive deployment of VMware-based servers, has enabled us to negotiate favorable pricing terms for our customers across VMware on OVHcloud, Managed Bare Metal - Essential, Dedicated Cloud, Private Cloud, SDDC, Hosted Private Cloud Premier, Hosted Private Cloud vSAN and SecNumCloud solutions. We are also laying the groundwork for the upcoming launch of our VCD Standard, VCD NSX, and VCD NSX & vSAN solutions in September 2024.

Provided that the contract with Broadcom is effectively signed, the conditions negotiated by OVHcloud should enable you to benefit from price stability for the VMware license for the next four years. As a result, until 2028, we won’t be making any changes to the licensing model of our VMware on OVHcloud and VCD solutions. We’ll continue to upgrade our offerings by introducing new hardware and software solutions.

These changes are clearly positive. We’re aware that no one likes change, especially when it needs to be implemented quickly. In fact, Broadcom’s new terms and conditions will come into effect no later than April 1, 2024.

Managing the impact

Regardless of which solution our customers use, we have implemented measures to keep price increases below 3 to 5%. Before diving into the specifics, let’s first take a look at the overall situation.

1. If you’re currently using SDDC 2018, Managed Bare Metal (Essential), VMware on OVHcloud (Host: PRE 48, PRE 96, and PRE vSAN 192), we recommend migrating your VMs live – with zero downtime – to the new Standard VCD, NSX VCD or NSX VCD & vSAN solutions. OVHcloud provides support throughout the migration process.
2. If you’re currently using a VMware on OVHcloud solution (Host: PRE 192, PRE 384, PRE 768), or one of its variants (with NSX or with vSAN, excluding PRE vSAN 192), we recommend sticking with the current solutions that will remain active and scalable.

You can consolidate your infrastructure irrespective of the case. For example, if you currently have 9-10 servers/hosts with 16 cores, upgrading to 4 servers/hosts with 40 cores would be advantageous. It’s also a cheaper option. If you have several large servers/hosts and 1-2 small servers/hosts, you may want to free up the smaller ones.

It’s entirely up to you, whether or not you choose to follow our recommendations. While the price increase is significant in the first scenario, consolidation could potentially be explored in select cases. Feel free to contact us to discuss this. In the second scenario, you can of course request migration to VCD.

Below, you’ll find the list of our packs and servers/hosts, including the previous price, the new price, and the price when migrating to VCD.

* Packs includes several hosts or Resource Pools + 2 datastores + management fees

All configurations are available here.

It’s time for our customers to choose

As previously mentioned, nothing is perfect. Broadcom has set a deadline for implementing its new pricing, which is April 1, 2024. We are therefore required to apply this new pricing. From May 1, 2024, our current customers will be billed at the new rates, which means you have a month to decide whether you want to stick with the current solutions or let us migrate your services to the new VCD solutions. As for new customers, the new pricing policy will be applied from April 1, 2024.

Option 1: You can stick with your current solution and consolidate your servers/hosts in April. Please feel free to contact us, so we can assist you in consolidating your infrastructure.

Option 2: You can migrate to VCD. As an exception, we won’t be charging the new current server/host prices during the migration process. We’ll absorb the costs of the license price increase while the migration is ongoing. Whether or not you choose to continue using the current solution, you’ll still benefit the new VCD prices right away, starting on May 1, 2024. However, our goal is to migrate to VCD as soon as we’re ready. We’ll notify you 1 to 2 weeks before your migration starts, which will be carried out with zero downtime. If, for technical reasons, a live migration cannot be done, we’ll discuss with you how best to proceed.

If you are under a long-term contract with a commitment, your prices will stay the same, and you’ll have these options when your commitment ends. Moving forward, we’re here to help you understand the impacts and how to minimize them.

Current offers and the new VCD offer

In the past, we have always included license prices with our solutions, regardless of usage, without providing a breakdown. We are committed to providing the VMware solution in the simplest and most transparent way, without any hidden costs. Therefore, our pricing will still include the choice between a per-server (VMware on OVHcloud) or all-in price per core/RAM (VCD) quantity. Our goal is to ensure this simplicity lasts a long time.

More specifically, the license is now tied to the number of CPU cores on the server/host, with a minimum of 16 cores per CPU, regardless of usage. Previously, the license was based on the amount of RAM with a minimum of 24 GB per host and only on active resources. Although this is a major change in the model, it aligns with market standards. Software providers apply charges to each CPU core.

The current offers will remain active, and be improved through hardware and software updates, just like in the previous years. You’re allocated X cores and Y RAM resources through dedicated physical servers, managed by you through vSphere/vCenter. All operations are still active, as they were yesterday.

vSphere is the platform used by OVHcloud to run VCD solutions. The VCD cluster relies on 20 to 30 servers/hosts, with each customer reserving cluster resources as a vHost with X cores and Y RAM (resource pool). The resources on this cluster are dedicated but shared. Although the interface and APIs have slight differences, the core principles are the same.

The major difference between VCD and vSphere is that on VCD resources like cores and RAM (X cores and Y RAM) are allocated statically to a VM, meaning they cannot be used by anyone else. On vSphere, customers can oversubscribe resources by sharing a hardware resource across several VMs. This cannot be done on VCD.

Your data stays on the Leclerc v3 filers, just as it does now on vSphere and VCD. The ‘live’ migration between two hosts with the same CPU (Intel) is done via vMotion.

The new VCD offers are set to be released in September 2024. To ensure our customers are ready for migration by September, we’re speeding up the deployment of VCD clusters, and will subsequently offer VCD solutions to all new customers.

Conclusion

While this licensing shift may seem sudden and its implementation abrupt, we see this acquisition as an opportunity to innovate and provide cutting-edge services. We’re optimistic that Broadcom will seize this opportunity to breathe new life into VMware.

We also hope that as a customer, you’ll find our support and the solution scenarios presented to you during this transition satisfactory. Lastly, our focus moving forward is to leverage VMware technology to bring you new and improved solutions.