- The biggest announcement to come out of the show was VCF 9.0, which saw VMware return to its focus on private cloud
- It's not clear if VCF 9.0 will be enough to win over customers and partners upset over price increases and product cuts
- Analysts told Fierce attendance appears to be down
Is no news good news? Maybe not in the case of VMware Explore. The conference typically serves as VMware’s chance to showcase its latest advancements. But analysts told us there was very little news of note from the event.
According to Moor Insights and Strategy Founder Patrick Moorhead, the biggest deal was the rollout of VMware Cloud Foundation 9.0, an update designed to simplify the rollout and management of private cloud infrastructure.
“The company positions this as ‘AWS on-prem,’ which is very provocative at the least,” he told Fierce. “VMware has matured VCF and with the addition of its ‘Advanced Services’ it looks more and more like public cloud deployed on-prem. With 80% of enterprise data still on-prem, the VCF is looking more and more able to fulfill that promise.”
Analyst Zeus Kerravala, who was in Las Vegas for Explore, similarly called out VCF as the highlight of the show in an email to Fierce.
“Over the past two years, I have seen customers moving workloads back to private clouds for privacy, more control or security. That's not to say public cloud isn't growing, both are but private cloud is growing faster right now,” he said. So, it makes sense for VMware to focus its efforts in this area.
He also noted VMware is now peddling simplicity with VCF in a way it hasn’t before.
“Historically, VMware has operated in silos and they left the stitching of the products up to the customers. Broadcom has brought those silos together and is focused on making the products simpler, which is long overdue,” Kerravala explained.
But Gartner VP Analyst Sid Nag wasn’t impressed. He told Fierce he felt like VCF 9.0 is just a repackaging of capabilities VMware already had. What’s more, he said that it seems like VMware is largely ditching its efforts to connect users into the public cloud and has gone back to its old private cloud strategy. For him, the decision to eschew the public cloud trends makes an event like VMware Explore irrelevant.
“As an analyst, I don’t want to spend my time with a company that is looking backwards. Why should I bother,” he said. “I just feel like they’re not in tune with the industry trend.”
Lingering discontent
It’s unclear whether the case VMware is making with VCF 9.0 will be enough to woo anxious and angry customers who are upset over product cuts and price increases.
Moorhead noted Broadcom already made its biggest product cuts, slashing VMware’s SKUs from the realm of 8,000 down to just four.
“Change is always tough, but [it] was required for VMware to grow and go all-in on the private cloud,” he said.
However, Jack Gold, of J.Gold Associates, said the changes have left customers on edge. “Broadcom is notorious for cutting products it doesn’t think are profitable enough. So many customers are on edge, hoping their installed products don’t get ‘pink slipped,’” he said. “I expect more ‘fine tuning’ to take place over the next several quarters, especially as Broadcom figures out how best to weave VMware into its other SW assets.”
Both Kerravala and Gold said many customers are still disgruntled about price increases Broadcom has implemented for VMware products as it switched to a subscription model, as well as its decision to whittle down VMware’s customer and partner ecosystem.
“I’ve not talked to a customer yet – and I’ve talked to at least 20 here – that has not seen a price increase,” Kerravala said. He added the increases seem to range “from a few percentage points to more than double.”
As a counterpoint, Kimball said he didn’t sense any unhappiness or discontent on the show floor, but added he wasn’t necessarily asking folks for their sentiments.
Asked why Broadcom would want to thin out its customer base, Gold explained that it takes just as much work to service a smaller customer or partner as a larger client but these deliver lower returns. For a company like Broadcom looking to maximize returns, thinning the herd is a no-brainer.
“Make no mistake, Broadcom's focus is shareholder value and I believe the company is willing to shed a significant number of customers to ensure operating margins remain high," Kerravala agreed.
Explore no more?
The analyst speculated that the 2024 event could be one of the last editions of the show. “I suspect when the contractual obligations to the venue are over, which might be next year, Explore will cease as an event,” Kerravala said.
VMware has been running its annual U.S. event since 2004, renaming it from VMworld to VMware Explore in 2022. But multiple analysts — including Kerravala, Moorhead and Moor Insights, and Strategy's Matt Kimball — told Fierce both attendance and exhibitor numbers appear to be down this year (though Kimball noted that’s not necessarily a reflection of enthusiasm).
RELATED: Broadcom CEO hypes simplification in latest VMware blog
Though he wasn’t speaking about Broadcom or VMware specifically, Kimball noted he’s spoken with many companies that have scaled back on conferences due to budget cuts.
Given Broadcom’s affinity for slicing and dicing to achieve maximum return on investment, it’s fair to wonder whether VMware Explore could be next on the chopping block.
“It's been a long time since I've seen a show floor this quiet,” Kerravala concluded.