VMware waves goodbye to AWS middleman as Broadcom takes the reins

Updated Broadcom has ended the right of Amazon Web Services to resell VMware Cloud on AWS, meaning customers will now have a direct relationship only with VMware by Broadcom, casting doubt over the long-term future of the product.

Rumors have swirled since last week, when it emerged that AWS was somewhat confusingly pitching for users of the VMware Cloud on AWS service – which is hosted on AWS – to migrate their workloads to native AWS services instead.

Speculation was rife enough for Broadcom chief Hock Tan to fire off a blog post aimed at countering "false reports that VMware Cloud on AWS may be going away."

Instead, all that has happened is that VMware Cloud on AWS is no longer directly sold by AWS or its channel partners, Tan claims. Nothing to see here, folks.

"What this means is that customers who previously purchased VMware Cloud on AWS from AWS will now work with Broadcom or an authorized Broadcom reseller to renew their subscriptions and expand their environments," he says in the blog post.

However, customers who have active one or three-year subscriptions with monthly payments that were purchased from AWS will continue to be invoiced by the cloud giant for the duration of the contract term.

Amazon's cloud arm also placed a notification on its AWS Partner Central portal informing partners of the move, saying that Broadcom had "decided to end AWS' rights to resell VMware Cloud on AWS effective April 30," and inviting them to PartnerCast sessions to hear about its plans "to move VMware customers to AWS native services."

The cloud giant has also posted a blog instructing customers how to migrate VMware-based virtual machines to Amazon EC2 using the AWS Application Migration Service Replication Agent.

• AWS promotes itself as alternative to its own VMware service
• VMware by Broadcom blinks again – this time easing change for cloud service providers
• VMware's end-user compute community told to brace for 'Omnissa' shift
• Euro cloud group blasts Broadcom over VMware licensing maneuvers

VMware Cloud on AWS is an oddity in that it was jointly engineered by both VMware and AWS to operate on dedicated, bare-metal infrastructure. It is also operated as a managed service by VMware. The service is based on VMware Cloud Foundation (VCF), a cloud stack made up of several VMware software products, which Broadcom has moved to center stage post-acquisition.

Before now, customers had two options for purchasing – through VMware, with it as the seller of record and doing the billing, or by AWS, with it as seller of record and doing the billing. Broadcom has ended that, however, to ensure that it has the direct relationship with the customer in future.

Whether VMware Cloud on AWS users will be happy with this new situation is not clear. It has been said that some customers found it more convenient to be billed via AWS, along with other AWS services they use.

At the same time, it appears that Microsoft's attempt to lure disaffected VMware customers is not as appealing as it might appear at first glance.

The Redmond giant is offering VMware users a migration plan based around its Azure VMware Solution, with incentives including a one-time award of Azure credits of up to $120,000 when buying a new Reserved Instance, and the ability to run cloud-hosted Windows Server and SQL Server without additional licensing costs and with free Extended Security Updates. Customers also have the option to secure a longer, five-year Reserved Instance until June 30.

But according to analyst Directions on Microsoft, the cloud-hosted Windows Server/SQL Server benefit is already included in Microsoft's Azure VMware Solution, and Extended Security Updates are already free as long as customers are running these products on Azure.

The main quantifiable benefit appears to be the $120,000 in credits, which gives organizations six months of Azure services for free. And while a five-year Reserved Instance may entice customers seeking to lock down the price now, what happens after those five years are up?

"This migration plan isn't nearly the windfall it's being promoted to be," analyst Wes Miller commented. ®

Updated at 1645 UTC on May 7, 2024, to add

AWS told us: "We are disappointed that AWS is no longer operating as a VMware Cloud on AWS reseller but continue working closely with Broadcom to serve our mutual customers. We remain committed to helping customers take full advantage of the best cloud services for their business, including VMware Cloud on AWS."