The forward-looking customer journey continues

Since we announced our updated VMware product offerings in December 2023, we have been engaging with our customers and partners about the value and flexibility VMware Cloud Foundation (VCF) provides, helping our customers get to a modernized, resilient, and secure data center. Many of our 10,000 largest customers see adoption of VCF as an alternative to a public cloud, and I am happy to report there’s been great progress as they move forward in their journey to a self-service, virtual private cloud solution that offers them at least the same ease of use and resiliency they experience with the hyperscalers, but in their own data centers.

The start of our customers’ journey to achieve a true private cloud experience is the continuation of our own journey to invest in making VCF the best option for enterprises who want to keep control over their workloads by keeping them “on-prem”, while giving them the choice and flexibility on using our solutions in public cloud as well. We have done this by sharpening the company’s focus into modernizing some 8,000 disparate and confusing SKUs into four core offerings, led by VCF.

As for customers who are still considering their next steps, they can do so with the peace of mind that comes from knowing their existing active support and subscription contracts will continue to be honored, and we will assist them in choosing the solution or tool that makes the most sense for their environments and desire to modernize their data centers. Also, as I have said previously, through our engagements with them, we are committed to providing as much information as possible and answering questions as they arise. With that in mind, I want to provide answers to key questions about our product offerings and the routes to market.

Our Product Offerings

• The Modernized VMware Portfolio: Customers have a choice of adopting one of our four core product offerings. These offerings cover the entire range of our customers’ needs that were previously embedded in 8,000 SKUs – from the full VCF virtual private cloud solution (compute, storage, networking, and operations) to a simple server virtualization software tool.
• Subscription Length: We are flexible and open, with customers having choice when deciding the length of their subscriptions, whether they purchase directly from us at Broadcom or through channel partners. Either way, we will structure contract durations in alignment with our customers’ journeys.
• Subscription Price: We are flexible in the way we price, with one guiding principle: We will charge our customers based on the value we create for them through the use of our product offerings. Again, this is a journey, with customer value operating as both milestones and a destination. The per-core subscription model is the most effective way to achieve this guiding principle.
• Subscription Payment: Before the acquisition, VMware required up-front payments. Today, we offer an annual pay-as-you-go model, and just like with our contract duration, we will structure your payments as you deploy our product, because getting to a modernized, resilient, secure data center won’t happen overnight.

This combination of customer choice among our product offerings, flexible subscription length, price, and payment flexibility within our per-core subscription model highlight Broadcom’s commitment to our customers. These, together with other features we have previously highlighted, enable enterprises and organizations to optimize their IT investments according to their unique business transformation journey.

Our Routes to Market

By simplifying both our product offerings and customer choice, our customers’ route to market is less confusing and much more efficient.

• The Direct Route: For our largest customers who have the skills and the scale to deploy their own private clouds on-prem, Broadcom has dedicated teams of people with the necessary skills to support these customers directly.
• The Channel Route: There are many customers who can utilize relationships with their own value-added resellers and partners, or we can engage with these customers through our resellers on equivalent terms and conditions. Either way, the channel is open.
• The Managed Service Provider Route: For customers who choose to not run their infrastructure on prem but prefer to consume a private cloud as a service, we have set up a network of managed service providers globally who can run customer workloads on VCF.

When we acquired VMware last November, we sought to conclude one journey — simplifying VMware’s Go-to-Market approach and modernizing the focus of its product offerings. Going forward, our goal is to enable our customers and partners to be laser-focused on deploying the best and most innovative virtual self-service private cloud solution in the market.

About Hock Tan:

Hock Tan is Broadcom President, Chief Executive Officer and Director. He has held this position since March 2006. From September 2005 to January 2008, he served as chairman of the board of Integrated Device Technology. Prior to becoming chairman of IDT, Mr. Tan was the President and Chief Executive Officer of Integrated Circuit Systems from June 1999 to September 2005. Prior to ICS, Mr. Tan was Vice President of Finance with Commodore International from 1992 to 1994, and previously held senior management positions with PepsiCo and General Motors. Mr. Tan served as managing director of Pacven Investment, a venture capital fund in Singapore from 1988 to 1992, and served as managing director for Hume Industries in Malaysia from 1983 to 1988.