Following its recent acquisition of VMware, Broadcom has announced that it will transition the business to a subscription-based model, removing the perpetual licenses with immediate effect.
According to the company's announcement, the industry has embraced subscription-based models as the standard when it comes to cloud consumption, and the move comes after more than a year’s work transitioning VMware away from one-time purchases.
VMware explained that by taking this step, it would be able to better serve customers with exactly what they want.
VMware goes subscription-only
“Offerings will solely be available as subscriptions or as term licenses following the end of sale of perpetual licenses and Support and Subscription (SnS) renewals beginning today," VMware explained.
VMware Cloud Foundation Division’s SVP and GM, Krish Prasad, said that the transition to subscriptions will give customers three things: continuous innovation, faster time to value, and predictable investments.
Prasad confirmed that VMware will continue to provide support “as defined in contractual commitments” for existing customers of perpetual licenses, but that they would also be eligible for “trade-in” deals to help them migrate over to subscriptions.
At the same time, the cloud computing company also announced that it would be making a “dramatic simplification” to its product portfolio. The VMware Cloud Foundation Division will offer VMware Cloud Foundation and VMware vSphere Foundation going forward. Both will also be available with optional advanced add-ons.
VMware said that the simplification is in response to customer and partner feedback and that it is designed to reduce the complexity of its offers.
The company also added that regular subscription payments will help it to focus on annual recurring revenue, which may help profit but will more than likely provide some consistency across its books.
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