More than 900 people attended the Nutanix Next Tour event in London in February. For Nutanix, many were not existing customers – the majority were customer prospects, and the ongoing concerns about VMware now being owned by Broadcom means that many people – including many attendees – are looking for alternatives.
The completion of VMware’s acquisition by Broadcom at the end of 2023 signalled a refocus on VMware’s largest customers. Broadcom’s strategy has been to move companies from perpetual licence to software subscriptions. It also changed licensing and introduced software bundles that have made the VMware platform more expensive for some customers.
During its annual VMware Explore conference in Las Vegas, Broadcom president and CEO Hock Tan said that Broadcom has simplified VMware’s product lineup from 8,000 product variants down to four core offerings.
“We’ve invested a lot to make our products easy to use and work together,” he said. “We’re taking the software you’ve grown to love and trust – VMware vSphere, vSAN, NSX, vRealize – and making it all work better together. We enable you to deploy it as a stack to virtualise your entire datacentre to create a single platform.”
For years, businesses have relied on VMware to provide server virtualisation in their datacentres. The technology is so deeply embedded in many organisations that swapping out VMware for an alternative product is seen as costly and high risk. Broadcom’s strategy is to get its enterprise customers to run workloads in private clouds built based on VCF, the VMware cloud foundation platform.
Nutanix is effectively a rival in this market, offering a software platform that provides server virtualisation, containerisation and the ability to run workloads on-premise and in public clouds, all managed via a single admin tool. For certain workloads, containerisation is often positioned as more efficient than server virtualisation, especially in organisations that are on a cloud-native journey. However, there is a significant footprint of organisations that will remain for the foreseeable future with an IT estate where VMware plays a major role.
Nutanix positions containerisation using Kubernetes as a way to enable workloads to run in multiple public clouds, A global survey conducted by Vanson Bourne of 1,500 IT and DevOps/platform engineering decision-makers around the world for Nutanix, which was recently published, reported that more than half of the organisations (54%) have containerised all their applications. According to Nutanix, this is driven in part by cloud-only organisations that are running all their applications in one or more public clouds.
Given the changes Broadcom has made to VMware, which has resulted in extra costs for some users who do not want to buy the whole VCF suite, Nutanix sees an opportunity to encourage organisations to start moving virtual servers onto its own platform. Such a migration may simply start with moving VMware virtual machines onto the Nutanix platform, but over time, Nutanix is encouraging its customers to migrate these to its alternative to VMware called AHV.
Discussing the turnout at the London Nutanix Next Tour event, Andrew Brinded, executive vice president and chief revenue officer at Nutanix, said : “We’ve had more non-customers than we’ve seen at these events before, which is very encouraging.”
Nutanix regards the situation among VMware customers as a long-term plan. The opportunity presents itself only when businesses have VMware contracts that are about to expire and decide that, given the changes Broadcom has made, it may be time to look at alternative hypervisors.
Even within organisations that decide to swap out VMware, Brinded said: “ It takes a while for them to think about where they’re going to go with and how they’re going to move. Then they have to plan their migration strategy.”
Brinded said such a migration strategy involves a multi-year project. Nevertheless, Nutanix is keen to showcase customers who are migrating away from VMware to its AHV hypervisor platform.
A phased approach to migrating away from VMware
One example is Markerstudy Group, which owns insurance brands including Coop, Gadget Cover, Purely Pets and Auto Windshields. Markerstudy Group has been a long-term Nutanix customer since migrating off legacy hardware, and what is interesting about its VMware migration is that it is occurring in stages. Compliance with financial regulations initially drove the company’s initial decision to move from a traditional three-tier datacentre architecture to hyperconverged infrastructure based on Nutanix.
To comply with Financial Conduct Authority regulations covering a requirement to have supported IT systems when handling customer transactions, CTO Nick Ovenden said there was a small window of opportunity to move from legacy hardware onto Nutanix. “We ended up flipping somewhere in the region of 1,500 to 2,000 virtual machines,” he said. This was achieved in just six weeks, moving VMware from the old hardware onto Nutanix hyperconverged infrastructure.
The company is now actively migrating these virtual machines onto AHV, the native hypervisor that Nutanix bundles with its hyperconverged infrastructure platform.
Looking at the changes that Broadcom made to VMware licensing, Ovenden said: “We had always planned to go to AHV but this gave us a mark in the calendar.”
If the company could achieve a full migration from VMware by the date Broadcom’s new licensing measures came into force, he said it would be possible to avoid the price hikes associated with the new VMware licensing.
Markerstudy Group’s overall strategy is to remove VMware and move over to AHV. However, given that the business has historically expanded through acquisitions, the commercial agreements that exist within the companies Markerstudy Group takes over need to end before the acquired companies can be moved onto AHV. For instance, Markerstudy acquired BGL Group in 2022 and there is currently a project to migrate all of BGL Group’s VMware systems onto AHV by August this year.
There is little doubt that IT departments will continue to run VMware in their datacentre infrastructure for a very long time. But paying for functionality that is surplus to requirements is costly, which is why there are many VMware customers who want to continue using the product without the full product bundle Broadcom is selling.
As Markerstudy Group has demonstrated, it is possible to continue to take a phased approach to migrate away from VMware. The fact that hundreds of people who are not its customers attended Nutanix’s London event shows that there is interest in VMware alternatives and IT leaders are likely to replace VMware as contracts expire.
