The balkanization of virtualization will de-throne VMware, which doesn't mind a bit

ANALYSIS VMware is about to lose its status as the undoubted leader of the virtualization market after a 20-year reign – a result it doesn’t mind one bit, but which also signals an industry-wide end to significant innovation for traditional server virtualization.

The end of VMware's reign will come slowly, then suddenly, between now and October 2027, a period that includes three dates that tens of thousands of VMware customers will have circled on their calendars to remind them of ideal deadlines by which they should change virtualization platforms or reduce their use of VMware.

And at VMware’s annual user conference, which kicks off today, the Broadcom business unit probably won’t make a new pitch for them to stay.

The VMware users thinking about an exit mostly relied on the virtualization pioneer for the vSphere and vCenter products that together let them virtualize and manage a modest fleet of servers.

Broadcom doesn’t sell those products anymore, other than as components in VMware Cloud Foundation (VCF), a bundle of compute, storage, and networking virtualization tools that together assemble a private cloud.

Broadcom insists it sells VCF for less than pre-acquisition VMware did, but the bundle is nearly always considerably more expensive than a VMware user’s last bill – and for many that means paying for VCF even when they don’t plan to use all of its components.

Many VMware users are therefore looking to reduce their VMware footprint so that if they acquire VCF, they can shift VMs that don't need it to other platforms.

Before acquisition, VMware had about 350,000 customers, and more than half of the server virtualization market.

Broadcom has all-but-said it is only interested in 10,000 to 30,000 of those customers who need VCF and will go all-in on it as their future infrastructure and DevOps platform.

In case any VMware users haven’t got the message, Broadcom’s position will become abundantly clear on three imminent dates.

The first is November 22, 2026 – the third anniversary of Broadcom’s acquisition of VMware.

Because Broadcom has a reputation for making big and hard-to-digest changes after buying software companies, smart VMware customers rushed to acquire multi-year subscriptions before the acquisition closed.

Many of those deals will expire soon.

The second date is March 31, 2027, on which VMware’s contracts with many members of its Cloud Service Provider (VCSP) program expire, leaving them unable to provide cloudy VMs powered by VCF.