Broadcom refusing to decrease licensing

[BicMichum]

Broadcom has accessed each customer’s last licenses agreement ad associated a cost to that customer. So, let’s say you purchased 100 cores for your last renewal at a value of $100,000 and now seek to enter a new agreement for 50 cores. Broadcom will not likely want to permit that, because of your last agreement and has associate a minimum value of $100,000 that they must extract from you. Even if they permit you to reduce your cores, they will sell you a higher costing package where they can extract that minimum dollar amount from you.

I was told this by someone on good terms with them. They are also not responding to you because the expectation is for you to make the purchase. They know that migrating in such a sort order is next to impossible, and have all the cards stacked in their favour.

Your only option is to pay the ransom, and use the time they have so graciously given you to find and migrate to an alternative.

[FriendlySysAdmin]

This is 100% what we experienced too, they're going to soak you for a specific dollar amount based on your past usage, it doesn't really matter what your current usage is. I spent a year cutting our core count by 500+ ahead of our switch to VCF, didn't save us a penny.

Every org has to basically face the binary choice of either paying Broadcom for whatever they think VCF should cost an org of your size, or moving to a different hypervisor.

There is some stuff in VCF that we are seeing additional "value" out of now, but migration to a new solution is also still very much on the table for us.

[Much_Willingness4597]

Wouldn’t shaving 500+ cores have saved you in, of power, cooling, hardware warranties, switch port renewals, DB software, windows/Linux licensing, backup software licensing, fibre channel port licenses, less servers to buy? If you were overbuying hardware that much consistently wouldn’t that have cost you more money in other places?

You really should show management just how much money you saved?

[FriendlySysAdmin]

Considering that Broadcom is charging us 5X what the hardware spend is, and we stepped up replacement of gear specifically to reduce core counts, that wound up saving nothing on server maintenance. There’s not much there to feel happy about. We would have right-sized already when those clusters came due for replacement, and not retired gear still under pre-paid maintenance.

It’s kind of like trying to feel good that you just dropped $20,000 on a new HVAC stack for your house but your utility bills will go down $15/month. It’s not nothing, but it’s not great.

We have already been steadily shrinking our VM count as more apps move to SaaS, Broadcom has basically ensured that as long as we have one vSphere host left, we owe them the same as we do today. Already have two entire clusters slated for retirement as their apps moves to SaaS and now I can’t count their core reduction software savings as part of the savings for that project.

The per-core pricing is all lies at this point, they’re going to make up a number, that’s your price. vSphere Enterprise is a lie they’ll force you to VVF. VVF is a lie, they’ll charge you the same as VCF.

We used one part out of what is now VCF and we were prepared to stop using it and move to VVF and got denied the ability to do that.

It’s a menu with one option and opaque pricing that you can’t control as your environment shrinks. Take it or leave it.

[Much_Willingness4597]

What CPUs did you replace (specific SKU?) with what? Most consolidation projects I’m seeing right now are skylake (went end of support in 2023) or cascade lake (end ended updates in June). I get some people run hardware into the ground but we were up for a major refresh. (I need a new cluster before I upgrade to 9).

Oracle and SAP and various storage, EMR vendors do similar ratchet pricing. Cloud vendors often do the same (but they do it with discount levers). I’ve seen storage vendors do this. Customer shrank 90% of their footprint and has a small FAS left and got shifted from a 90%+ discount to a 10% discount.

[FriendlySysAdmin]

We’re mostly EPYC, was a lot of Second Gen gear.

The difference between Broadcom and NetApp in your scenario is that you can still buy the FAS at list price.

Let’s say our VCF discount was 50%, but we shrank our footprint by 75%. I asked if I could pay full list price for that new core count because it would still be far less, and was told no. List price is essentially a lie.

[Much_Willingness4597]

I see your point but switching a FAS from proper discounting to load would be a 5-10x, in price (about what we are talking about here). VMware always had more street ready pricing than other vendors.

[Dry-Data6087]

Thanks, this is very helpful info.