Following its recent acquisition of VMware, Broadcom has announced that it will transition its operations to a subscription-based model, with perpetual licenses being revoked effective immediately.
According to the company announcementthe industry has embraced subscription-based models as the standard when it comes to cloud usage, and this move comes after more than a year of work to transition VMware from one-time purchases.
VMware explained that taking this step would allow it to better serve customers with exactly what they want.
VMware only goes on a subscription basis
“Offers will only be available as subscriptions or as term licenses following the end of perpetual license sales and support and subscription renewals (SnS) beginning today,” VMware explained.
VMware Cloud Foundation Division SVP and GM Krish Prasad said the transition to subscriptions will deliver three things to customers: continuous innovation, faster time-to-value and predictable investments.
Prasad confirmed that VMware will continue to provide support “as defined in contractual obligations” for existing perpetual license customers, but will also be eligible for “trade-in” deals to help them transition to subscriptions.
At the same time, the cloud computing company also announced that it would be making a “dramatic simplification” of its product portfolio. The VMware Cloud Foundation Division will offer VMware Cloud Foundation and VMware vSphere Foundation in the future. Both will also be available with optional advanced add-ons.
VMware said the simplification is in response to customer and partner feedback and is designed to reduce the complexity of its offerings.
The company also added that regular subscription payments will help it focus on annual recurring revenue, which may boost profits but will most likely provide some consistency on the books.