Chaos in the enterprise software market

Mark Ritacco at Spinnaker Support describes what has happened in the enterprise software market in the year since Broadcom’s VMware acquisition

 

When Broadcom announced its acquisition of VMware, industry observers predicted disruption. Few, however, anticipated the scale or speed at which chaos would unfold.

 

Over a year on, the enterprise software market is still reeling from the fallout, as VMware’s pivot to an “all-in” subscription-only model forces businesses to make frustrating, difficult, often untenable decisions. Customers must upgrade entirely and agree to the full VMware package— with zero flexibility, and no option to simply purchase their existing set-up in the new subscription payment format. It’s all or nothing.

 

This transition, framed by Broadcom as a move towards "innovation and value," has instead created financial strain, strategic uncertainty, and operational risk. Organisations are being pushed into a corner: accept the exorbitant costs of the upscale subscription licensing and lose critical operational flexibility, or consider stepping away from VMware altogether. For some, this even means operating unsupported—a risky prospect that leaves businesses alarmingly exposed while they search for alternatives.

 

The chaos continues to ripple through the market. Businesses have largely fallen into one of three pathways in response to the upheaval, each reflecting the tough decisions they’ve had to make.

 

Accepting VMware’s subscription model: A costly concession

For some customers who are already using the full suite of VMware, this can be a great option, and it makes sense for them to stay where they are. For other organisations, particularly large enterprises deeply embedded in VMware’s ecosystem, there’s no immediate alternative to compliance with the new subscription model. But of course, this ‘compliance’ comes at a significant cost—both financial and operational.

 

The transition from perpetual licences to subscription pricing means completely overhauling budget planning. CIOs and IT leaders accustomed to predictable, one-off capital expenses now face escalating operational expenditures. The annual costs for VMware’s subscription services often outstrip the total cost of ownership of its previous perpetual licence, placing enormous strain on already stretched IT budgets.

 

This financial impact is further compounded by the perception that value has not scaled with cost. The promise of continuous innovation rings hollow when customers find themselves footing higher bills for what feels like incremental updates. Is this really about innovation, or more about squeezing every drop from the stone?

 

The many customers who have already moved to a software subscription model might have something to say about that. These customers, who had entrusted their whole IT infrastructure on the basis of good karma with their software provider, are simply being hung out to dry when renewal season comes around. When subscription fees are hiked, there’s simply no choice but to pay the increased charges or stop using the software altogether.

 

As more and more software systems move to subscription models, take RISE with SAP and Oracle Fusion, who can really be trusted to deliver value and ROI?

 

Leaving VMware behind

Not every business can absorb the financial blow of VMware’s new pricing. For some, particularly smaller enterprises or cash-strapped public sector organisations, the only feasible option is to abandon VMware support entirely.

 

This is deeply concerning. Unsupported software leaves organisations vulnerable to security risks, compliance failures, and operational outages. Critical national infrastructure—healthcare systems, energy grids, and transport networks—are particularly exposed, as they often rely on VMware’s virtualisation technologies to underpin their operations.

 

The prospect of these systems running on outdated, unsupported platforms should raise alarms for policymakers, business leaders, and the wider industry alike.

 

Yet, despite the risks, some organisations are willing to gamble. Many are holding out for alternatives, hoping that the market will deliver viable options before their unsupported systems falter. This gamble is a reflection not just of financial desperation but also of frustration with VMware’s perceived disregard for customer needs. By forcing businesses into untenable positions, VMware risks alienating its user base—and creating opportunities for competitors to swoop in.

 

Third-party support: an iron lung

In this climate of uncertainty, third-party support providers have stepped in for those organisations caught in the crossfire of Broadcom’s acquisition. These providers provide businesses with the breathing room to evaluate their next steps without committing to VMware’s subscriptions—or risking unsupported operations.

 

Third-party support partners independently maintain their customers’ software environments—free from any individual vendor’s expectations, requirements, or timelines. What does this mean for existing VMware customers? With third-party support, they can stay on their perpetual licence, independently supported to meet regulatory standards, for as long as they want—eliminating the need to convert to a costly subscription model with VMware in the short-term.

 

One of the most immediate advantages of third-party support is its ability to shield organisations from the steep cost increases associated with VMware’s subscription pricing. By sidestepping these financial pressures, businesses can reallocate their budgets to other priorities without sacrificing essential support.

 

At the same time, third-party providers offer a tailored, proactive approach to security, ensuring organisations can maintain compliance and protect themselves against vulnerabilities, even without direct support from VMware.

 

While third-party support may not grant access to VMware’s latest features, it delivers something arguably more important: control. And with software contracts increasingly shaped by vendor priorities, third-party support empowers organisations to retain their strategic independence and take the time they need to assess their future direction. For many, this has proven to be not just a lifeline, but a practical and reliable pathway through a challenging and uncertain period.

 

What next?

The challenges facing VMware customers are part of a larger industry trend: a move towards subscription models that prioritise vendor revenue over customer flexibility and autonomy.

 

These changes are often framed as innovation and customer-centric progress, but for many CIOs and CTOs, the reality feels more like profit-driven disruption. Product support frequently becomes an afterthought, leaving organisations to navigate security gaps, compliance risks, and reduced strategic agility.

 

A year after Broadcom’s acquisition of VMware, the enterprise IT landscape is more complex—and more dominated by vendor agendas—than ever.

 

The key takeaway for businesses is clear: maintaining control over technology strategies is essential. Whether that means turning to third-party support, diversifying vendor relationships, or adopting alternative solutions, the era of dependence on a single provider for critical IT infrastructure is over.

 

The future belongs to organisations that can balance innovation with independence, leveraging the right tools and partnerships to deliver value.

 

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Mark Ritacco is Chief Customer Officer at Spinnaker Support

 

Main image courtesy of iStockPhoto.com and ArtemisDiana