Red Hat is one of a number of vendors that have seen increased interest from current VMware customers scouring the landscape for a potential new virtualization and hybrid cloud home due to Broadcom’s ongoing licensing changes at VMware, but timing of that opportunity remains fluid.

Red Hat’s opportunity was highlighted by IBM CFO James Kavanaugh’s expressed excitement during a Goldman Sachs investor conference earlier this year tied to the opportunity for IBM’s subsidiary.

“We're extremely excited about and have generated a tremendous amount of pipeline and client interest right now,” Kavanaugh said during Goldman Sachs’ Communacopia + Technology Conference, adding later that “we're extremely excited about the compelling value proposition that we can bring to market.”

“What it's forcing right now with the Broadcom acquisition is it's forcing every enterprise client to make platform architecture decisions, and that's going to be between virtualization and containerization,” Kavanaugh said, touting IBM’s consulting services, its Watson X generative artificial intelligence (genAI) platform, and Red Hat OpenShift. “That's why clients are coming to us with extreme interest around a growth factor that I think will play out for multiple years, and we're excited about that.”

That CFO excitement was further enhanced by IBM’s most recent earnings release, which showed its Red Hat-dominated software business as its main fiscal growth driver.

Andrew Sullivan, senior manager for virtualization and platform tech marketing at Red Hat’s Hybrid Platform Business Unit, furthered the notion of this Broadcom-driven VMware inflection point, telling SDxCentral in an interview that this has caused a pointed reaction from the market.

“My personal, anecdotal experiences this last year has been a lot of the emotional, visceral reactions to what's happened, and I think people are digesting that and now they're figuring out what those next steps are and not doing so in a panicked manner,” Sullivan said. “It's less of the ‘oh, I need to move right now,’ and more of the, ‘OK, what's my strategy going forward and how do I want to handle virtualization? Do I want to continue to have a single vendor strategy? How do I want to diversify across multiple hypervisors?’”

Sullivan added that those questions “very much triggered an out-of-cycle reevaluation.”

“I think folks are being more honest with themselves about what they need from a virtualization platform, and really giving a deep look into, ‘this was easy before and I didn't have to invest much time, effort, energy, into it, it did everything I need. Should I continue doing that? How do I again diversify?’”

Red Hat has a history of supporting virtual machine (VM) migrations onto its Kubernetes-focused OpenShift platform. This includes partnerships with long-standing VMware rivals toward piecing together more useable packages.

Sullivan added that the vendor has increased that push, with recent updates focused on easing that path.

“It's not necessarily replicating what [customers are] used to, it's keeping same themes and even the way that we phrase things and talk about things, that it makes sense to somebody who's familiar with virtualization and not Kubernetes,” Sullivan said. “My philosophy when I talk with our UX teams is stuff like where it makes sense, where it adheres to the core fundamentals of OpenShift and the way that we want users to use the platform, we can continue to do those things.”

Is Broadcom fumbling Tanzu?

Broadcom’s handling of VMware’s cloud-native Tanzu platform has further fed this self-reflection.

Broadcom has been steadily updating Tanzu over the past year, including new enhancements announced at its recent Explore Barcelona event. However, Broadcom management has been more vocal in touting the benefits of its halo VMware Cloud Foundation (VCF) and vSphere offerings, which have overshadowed Tanzu.

Purnima Padmanabnan, GM of Broadcom’s Tanzu Division, during a press pre-briefing for the Explore Barcelona event towed that company line while touting Tanzu’s benefits.

“VCF and Tanzu platform are like peanut butter and jelly, because when you have a strong private cloud with VCF, and since we are all within the same organization, very, very tight integrations,” Padmanabhan said. “What you will see is, if you are on private cloud … don't go for a bag of parts. Take VCF, do Tanzu platform and you have the full stack for application, for data, for any packages, for security, for operations, everything fully included, and that is the power.”

However, Padmanabnan in a follow-up blog post seemed to admit to the ongoing Tanzu uncertainty, noting that “one of the lessons I took from the week was that there is still confusion over the Kubernetes runtime we sell and where it sits in the VMware by Broadcom portfolio.”

This confusion was over changes Broadcom has made in moving its Tanzu Kubernetes Grid Service into VCF and giving it a new vSphere Kubernetes Service moniker.

“This move was very intentional as the Kubernetes runtime itself is just part of any modern cloud [infrastructure-as-a-service] and this being deeply embedded into the VCF stack means that more VCF customers will be ready to adopt advanced services offered by Tanzu sooner without struggling with integration,” Padmanabhan wrote. “Many existing Tanzu customers use other versions of the Kubernetes runtime (namely, Tanzu Kubernetes Grid Integrated and Tanzu Kubernetes Grid Multicloud) to meet specific requirements. Tanzu will continue to support these versions, but in the end, Tanzu Platform is designed to run on any [Cloud Native Computing Foundation] conformant Kubernetes runtime.”

That “continue to support” claim would seem pointed to ongoing concerns over the future of VMware’s legacy Tanzu platform. This was highlighted during Broadcom CEO Hock Tan’s keynote address at this year’s U.S.-based VMware Explore event.

“You’re going to see a change here at Explore this year, sorry, … because we are serious businesspeople. So are you. We are all about business at Broadcom, and we’re here to help you run your business more effectively,” Tan proclaimed, before adding, “we’re not here to show you bright shiny objects, and talking of bright shiny objects.”

Rachel Stephens, senior analyst at RedMonk, in a blog post following that event noted that Tan’s “bright shiny object” jab could spell doom for VMware services and technology outside of its core VCF platform, specifically the Tanzu platform. Stephens pointed to management commentary that could see VMware lean more on its Pivotal-based Cloud Foundry container orchestration platform instead of its Kubernetes-focused Tanzu offering built on its Heptio acquisition.

“All together, there were signals that read as the company renewing its focus on the assets from the Pivotal acquisition over the Heptio acquisition, and prioritizing solutions centered around its VM-centric past more broadly,” Stephens observed.

Others have noted that Broadcom’s sometimes paradoxical moves are opening up opportunities for vendors like Red Hat, but timing on taking advantage of those opportunities are hard to pin down.

“While the vast majority of customers have ponied up with VMware at least for another year (due to immediate challenges in shifting off), many customers and channels feel burned by Broadcom,” analyst firm William Blair noted as part of a recent enterprise survey and report, adding that this has led to disgruntled customers looking at near- to mid-term alternative offerings from vendors like Nutanix, Red Hat, Microsoft, Scale Computing, and public cloud providers.