Broadcom’s VMware division is riding strong momentum into its upcoming Explore event, though most of that continues to come from a laser focus on a few core offerings at the potential expense of legacy services.

VMware’s Explore event will be the second run officially on Broadcom’s dime. Last year’s event was a coming out party that laid out a stark view of how Broadcom was going to run its new $69 billion acquisition.

“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,” Broadcom CEO Hock Tan proclaimed during his keynote address last year, before adding, “we're not here to show you bright shiny objects and talking of bright shiny objects.”

Since then, Tan has ramped that serious nature toward financial gain.

The executive noted during Broadcom’s most recent earnings call that VMware had converted more than 87% of its 10,000 largest customers to the new subscription pricing model at the end of its fiscal second quarter of 2025. That growth was a substantial gain over the approximately 70% conversion rate it reported at the end of the previous quarter.

Those conversions are now being tempted by the latest VMware Cloud Foundation (VCF) 9.0 release, which the vendor said includes more than 100 enhanced or newly built features and functionality. That platform more recently gained a new support model and release cadence, which aligns with Broadcom’s timeline for VCF renewals.

“Most of our VMware contracts are typically three years, and that was what VMware did before we acquired them, and that's pretty much what we continue to do. Three is very traditional,” Tan said during the latest earnings call.

Analysts have noted that some legacy VMware customers have deep platform integrations that make it difficult to move, and that some have signed up for Broadcom’s new license and pricing models in an attempt to gain more time to figure out if a move is worthwhile.

Broadcom remains unfazed by this challenge and had made recent moves to focus in more heavily on the larger, more entrenched VMware customers. This was highlighted earlier this year when it announced the latest revamp to its VCF reseller partner program.

Broadcom’s VMware changes come as many continue to note ongoing market concerns.

Equity Research firm William Blair has repeatedly cited long-standing VMware customers as being disgruntled with Broadcom’s heavy handedness in migrating them from their legacy plans to the new offerings. There has also been reported backlash from channel partners and value-added resellers (VARs) unhappy with their new financial terms and program arrangements.

One of the firm’s more recent “Enterprise Tracker” reports starkly noted “nearly all partners flagged material price increases and support deprecation as ongoing pain points, with many suggesting that this VMware renewal cycle could be the last for their customers.

“Several VARs also decried Broadcom’s aggressive, short-sighted sales tactics, perceived total disregard for midmarket customers, and thin-to-nonexistent channel margins,” the William Blair report continued. “While most VMware accounts are staying put for now due to migration complexity, a growing set of customers have moved or are contemplating moving off VMware to solutions like Nutanix, Red Hat OpenShift, Microsoft (Azure Stack/Hyper-V), HPE Morpheus, and Scale Computing, with some moving straight to the public cloud.”

Broadcom can easily counter that notion by pointing to its conversion success, but the vendor has also been more vocal recently in countering the pricing narrative. This includes a blog post earlier this week from Prashanth Shenoy, VP of product marketing for VCF, laying out a “cost reality check” for using the VCF platform.

Cloud-native boost

Shenoy had previously lauded VMware’s cloud-native offerings as also a better-than-realized value for customers. This includes the use of VMware’s vSphere Kubernetes Service (VKS), which runs in VCF.

Shenoy walked through an analysis of compute and cost requirements for an average customer running between 800 and 900 workloads in VMs and containers, which found a 50% cost savings for a customer relying exclusively on VKS.

“They have the flexibility and choice, but when we do the TCO analysis, it comes out more and more often that running natively using VKS, the container workloads is a lot more cost effective than having a two-platform strategy or running your containers on workload on bare metal, and that's where most of our customer conversations are,” Shenoy said.

Those VKS accolades align with what has been a broader push by Broadcom in updating its cloud-native offerings. VMware’s cloud-native platforms were highly competitive in the market prior to the Broadcom purchase, however those offerings have since lost some of that luster.

Gartner recently dinged Broadcom’s cloud-native offerings, noting that the vendor’s “broader portfolio remains muddled,” and clients “continue to express confusion over repeated changes” as to how VMware was offering its services, with some concerned about “if and how the different offerings are integrated.”

Gartner added that to stay competitive in the container space, Broadcom “must successfully add value that differentiates its container solutions from its cloud partners, software competitors, and hosted/managed container services.”

Broadcom recently did untether some of that reliance with a new vSphere Supervisor update that makes it easier to update and manage Kubernetes-based workloads running in VMware’s virtualized environment. More updates are expected at the Explore event.

VeloCloud unhinged

Broadcom also recently unloaded VMware’s VeloCloud SD-WAN business to Arista Networks for a reported price tag of less than $1 billion. That move unhinged VeloCloud from what had been a difficult existence under Broadcom’s umbrella.

VeloCloud was an early leader in the SD-WAN space, which attracted VMware to acquire the firm for $449 million in late 2017.

Some of that momentum slowed earlier this decade as SD-WAN vendors started to shift their focus toward secure service edge (SSE) integration and eventually toward single-vendor secure access service edge (SASE) platforms. Those markets have come to be dominated by larger players like Cisco and Palo Alto Networks, which have been aggressive in tying together SSE and SD-WAN to create SASE platforms.

VeloCloud was also hurt by Broadcom’s VMware acquisition, which put VeloCloud under the shadow of Broadcom’s own security focused networking systems and its more revenue generating focus on VMware’s private cloud and AI aspirations. Broadcom has done some work to bolster the VeloCloud product line, but most of that has been targeted at broader implications and some of that goodwill has been subsumed by Broadcom’s go-to-market changes for its VMware operations.

VeloCloud had been lauded as one of the SD-WAN market’s leading providers. Broadcom executives have claimed more than 50,000 SD-WAN VeloCloud access points have been deployed. Gartner in a report last year added that the platform was serving approximately 21,000 enterprise customers, boosted by deep product capabilities, strong market share, and strong market understanding.

Telecom slowdown

Another area where VMware has seemingly lost momentum under Broadcom is in its telecom business. VMware had made strides in becoming a trusted software-layer platform for a number of new and established telecom operators that moved toward greater virtualization of their networks, but those efforts have more recently hit turbulence.

The most prominent reversal was EchoStar’s move last year to remove its long-standing VMware-based container-as-a-service (Caas) layer within its Boost Mobile network due to what the carrier’s CTO said were untenable pricing changes.

“We felt we were not going to be price gouged, so we've made some changes on the CaaS layer that has allowed us to actually now be faster and better than what we were before, because we have open RAN and we're able to make these changes very, very quickly,” Boost Mobile CTO Eben Albertyn said during a fireside chat at this year’s CCA Mobile Carriers Show. Albertyn later adding that “the predatory pricing that showed up from VMware, price gouging from some other people is not something that we looked forward to.”

Boost Mobile had been working with VMware on the CaaS layer of its unique open network architecture. It initially announced work with VMware in mid-2020, using that vendor’s Telco Cloud platform to provide the underlying cloud platform and infrastructure to power its open radio access network (RAN)-based 5G network.

Despite the loss, VMware’s Telco Cloud remains an important part of both commercial telecom deployments and as a software layer running within equipment vendor ecosystems. However, the current VMware Explore agenda counts only a handful of sessions tagged with telecom-related content, which further highlights a dimming perspective on those operations.