4 ms·

Why bother repatriating to VMware? It's probably more expensive.

by wmf 3y ago

ghaff 3y ago
Yeah. Repatriation is probably an overstated trend even if companies are generally getting smarter about where and how they run workloads. But, while it's hard to migrate companies off VMware to a different on-prem solution, I'm not sure that you'll see workloads being repatriated going onto VMware (unless the company already has a large installed base).
alephnerd 3y ago
Most F1000s use ESXi by default. You can concentrate only on direct sales to F1000s and make more than enough revenue. Look at Zscaler and Crowdstrike for examples - both follow this strategy. As a business, you optimize for Net Revenue after Cost of Operation. It's always good to drop customers if it costs more to support them than the revenue you get.
- wmf 3y ago
  Right, but those companies don't benefit from repatriation. Their on-prem IT is more expensive than public cloud.
  - alephnerd 3y ago
    > Their on-prem IT is more expensive than public cloud. Not really. Most of those companies have lax Cloud Cost Management hygiene and/or the Cloud Platform team is separate from the Infra/Servers team. If you are F250 you can probably negotiate a nice discount if you are able to fully migrate to a single cloud, but most companies don't want to keep all their eggs in a single basket. This means larger organizations cannot avail competitive discounts on public cloud. By bundling Private Cloud (VMWare ESXi), Network Security (VMWare NSX), APM (CA Wiley), Endpoint Protection (Symantec Enterprise), and Data Security (Symantec Enterprise) I can purchase 5 critical pieces of Enterprise Infrastructure using a single PO. This is critical at large organizations as any PO above $30k almost always requires CFO or Comptroller approval, and a single PO to Broadcom satisfies your Infra, DevOps, and Security needs (which are all cost centers if you aren't a tech company). Btw, Broadcom themselves is almost entirely on GCP [0]. Almost all their infra and products are served using a GCP stack on the backend. [0] - https://www.broadcom.com/blog/broadcoms-transformation-journey-with-google-cloud https://www.broadcom.com/blog/broadcoms-transformation-journ...
    - wmf 3y ago
      Who do you work for BTW?
      - alephnerd 3y ago
        PE/VC in the Enterprise space now. I used to be a PM and SWE and a staffer for a hot second. Not at Broadcom but have worked closely with their team and alumni. The Enterprise Infra space is a small world. Edit: Also, I didn't realize I'm replying to an actual legend in the systems/networking space. I read some of your papers when I was an undergrad and later as an early career SWE.
    - tempnow987 3y ago
      I looked at VMware "in the cloud". It was around $50,000 - $100,000 per year for 48 cores. I've defended AWS pricing many times, mostly because of ability to burst etc. But the VMware workloads are often much flatter in terms of demand - ie, many systems just left running so the AWS value - while there of course, isn't as obvious to me.
      - alephnerd 3y ago
        "In the cloud" options are often much more expensive than what they should be due to customer expectations. The margins are much higher than in on-prem (where 80% "discounts" are common).
        tempnow987 3y ago
        Sure. That said, the cost / benefit tradeoffs often seem pretty good for AWS. The cost is low enough to other costs on a project that gain on velocity is worth it. In others gains on reliability, maintenance savings etc. Ended up doing a small on-prem solution. VMWare for 6 CPUs x 32 cores = 192 cores runs about $3K/year for the software side which is a good deal to get started. That leaves about $240K/year or so to cover other costs. Not a slam dunk necessarily, but the on-prem store with vmware is not unreasonable.
  - deleted 3y ago
    [deleted]
- crmd 3y ago
  Every single one of those F1000’s has a highly competent CTO office team with an effectively unlimited hc and budget to find a competitive alternative platform to ESX. I don’t know if Broadcom is gonna make their money back before open source gets good enough.
  - alephnerd 3y ago
    > Every single one of those F1000’s has a highly competent CTO office team I agree > effectively unlimited hc and budget I disagree. A company like Google or FB can build in-house tooling simply because they have entire dedicated teams of engineers to manage their environments in house to meet niche needs. A F10 like ExxonMobil or UnitedHealth cannot justify a FB size engineering footprint when their margins are much lower. > find a competitive alternative platform to ESX Yep. The issue is ESX is actually pretty good at getting the job done. Your alternatives from a supportability standpoint are HyperV from Microsoft (which will probably eat up the smaller ESX customers), Citrix Hypervisor (owned and operated by ex-Broadcom leadership), and IBM RedHat's KVM (which requires you to work with IBM for Professional Services). At the end of the day, you as a CTO or Platform team don't want to be fully OSS. Not because OSS is crap software (anything but), but because a pure OSS play doesn't provide you a dedicated support engineering team if shit hits the fan nor SLAs and monetary compensation if shit breaks. This is why most OSS core companies max out revenue via a Professional Services play. RedHat is a notable example of this.
    - riemannzeta 3y ago
      I have heard this colorfully and memorably referred to as "the need for a single throat to choke."
      - alephnerd 3y ago
        Pretty much
    - crmd 3y ago
      It doesn’t take Facebook level engineering to architect a substitute for VMware in 2023. Mid market IT contractors are replacing ESX for their clients en mass with proxmox. It’s only a question for enterprise until open source gets good enough.

Why bother repatriating to VMware? It's probably more expensive.

by wmf 3y ago

Why bother repatriating to VMware? It's probably more expensive.

Yeah. Repatriation is probably an overstated trend even if companies are generally getting smarter about where and how they run workloads. But, while it's hard to migrate companies off VMware to a different on-prem solution, I'm not sure that you'll see workloads being repatriated going onto VMware (unless the company already has a large installed base).

alephnerd 3y ago

Most F1000s use ESXi by default. You can concentrate only on direct sales to F1000s and make more than enough revenue. Look at Zscaler and Crowdstrike for examples - both follow this strategy. As a business, you optimize for Net Revenue after Cost of Operation. It's always good to drop customers if it costs more to support them than the revenue you get.

wmf 3y ago
Right, but those companies don't benefit from repatriation. Their on-prem IT is more expensive than public cloud.
- alephnerd 3y ago
  > Their on-prem IT is more expensive than public cloud. Not really. Most of those companies have lax Cloud Cost Management hygiene and/or the Cloud Platform team is separate from the Infra/Servers team. If you are F250 you can probably negotiate a nice discount if you are able to fully migrate to a single cloud, but most companies don't want to keep all their eggs in a single basket. This means larger organizations cannot avail competitive discounts on public cloud. By bundling Private Cloud (VMWare ESXi), Network Security (VMWare NSX), APM (CA Wiley), Endpoint Protection (Symantec Enterprise), and Data Security (Symantec Enterprise) I can purchase 5 critical pieces of Enterprise Infrastructure using a single PO. This is critical at large organizations as any PO above $30k almost always requires CFO or Comptroller approval, and a single PO to Broadcom satisfies your Infra, DevOps, and Security needs (which are all cost centers if you aren't a tech company). Btw, Broadcom themselves is almost entirely on GCP [0]. Almost all their infra and products are served using a GCP stack on the backend. [0] - https://www.broadcom.com/blog/broadcoms-transformation-journey-with-google-cloud https://www.broadcom.com/blog/broadcoms-transformation-journ...
  - wmf 3y ago
    Who do you work for BTW?
    - alephnerd 3y ago
      PE/VC in the Enterprise space now. I used to be a PM and SWE and a staffer for a hot second. Not at Broadcom but have worked closely with their team and alumni. The Enterprise Infra space is a small world. Edit: Also, I didn't realize I'm replying to an actual legend in the systems/networking space. I read some of your papers when I was an undergrad and later as an early career SWE.
  - tempnow987 3y ago
    I looked at VMware "in the cloud". It was around $50,000 - $100,000 per year for 48 cores. I've defended AWS pricing many times, mostly because of ability to burst etc. But the VMware workloads are often much flatter in terms of demand - ie, many systems just left running so the AWS value - while there of course, isn't as obvious to me.
    - alephnerd 3y ago
      "In the cloud" options are often much more expensive than what they should be due to customer expectations. The margins are much higher than in on-prem (where 80% "discounts" are common).
      - tempnow987 3y ago
        Sure. That said, the cost / benefit tradeoffs often seem pretty good for AWS. The cost is low enough to other costs on a project that gain on velocity is worth it. In others gains on reliability, maintenance savings etc. Ended up doing a small on-prem solution. VMWare for 6 CPUs x 32 cores = 192 cores runs about $3K/year for the software side which is a good deal to get started. That leaves about $240K/year or so to cover other costs. Not a slam dunk necessarily, but the on-prem store with vmware is not unreasonable.
- deleted 3y ago
  [deleted]
crmd 3y ago
Every single one of those F1000’s has a highly competent CTO office team with an effectively unlimited hc and budget to find a competitive alternative platform to ESX. I don’t know if Broadcom is gonna make their money back before open source gets good enough.
- alephnerd 3y ago
  > Every single one of those F1000’s has a highly competent CTO office team I agree > effectively unlimited hc and budget I disagree. A company like Google or FB can build in-house tooling simply because they have entire dedicated teams of engineers to manage their environments in house to meet niche needs. A F10 like ExxonMobil or UnitedHealth cannot justify a FB size engineering footprint when their margins are much lower. > find a competitive alternative platform to ESX Yep. The issue is ESX is actually pretty good at getting the job done. Your alternatives from a supportability standpoint are HyperV from Microsoft (which will probably eat up the smaller ESX customers), Citrix Hypervisor (owned and operated by ex-Broadcom leadership), and IBM RedHat's KVM (which requires you to work with IBM for Professional Services). At the end of the day, you as a CTO or Platform team don't want to be fully OSS. Not because OSS is crap software (anything but), but because a pure OSS play doesn't provide you a dedicated support engineering team if shit hits the fan nor SLAs and monetary compensation if shit breaks. This is why most OSS core companies max out revenue via a Professional Services play. RedHat is a notable example of this.
  - riemannzeta 3y ago
    I have heard this colorfully and memorably referred to as "the need for a single throat to choke."
    - alephnerd 3y ago
      Pretty much
  - crmd 3y ago
    It doesn’t take Facebook level engineering to architect a substitute for VMware in 2023. Mid market IT contractors are replacing ESX for their clients en mass with proxmox. It’s only a question for enterprise until open source gets good enough.