The Final Act in VMware’s Odyssey: the Demise of Free ESXi
*Update: added a section on selling off VMware’s End-User Computing Division and Carbon Black to KKR investment firm
If you’ve been following the VMware Saga you know that VMware had had twists and turns being swallowed up by various bigger fish, until it regained its independence with the dramatic spin-off from Dell.
Then, in a twist worthy of any award-winning plot, Broadcom has made a move to acquire VMware for $61 billion, adding a fresh layer to the ongoing saga. To make things more interesting, the Broadcom Software Group was to be rebranded and moved to operate under the VMware brand.
It took Broadcom a year and a half to complete the VMware acquisition, which was announced back in May 2022 and only completed in November 2023.
Shortly after, Broadcom started executing an aggressive strategy, selling off VMware units, changing licensing schemes, shutting down products and topping up with axing the free edition of ESXi.
Killing Free Edition of the mythological ESXi hypervisor
Recent developments take a surprising turn, as Broadcom wraps up its acquisition and throws a curveball by axing VMware’s free ESXi offering. The irony is that this mundane notification in VMware’s Knowledge Base (KB) occurred on “I Love Free Software Day”, to add flavor to the move.
We should take a moment to pay homage to ESXi. This free hypervisor, formerly called ESX or simply “VMware hypervisor”, played a pivotal role in popularizing the concept of virtual machines in the realm of IT. It was more than just a tool; it was a gateway that introduced countless individuals to the transformative power of virtualization, back when running on bare metal servers was the common practice.
ESXi was a major part of the VMware legacy, and has also served VMware business well. The free version served as a stepping stone for many individuals entering the VM realm, contributing to the influx of new adopters. Yes, even these days in the age of Kubernetes and containerized workloads, VMs still have an undeniable role in IT. The absence of the free tier may prompt aspiring professionals to explore alternative solutions such as Proxmox and Nutanix, potentially impacting VMware’s growth.
Killing Over 50 VMware Standalone Products and Changing Licensing
In tandem with the ESXi discontinuation, Broadcom is terminating perpetual licenses, finalizing the shift in VMware’s licensing model to subscription-based. The move from per-VM to per-core licensing prompts users to reassess the economic viability of running workloads on vSphere compared to the bare-metal alternative.
This follows Broadcom’s decision to shut down over 50 standalone VMware products, another VMware Knowledge Base notification which caused quite a bit of turmoil. In a later clarification, this move was explained in the desire to simplify VMware’s portfolio. The VMware offering has now been consolidated into two main product lines: VMware Cloud Foundation and VMware vSphere Foundation.
Selling off VMware’s End-User Computing Division and Carbon Black
The twists in the plot were not over. Shortly after, in February 26th, Broadcom announced selling off VMware’s End-User Computing (EUC) Division to global investment firm KKR for $4 billion.
The EUC Division runs VMware’s remote desktop applications, VMware Workspace One and VMware Horizon, which have gained popularity following the outbreak of the COVID-19 pandemic.
Furthermore, as part of the deal with KKR, Broadcom is also selling off Carbon Black, a cybersecurity business that VMware acquired back in 2019. This explains why Broadcom rushed to take Carbon Black security business out of VMware and turn it into an autonomous business unit in November 2023, in the first act right after concluding the VMware acquisition.
Endnote
As the Broadcom-VMware saga unfolds, we witness an aggressive restructuring of VMware driven by Broadcom, shedding off and consolidating offering to align with its business strategy, which brings up flashbacks from VMware’s saga with Dell-EMC.
This joins the virtual dilemma on “I Love Free Software Day.” As we see vendors challenging the Free and Open Source Software movement, it remains to be seen if the community can gather momentum behind real FOSS alternatives.
“Broadcom’s acquisition of VMware has been awesome for everyone except VMware customers, partners, and employees.” said Corey Quinn of The Duckbill Group. The legacy of ESXi and the future of VMware stand at a crossroads, awaiting the next chapter.
