In a move that has generated uncertainty among its customers, Broadcom has terminated Amazon Web Services (AWS)'s right to resell VMware Cloud on AWS. From now on, customers will have to deal directly with VMware, now under Broadcom's control, which raises questions about the long-term future of the product.
A Strategic Change
The rumors began last week when it became known that AWS was encouraging VMware Cloud users on AWS to migrate their workloads to AWS native services. This move confused many, and speculation grew until Broadcom's chief, Hock Tan, published a blog post to counter the "false reports that VMware Cloud on AWS could disappear."
### Impact on Customers
According to Tan, the only thing that has changed is that VMware Cloud on AWS is no longer sold directly through AWS or its channel partners. "What this means is that customers who previously purchased VMware Cloud on AWS from AWS will now work with Broadcom or an authorized Broadcom reseller to renew their subscriptions and expand their environments," he wrote on his blog.
Nevertheless, customers with active one- or three-year subscriptions with monthly payments purchased through AWS will continue to be billed by the cloud giant until the end of the contract term.
AWS Reactions
AWS, for its part, notified its partners about the change on its AWS Partner Central portal, indicating that Broadcom had "decided to terminate AWS's rights to resell VMware Cloud on AWS as of April 30." They also invited partners to PartnerCast sessions to discuss their plans to move VMware's customers to AWS native services.
Additionally, AWS published a blog post explaining to customers how to migrate VMware-based virtual machines to Amazon EC2 using the AWS Application Migration Service Replication Agent.
Microsoft's Response
Meanwhile, Microsoft is trying to attract VMware's dissatisfied customers with its own solution, Azure VMware Solution. They offer incentives such as one-time Azure credits of up to $120,000 when purchasing a new Reserved Instance, and the ability to run Windows Server and SQL Server hosted in the cloud with no additional licensing costs and with free Extended Security Updates. They also offer the option to secure a five-year Reserved Instance until June 30.
### Evaluation of Microsoft's Incentives
However, according to analyst Wes Miller of Directions on Microsoft, Microsoft's offer is not as attractive as it seems. The mentioned benefits, such as the free Extended Security Updates, are already included in Azure VMware Solution, and the main quantifiable benefit is the $120,000 credit, which provides six months of free services on Azure. The offer of a five-year Reserved Instance could attract some customers who are looking to lock in the price now, but the question is what will happen after those five years.
AWS Statements
In an update, AWS said: "We are disappointed that AWS no longer operates as a reseller of VMware Cloud on AWS, but we continue to work closely with Broadcom to serve our mutual customers. We remain committed to helping customers maximize the value of the best cloud services for their businesses, including VMware Cloud on AWS."
The end of the AWS and VMware reseller partnership under Broadcom's control marks a significant change in the sales and support dynamics for VMware Cloud on AWS customers. As customers navigate this new landscape, it will be crucial to observe how Broadcom handles the transition and how competitive offerings, such as Microsoft's, influence their decisions.
