VMware Charts a SaaS Path to Multi-Cloud

VMware (VMW) has taken a big step toward consolidating access to its cloud infrastructure services and application development tools, giving VMware customers some much-needed help with porting legacy applications to multi-cloud environments.

With a three-part announcement last week, the vendor is making it easier to buy products on a subscription basis; to manage multiple products across public, private, hybrid clouds, and edge deployments; and to rationalize VMware-based applications.

VMware Consolidates SaaS Subscriptions

To start at the top: VMware has introduced VMware Cloud Universal, a new model available now that allows customers to buy subscriptions to the services sold under a VMware Cloud umbrella in a kind of nested-doll approach.

For example, customers who buy VMware Cloud Universal subscriptions have access to another subscription called the VMware Cloud Foundation subscription, which applies to the grouping of premises-based compute, storage, networking, Tanzu Standard Kubernetes, and automation services that are typical of basic VMware deployments.

From a foundational on-premises setting, VMware says customers are eager to move ahead to deploying cloud-native applications in various scenarios. To streamline this process, VMware has set it up so that VMware Cloud Foundation subscribers (who also, recall, must subscribe to VMware Cloud Universal), can apply credits toward extending their environments to VMware Cloud on AWS or VMware Cloud on Dell EMC as digital transformation progresses. Notably, though, these credit conversions aren’t yet available; customers will have to wait until the first part of 2022 to redeem them.

Also notably, VMware customers who are paying for on-premises licensing of VMware cloud infrastructure will also have a path toward converting unused licensing fees to VMware Cloud Universal credits, though specifics weren’t available at press time.

One Console to Manage Them All

Subscribers to the VMware Cloud Universal subscription also have another new option: They can manage their VMware infrastructure software via the VMware Cloud Console, a currently available centralized operations portal for managing any VMware Cloud solution supported by VMware Universal.

Those solutions supported by the console include — besides VMware Cloud Foundation, VMware Cloud on AWS, and VMware Cloud on Dell EMS — vRealize, a service supporting development and automation of applications in hybrid and multi-cloud environments; and VMware Success 360, a service that avails cloud customers of professional services from VMware.

And there’s more: namely, a new VMware App Navigator service, in which VMware practitioners work with customers to prioritize, strategize, and track their digital modernization efforts.

VMware Solutions Less Byzantine, More Buyable

All of the above spells progress for VMware, whose complex structure of products and pricing — and even naming of solutions — has reportedly been a challenge for customers, despite the vendors efforts to integrate its wares. Simplifying it all makes everything more buyable. And putting it all on a flexible subscription basis will not only benefit cost-conscious customers but could enable VMware to profit more from its cloud offerings.

Indeed, VMware has set its sights on growing subscription revenue. In its latest quarterly financial report in February 2021, VMware highlighted growth of 27% in software-as-a-service (SaaS) and subscription revenue year-over-year for the quarter. And for the full fiscal year preceding the report, SaaS and subscription revenue was $2.6 billion, comprising 22% of overall revenue. The company is guiding toward more from subscription and SaaS revenue than license revenue next year.

“We're committed to executing at scale as we continue to build our subscription and SaaS business,” said Zane Rowe, CFO and interim CEO of VMware, on the earnings call in February.

With this announcement, VMware has taken a step toward making that guidance a reality by widening its use of a pricing model that’s become standard in the cloud world, particularly among competitors such as IBM’s Red Hat. VMware is also moving swiftly to better articulate the challenges faced by its customers, while making its solutions more accessible. How well it all works should be revealed in quarterly numbers this year.