[Jedd]

> Even with severe churn, VMWare would make around $12.8-13B.

Down from the $13.4B -- that's not 'severe churn' you're describing there, it implies only a few percent drop in revenue. We've yet to see if that's the likely outcome here, but touchy-feely sentiment suggests that it'll be worse than that.

> Large customers are sticky.

Isn't TFA a precise counter-point to that assumption?

[alephnerd]

> that's not 'severe churn'

Companies do not churn 100% customers.

Most cases "severe churn" is counted as 80-100% NRR as customers are on multiyear contracts that are much more expensive to break than they are to wait out.

> Isn't TFA a precise counter-point to that assumption?

The customer was already a Nutanix customer, so the hard work was already done.

Basically, this customer was using BOTH Nutanix and VMWare internally (I am VERY surprised how the previous CFO did not get fired for something like that), and because they already had the Nutanix knowhow and licenses, migrated fully to it.

For reference, this article was written by the Register journo who was at Nutanix .NEXT (Nutanix's corporate conference).

[pch00]

> Basically, this customer was using BOTH Nutanix and VMWare internally (I am VERY surprised how the previous CFO did not get fired for something like that), and because they already had the Nutanix knowhow and licenses, migrated fully to it.

Why do you think that? Not putting all of your eggs into a single vendor basket seems like a solid plan - if anything the Broadcom/VMware disaster supports it.

[alephnerd]

> Why do you think that

Have you ever seen Nutanix's pricebook as well as VMWare's?

Spending 2x on hypervisors is dumb because now you need 2x the headcount on SMEs because you'll need both a Nutanix and VMware SME, as well as 2x the contract negotiations, and the money you are spending on both could have been better spend improving your product or hiring more people to sell your product.

It's a bad use of capital. At the end of the day, Infra is a cost center. It's something used to keep the lights on, but doesn't expand your TAM.

[pch00]

> It's a bad use of capital. At the end of the day, Infra is a cost center. It's something used to keep the lights on, but doesn't expand your TAM.

Indeed it is and while CFOs may not completely understand the technology they do understand risk and if the CTO has flagged "single vendor" as a risk then the CFO will go with that.

[alephnerd]

I also wouldn't be surprised if pre-Broadcom VMWare APJ AEs gave these guys a sweetheart deal just to make logo/ACV quota in their region. Shenanigans like that were VERY common at VMWare before the acquisition. Their SalesOps was horrid.

[benterix]

And yet, every single large company I worked for had AWS, Azure and Google Cloud, without exception. Many also have extensive on-prem resources.

Also, the contract negotiations you mentioned work much better if the competitor is already well present in your company.

[alephnerd]

> every single large company I worked for had AWS, Azure and Google Cloud,

Multi-cloud is different from on-prem related stuff like multi-hypervisors, because there are multiple billing methods, the muscle to migrate is much better built in the industry, and your cloud costs can be placed within R&D (which traditionally gets way more leeway due to tax benefits) whereas any IT Infra spend will inevitably fall under the Finance&IT budget.

[benterix]

Of course it's very different, but it's the same in how buying the same functionality from a competitor is not a reason to get you fired unless there are other specific conditions.

[benterix]

> (I am VERY surprised how the previous CFO did not get fired for something like that)

It always make me smile how fast people on the Internet would fire CFOs without knowing the context of the situation. (Not to mention that this case proves the guy was right.)

[magicalhippo]

> I am VERY surprised how the previous CFO did not get fired for something like that

Could be they acquired another company that ran the other one. We see this with our customers all the time. They acquire a competitor, slap their name all over it, but we still have to treat them like effectively two separate customers for ages.

[alephnerd]

Good point! UBS-Credit Suisse is dealing with that right now, and heads are about to roll over that.

[Jedd]

Forgive me, but it feels like a lot of contradictions, assumptions (not in evidence), and hand-waving with this and your other comments in this thread.

You've said 'severe churn is 80-100% NRR' in one message, but in another that 'severe churn' would involve only a difference from 13.4b down to 12.8 - 13.0b (vmware / broadcom revenue).

You've said that it's foolish to have two hypervisors in play in an org, because then you're doubling up on SMEs for hypervisor infrastructure.

Computershare's revenue last FY was 3.2b -- and as per TFA they were running 24,000 VMware VMs (one can only speculate on the Nutanix VM count) -- so it seems reasonable that they'd have sufficient baseload of SMEs to split across two technologies without sending the company under. Given their YoY revenue increase from the previous year, it evidently wasn't a constraint.

You've said that multi-cloud is different (more acceptable / forgivable) to multi-hypervisor for three reasons:

   a) different billing mechanisms
   b) migration is baked into cloud services
   c) cloud budgets come under R&D rather than finance / IT

I don't know if (a) and (c) are the same thing worded differently, but I'd vigorously dispute that on-prem has only one billing method, that migration from one SaaS provider to another is 'better built into the industry' (all the players make it monumentally difficult to migrate off their platform), and with (c) I'd once again murmur 'facts not in evidence', especially in the context of TFA (Computershare)

You have not addressed that multi-cloud has the same two problems you accuse multi-hypervisor of suffering - a requirement for multiple sets of differently skilled SMEs, and 2x contract negotiations.