The cat is well out of the bag that VMware costs are increasing due to their subscription-only licensing model and new minimum core requirements. For many MSPs and SMBs, VMware is no longer a viable option. But as one door closes, another one opens, and there are great opportunities for MSPs to thrive during this tumultuous time.
Be the trusted advisor (as you should already be positioned for) and help clients migrate workloads to more cost-effective environments. The top options for VMware alternatives are:
Which virtualization software alternative depends on what your clients will need. And don’t rule out a hybrid option, as that could be cost-effective as well. What's beneficial about this option is that these projects often evolve into long-term hosting relationships that, in turn, keep your business thriving.
Expanding your service offering is a great way not only to grow your business and find new opportunities, but also to give your clients another option within your service portfolio.
This option must be offered strategically, though. Adding new expertise and being market-ready to sell takes money and time that most MSPs don’t have. But if you partner with a cloud provider that already has the expertise and technology in place, it could be a whole new avenue for generating income. Net3 Technology is an example of a private cloud provider that offers a VMware replacement and strategically partners with MSPs.
By offering alternative virtualization platforms for infrastructure-as-a-service with more predictable licensing models, managed service providers can deliver competitive cloud services while maintaining healthy margins.
Another powerful differentiator is bundling additional services, such as backup and disaster recovery, into infrastructure offerings. VMware environments typically require multiple add-on solutions for backup/DR, security, and monitoring. But service providers could add greater value if all came from the same partner or solution. For example, Acronis integrates backup, disaster recovery, anti-malware protection, and monitoring directly into their data protection solution. This “bundling” allows clients to be fully protected without additional licensing costs.
Service providers that expand their cloud offerings through strategic partnerships and solutions will have a stronger value proposition than traditional VMware environments.
With AI demand outstripping supply of data center and compute capacity, the VMware cost crisis is just the cherry on top. Now is the time to understand how licensing changes can affect you and your client's IT budget, and to outline the available options.
A consultative approach helps service providers get that “sticky” relationship with their clients – the stickier the better. Being a sounding board with viable solutions may not result directly in a cost multiplier, but keeping a client that can grow is better than losing one. Reach out to your clients to review:
Encourage financial execs to join these conversations to increase trust and confirm outcomes.
The service providers who are acting now, and quickly, are positioning themselves for greater success than those who aren’t. Each VMware renewal cycle presents an opportunity to propose alternative ways to create new revenue and increase growth.