Scale Computing Targets VMware Sites
In the wake of Broadcom's acquisition, competitor Scale Computing is openly targeting VMware customers, specifically for remote and branch office deployments. It's positioning itself as a simplified, cost-effective alternative for edge use cases as the market adjusts to VMware's new product strategy.
Following Broadcom's $69 billion acquisition of VMware, which closed in November 2023, the company swiftly ended the sale of perpetual licenses. This forced customers into a subscription-only model, shifting software ownership from a one-time capital expense to a recurring operational cost. Broadcom streamlined VMware's extensive portfolio into two main bundles: VMware Cloud Foundation (VCF) and vSphere Foundation (VVF). This move eliminated the option to purchase many popular products as standalone solutions, compelling customers to adopt broader, potentially more expensive packages. The free version of vSphere Hypervisor (ESXi) was also discontinued. The go-to-market strategy saw a major overhaul with the termination of the existing VMware Partner Program in early 2024. Broadcom shifted to an invitation-only model, aiming to work directly with its top 2,000 strategic customers and leaving many smaller to mid-sized clients and their service providers to navigate the new landscape. Scale Computing's SC//Platform is a hyperconverged infrastructure (HCI) solution that integrates compute, storage, and virtualization into a single appliance, designed for easier deployment and management. This architecture is particularly aimed at distributed edge computing environments, such as retail or branch offices, which prioritize simplicity and remote management. To capitalize on customer uncertainty, Scale Computing launched aggressive "Rip & Replace" promotions. These campaigns include significant discounts on software, free migration tools, complimentary training, and offers to cover the remaining term of a customer's existing VMware contract for up to a year. Scale Computing positions itself on a lower total cost of ownership, claiming it can reduce costs by 40% compared to VMware. Its pricing is presented as a more predictable, all-in-one model, contrasting with VMware's post-acquisition licensing, which can be complex and lead to higher costs, especially for customers with high-core-count CPUs. The strategy appears to be gaining traction, as Scale Computing reported a 60% year-over-year increase in software sales and a doubling of its new customer acquisition rate in the third quarter of 2024, attributing the growth to the exodus from VMware.
