Author: Simon Sharwood
published on 2025/01/13 in The Register
Faced with huge license cost increase, provider and customers were both happy to make migration a mission.
Exclusive. Broadcom has lost another sizable customer for its VMware platform: Austrian cloud provider Anexia has moved 12,000 VMs, some of them rented by major European businesses, to an open-source system based on the KVM hypervisor.
Anexia was founded in 2006, is based in Austria, and provides cloud services from over 100 locations around the world by placing equipment in third party datacenters. Clients include remote access and control vendor TeamViewer, and airline Lufthansa – plus plenty more outfits that need reliable hosting and service to match.
CEO Alexander Windbichler told The Register that after Broadcom acquired VMware, increased licensing costs, and made big changes to its partner program, Anexia remained eligible to operate a VMware-powered cloud.
News ways with KVM
But Windbichler felt he couldn’t afford to continue, because Broadcom offered new terms that saw the cost of VMware licenses rise sharply. The CEO preferred not to enumerate the increase precisely however The Register understands it exceeded 500 percent.
Whatever the actual figure, Windbichler said the cost increase “Would have been existential for us.”
“We used to pay for VMware software one month in arrears,” he said. “With Broadcom we had to pay a year in advance with a two-year contract.” That arrangement, the CEO said, would have created extreme stress on company cashflow.
“We would not be able to compete with the market,” he said. “We had customers on contracts, and they would not pay for a price increase.”
Windbichler considered legal action, but felt the fight would have been slow and expensive.
Anexia therefore resolved to migrate, a choice made easier by its ownership of another hosting business called netcup that ran on a KVM-based platform. Another factor in the company’s favour was that it disguised the fact it ran VMware with an abstraction layer it called “Anexia Engine” that meant customers never saw Virtzilla’s wares and instead worked in a different interface to manage their VM fleets. The hosting company is also a big user of NetApp storage, so customer data was already stored in a resource independent of its VMware rig – any new VMs would just need to be pointed at existing volumes. A further fortuitous circumstance was that KVM can boot virtual machines created with VMware’s VMDK format.
Windbichler and his team felt that netcup’s platform could be upgraded to meet the needs of Anexia’s clients, some of whom use it to host mission-critical realtime workloads that demand low latency, and that Anexia engine could be adapted to work with a KVM back end.
But the terms of Anexia’s licenses meant it had a handful of months to get the job done before price rises and a two-year subscription kicked in – and less time to convince customers who signed up for VMware-powered services that the new platform would do the job.
‘Fighting for a cause’
Windbichler felt customers would oppose the move, so created a presentation in which he pitched the move as more than a cost-saving migration.
“We said we are fighting for a cause,” he said. “I did not expect that customers would care about that, but they were happy to do it.”
Among the factors that he feels got customers over the line were media articles about Broadcom’s actions, including some from The Register.
Through early 2024, Anexia’s developer team worked to improve the netcup platform and create a simple migration tool. The result was an agent that runs on a guest VM and presents info in Anexia engine that helps customers understand if a VM is ready to move from VMware to KVM.
If a customer agrees to migrate, it takes one click and a brief pause for a VM reboot – an act which maps a VM to storage and converted it to the appropriate virtual disk format– and workloads resume as if nothing had happened.
Windbichler said the migration tool was delivered in time for all Anexia customers, and their 12,000 VMs, to migrate by May 2024.
The process wasn’t easy, as the migration process meant that for a brief time two instances of a VM would exist, requiring more hardware capacity than the company might possess in some of its locations. Careful resource management planning was needed, as some customers could not easily find a change window and it was hard to ensure servers and storage would be ready for the move. Anexia pulled it off without having to alter its physical fleet, which given its widespread operations would have added enormous complexity to the project.
Broadcom ‘lost all the trust’
The CEO rates the project the most complex thing Anexia has done, and in conversation with The Register was full of praise for his team who he said did amazing work and now feel they were part of a once-in-a-lifetime effort.
That team is now growing, as without VMware bills – and all customers still aboard – Anexia’s balance sheet is in good shape.
“We have free budget to work on the open source solution and make us sovereign for us and our customers,” Windbichler said.
The CEO thinks more companies will move from VMware.
“I do not believe Broadcom will be successful,” he told The Register. “They lost all the trust. I have talked to so many VMware customers and they say they cannot work with a company like that.”
Regulators are also interested in Broadcom’s practices, he said. As Anexia tried to understand the impact of the VMware acquisition, it engaged with industry group Cloud Infrastructure Services Providers in Europe (CISPE), which was able to arrange meetings with EU officials. Windbichler believes those engagements led to some of Broadcom’s concessions to its channel. The CEO also found Austria’s competition authorities receptive. ®
Here you can find the original article: The Register