VMware is set to make more of its products available as a service and says it is anticipating some customers wanting their entire VMware purchasing done through a subscription model within three years, according to CEO Pat Gelsinger.
VMware currently offers part of its portfolio on a subscription model – the likes of AirWatch, AppDefense and Wavefront – but the vast majority of its revenue is still raked in via traditional licensing.
The vendor also offers services on a subscrption basis via partners via its VMware Cloud provider Programme.
“We’re primarily a perpetual license business, but today about nine per cent of our business is as-a-service, in the subscription business, and that portion of our business is growing about three-times faster than our overall business,” Gelsinger said.
“We expect that piece of our business to grow much more rapidly moving forward and, frankly, I expect in a year or two some of you as customers are going to tip over and say ‘that’s how I want to buy all of my products’. Today the vast majority is perpetual but clearly we expect that to become more important and we’ll have a broader set of options.
“In the next three years I expect some of you to say ‘that’s how I want to buy all of my VMware’ and we plan on having offerings in place to be able to enable that.”
Paul Casey, head of Computacenter’s solutions development unit, told CRN during a VMware partner roundtable that it’s important to remember that not all customers will prefer a subscription model.
“It depends on which customer and which segment,” he said.
“We provide innovative models because we have a lot of cash in the bank, so we’ll sometimes provide that type of facility for an end customer already anyway.
“There’s definitely a need to move towards these types of models, but we have some very specific customers that don’t want to do Opex. They like Capex, so they’re coming back to us and saying ‘how can you turn that Opex model into Capex-like for us?’
“Some of the media companies specifically aren’t keen on that sort of route so it’s about us finding that balance that helps a customer get the right platform in the right commercial model.”