In November of 2023, infrastructure software specialist Broadcom completed the acquisition of virtualization firm, VMware. While tech acquisitions are a dime-a-dozen in the enterprise landscape, this acquisition in particular caused a great deal of controversy when the new owners forcefully instated a mandatory subscription model for all customers, including legacy clients.
While the subscription model can be a suitable avenue for some services and platforms, it can be an inefficient and overly-costed solution for some businesses. To fully understand how to manage a potential vendor lock-in, ERP Today reached out to third-party support specialist Spinnaker Support, with Spinnaker’s Chief Customer Officer, Mark Ritacco, and VP of AI and & Transformation, Chad Stewart, sharing their thoughts on what firms can do to dodge any forced subscriptions while also maintaining operational resilience, robust risk management and efficient time-to-value.
The restriction of subscription
The acquisition of VMware by Broadcom ushered in a new age of subscription models for previous VMware customers. Broadcom’s leadership removed the now-paradoxically-labeled perpetual licenses and instated a subscription model. No longer could some enterprises pick and choose exactly what virtualization solution they needed – which allowed for easy cost management – but now users had to pay subscription fees for bundled software packs, packs they would potentially only use a small portion of.
The forced subscription is something Mark Ritacco wanted to focus on in our conversation, highlighting where third-party support could be the solution some enterprises didn’t know existed.
“They’re not ready to be forced to make a decision that’s so important to them, both from timing and budget, so we allow them to stay the course until a future time where on their timeline they can determine whether to stay with VMware or move elsewhere,” Ritacco explains.
Unfortunately, the subscription model meant some firms could face a potential price increase of 100 – 500 percent. In an industry where IT budgets are typically set in stone, the VMware subscription changes have forced many companies to scramble for more cash just so they could maintain business operations.
Upgrading on their own terms
Spinnaker Support’s previous experience with a Nordic company that was facing a potential vendor lock-in demonstrates how many firms actually have more options than they might initially believe. The Scandinavian firm in question was given a choice by its on-premise software vendor, who applied pressure to upgrade to the latest Oracle version despite the firm’s IT roadmap and strategy moving away from on-premise ERP tech.
“They came to us many years ago, on their Oracle estate, and felt the pressure of upgrading and continuing on a journey with Oracle that they weren’t quite comfortable with because they knew they wanted to migrate to the cloud,” Ritacco explains, reflecting on what is a common sentiment for many Spinnaker users looking for more flexibility. Once the firm reached out to Spinnaker, however, the decision was made to step out of the Oracle contract and maintain course on the current, soon-to-be-outdated platform.
Expertise from Spinnaker Support is what helped provide the confidence needed to regain control of IT strategy. By helping maintain potentially out-dated software, companies can decide exactly when they want to implement new technology, rather than being dictated on when to upgrade based on vendor decisions.
“When they moved to Spinnaker, [their Oracle system] was absolutely under control and it was a stable version. They [the client], all of a sudden, were able to focus their dollars and their priorities on other areas of their IT strategy and roadmap that needed attending, care and feeding,” says Ritacco.
Spinnaker Support helped maintain the Oracle environment while the business in question could focus on more innovative work and reinforcing resilience. Eventually, after a few years of Spinnaker maintenance, the Nordic company was comfortable enough to transition to the cloud and the next step of its digital evolution – all at its own pace.
Regaining control of IT with the aid of AI
Spinnaker Support has a track record of being able to demonstrate exactly where third-party support can be most effective. That said, there’s still an aspect that can be utilized to help enhance decision making when it comes to IT strategy: AI.
While artificial intelligence is a common buzzword with every new tech announcement, the reality is that ERP capabilities can be greatly enhanced with the addition of AI to common business practices and processes, and third-party support that can provide AI advisory services, like Spinnaker’s, could help businesses reach success with their AI projects. VP of AI & Transformation, Chad Stewart, explains a common question that needs to be asked by all IT leadership regarding implementing artificial intelligence:
“Are the solutions you’re building going to be a strategic asset for the company? Or are these things commonplace in the market? You’re not going to hire a team of AI experts to build something you could easily buy from Salesforce, Microsoft etc.”
“I think it really starts with understanding the propriety data […] where do they [the customer] see the most value?” Stewart continues, addressing what aspects of AI integration clients should focus on. “How does that align to AI’s true capabilities that can be applied to businesses today?” With Spinnaker Support, businesses can gain access to real-time data access and analysis that better help integrate AI tools and platforms, thus achieving quicker value-to-time.
Leveraging the power of AI requires robust protection of sensitive data. AI can churn through and process gigabytes of customer and business data in seconds – it’s vital this kind of critical business information is kept secure from any nefarious actors. Effective third-party support will assess the ERP environment for any security loopholes that might appear during AI integration. With Spinnaker Support, VMware users can continuously monitor and maintain security measures so any issue may be promptly addressed.
To truly take advantage of AI capabilities, data has to be optimized. Before integration and protection, optimization must take priority – that means cleaning, preparing and structuring data so it’s ready for immediate AI analysis. Organizations can achieve AI apotheosis by implementing data quality management practices, and firms like Spinnaker Support can help enterprises attain accurate outcomes by making sure data is of the highest quality. In the end, effective utilization of AI capabilities can help streamline maintenance of a business while internal IT teams focus on more pressing business issues.
Sidestepping lock-ins by leveraging third parties
Should any vendor out there expect existing customers to adhere to new, inefficient subscription models, rest assured that organizations shouldn’t feel beholden to their Original Software vendors.
Retaking control of IT strategy means assessing the big risk: can an organization afford to sink money into an expensive subscription model where more than half the software won’t be used? Or is it better for IT strategy altogether to tread water, take a moment, examine the surroundings and decide what’s best for the organization’s future while a third-party helps maintain the background noise?
The answer to that question is completely reliant on a business’ unique needs. Reaching out to third-party support can be the first step towards regaining a position in the driver’s seat. Instead of relying on a software package that leadership may not fully understand, firms like Spinnaker Support can provide the advisory and maintenance services necessary to properly prepare organizations for the future, in their own time.
Third-party support could be the solution some VMware customers didn’t know existed. Companies can decide exactly when they want to implement new tech, rather than being dictated.
