Co-Pilot Implementation

Windows 11 Migration

In today’s IT services landscape, early signs of recovery are beginning to emerge. While North America shows encouraging momentum, Europe remains steady, making it an optimal time for organizations to prepare for the next phase of growth.

This webinar provided insights into the IT services market in EMEA, focusing on current outsourcing pricing trends and the forecast for 2025 in key European markets. We’ll also share our observations on what European organizations expect from their IT service providers and what makes a successful outsourcing deal in today’s dynamic environment.

Watch on-demand to hear from our commercial and solution experts as they discuss strategies to prepare for upcoming deal renewals in 2025 and how to navigate the shifting IT services landscape with confidence.

What questions did the webinar answer?

• How has the demand for IT services in EMEA evolved in 2024, and what’s the outlook for 2025?
• What are the latest outsourcing pricing trends, and what is the forecast for 2025 in European markets as we start to see early green shoots of recovery?
• What do European organizations expect from their IT service providers?
• What does a good outsourcing deal look like in this shifting market?

Who should attend?

• Service providers
• Sales leads
• Category managers
• Sourcing and vendor management stakeholders

In the IT and BPO outsourcing industry, growth rates have declined over the past eight quarters, testing business resilience, challenging providers, and evolving buyer expectations. However, the market is poised to see a reversal.

Watch this webinar to hear our pricing experts reveal key commercial trends they have witnessed throughout outsourcing deals made in H1 2024. Specifically, they discussed the pricing of software and cloud platforms and outlined the potential implications of this year’s trends for buyers.

Attendees came away with an understanding of where buyers can optimize their spend, where portfolios may be losing value, and potential solutions providers can offer in light of current shifts.

What questions did the webinar answer?

• How has the demand for outsourcing services in APAC evolved in 2024?
• What are the top learnings and open questions around pricing model changes, generative AI, SaaS pricing, and their impact on commercials in IT and BPO deals?
• What is the outlook for pricing in APAC?

Who should attend?

• CIOs, CTOs, and CDOs
• IT strategy leaders and executives
• BPO department leaders
• GBS leaders managing IT and BPO outsourcing contracts
• Pricing leaders
• Solutioning leaders

Broadcom’s acquisition of VMware represents a significant shift in virtualization and cloud computing pricing, licensing, and product offerings. Explore the implications of this deal and recommendations for customers and partners to navigate these sweeping changes in this blog. Contact us to discuss.

In a move that has sent ripples through the tech and cloud services industry, Broadcom’s acquisition of VMware marks a pivotal shift in the virtualization and cloud computing landscape. This deal has led to sweeping changes in VMware’s product offerings, licensing models, and, most notably, its pricing structure.

Broadcom’s strategic move from perpetual licenses to subscription-based models and bundled offerings has significant implications for VMware’s existing and prospective customers. Let’s delve into the changes further.

How will the changes impact cost

Since being acquired by Broadcom, VMware has shifted to a more streamlined, subscription-based model as part of a strategy aimed at simplifying offerings and aligning costs with customer usage patterns.

This new strategy will impact user segments in different ways. Here’s a look at the key changes:

• Consolidation into two primary bundles: VMware has significantly simplified product offerings from nearly 9,000 product SKUs to two main bundles: VMware Cloud Foundation (VCF) and VMware vSphere Foundation (VVF)
• Transition to subscription-based models: The shift from perpetual licenses to subscription access will allow customers to benefit from recurring payments instead of one-time purchases
• Impact of core-based licensing: Moving from socket- to core-based licensing could significantly impact costs, especially for organizations with high-performance computing requirements
• Mandatory core and socket purchase requirements: The new requirement of buying at least 16 cores across a minimum of two sockets (effectively requiring 32 cores as a base) will significantly increase costs for some users
• Pricing structure adjustments: The new subscription model includes pricing tiers and bundled offerings. Discounts can range from 8% to 35%, depending on the bundle and subscription term. This restructuring might reduce costs for customers deeply integrated into VMware’s ecosystem but dramatically raise expenses for users buying single products

Market and customer reactions to the acquisition of VMware

VMware customers have reacted to these changes with concern, confusion, and frustration. The end of perpetual licenses and the initial uncertainty about continuing the partner program have been particularly contentious.

Educational institutions and small to medium-sized businesses that previously received significant discounts are now grappling with increased support costs and the elimination of traditional discount structures.

The market’s reaction has been further exacerbated by reported delays in licensing renewals and support and OEM portals not operating, disrupting license activation and support services.

Adapting to change

Customers and partners should reassess their VMware strategies in response to these significant changes. We recommend existing customers take the following steps to adapt to the situation:

1. Explore alternatives: VMware customers should identify alternative vendors to the existing VMware product stack to alleviate cost increases stemming from the new subscription model. Given this transition will require considerable time and effort, customers must consider their long-term virtualization strategy when moving to an alternate product

2. Renegotiate with VMware: Customers should renegotiate their VMware contracts while exploring options. They should seek clarifications on product bundling and renewal terms and understand the new model’s impact on their VMware product suite and total cost of ownership (TCO). In addition, customers should seek information on Broadcom’s discounts against deal term commitment and leverage this information to strike a deal that gives them maximum cost savings

3. Understand the market pulse: The unclear changes in the licensing model and pricing of VCF and VVF bundles have created uncertainty. Most customers are struggling to navigate this unprecedented change in their virtualization journey. Customers need to stay agile and informed to form effective virtualization product strategies

The outlook for the industry

Broadcom’s acquisition of VMware represents a significant turning point in the cloud and virtualization industry, with profound implications for pricing, licensing, and product offerings.

As customers and partners navigate this evolving landscape, the need for transparency, flexibility, and strategic planning has never been greater. While challenges lie ahead, opportunities also exist for those prepared to adapt to these changes. The coming months will be telling as the industry adjusts to a new era of cloud computing and virtualization services under Broadcom’s ownership of VMware.

To discuss Broadcom’s acquisition of VMware, contact Ricky Sundrani, Vaibhav Jain, and Udit Maheshwari.

Explore outsourcing pricing trends in our webinar, Delivering Commercial Value in Outsourcing Contracts to APAC Clients in 2024.

Comprehending a Cloud Service Agreement (CSA) can be difficult. With the increasing clout of hyperscalers, buyers need to fully understand a CSA to effectively negotiate with cloud service providers. Learn how to better evaluate these contracts in this blog.  

With the increased adoption of cloud services, Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure have come to dominate the public cloud space in recent years. The negotiating power of these hyperscalers has significantly increased, changing the dynamics of the CSA.

As the influence of cloud providers grows, customers need to carefully evaluate the proper terms and conditions in the CSA. First, let’s better understand the key terms:

• Cloud service agreement (CSA) – a service level agreement (SLA) for cloud computing services between the cloud service consumer and cloud service provider
• Cloud service consumer – an individual or a corporate enterprise end user accessing cloud computing resources and services from the cloud service provider
• Cloud service provider (CSP) – third-party suppliers of cloud-based platforms, infrastructure, application, or storage services
• Customer agreement – the relationship between the provider and the customer, including roles, responsibilities, and processes used by the CSP

The contract may be written according to the service delivery model selected, such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS), or Software as a Service (SaaS). CSPs can modify their contract terms at any given time.

Based on our observations, many customers have difficulty understanding these contracts. With the growing portfolio of cloud services in every organization, understanding the nuances to better negotiate contracts with service providers is crucial.

Below is a practical reference to safeguard customers’ interests.

Ten Steps to Evaluate a Cloud Service Agreement

1. Understand the roles and responsibilities properly
2. Evaluate business-level policies thoroughly
3. Understand service and deployment model differences
4. Identify critical performance objectives
5. Evaluate security and privacy requirements of the environment
6. Identify service management requirements
7. Ensure proper backup for service failure management
8. Understand the disaster recovery plan
9. Ensure an effective governance process
10. Evaluate the exit process fully

For a detailed analysis of your contracts, please reach out to benchmarking@everestgrp.com. To discuss the cloud service agreement, contact Rohan Pant, rohan.pant@everestgrp.com, and Vaibhav Jain, vaibhav.jain@everestgrp.com.

Driven by the increasing numbers of mobile workers during the pandemic, VDI implementation has rapidly grown as a secure solution that provides flexibility and cost savings. While it’s a good fit with today’s steadily growing remote workforce, VDI must be implemented properly to avoid pitfalls. Read on to learn the challenges and benefits of implementing a virtual desktop infrastructure.

Workplace infrastructure is quickly evolving. While Virtual Desktop Infrastructure (VDI) transformation has been in the industry for some time, COVID-19 has spurred its increased use to manage IT consumerization and control costs.

The benefits of implementing a virtual desktop infrastructure for enterprises can be remarkable and include easier accessibility for users, device flexibility, increased security, and lower costs. However, if not implemented correctly, VDI can bring organizational challenges. Many projects fail due to improper design leading to performance issues.

Based on our experiences helping organizations understand and optimize VDI implementation to achieve the right model for their budgets and timelines, we identified the following seven best practices:

1. Understand end-user requirements – Boot storms can be avoided by being cognizant of such details as the number of VDI users, end-user applications, and the times of day users will log in and access their virtual desktops
2. Consider end-user location – VDI architecture and resources may vary for users at different locations. Bandwidth and latency also have a big impact on the end-user experience
3. Choose the ratio of persistent or non-persistent desktops – The virtual desktop type can sometimes be determined by the user type, such as task workers, power users, kiosk workers, etc. Persistent desktops retain a user’s personal settings when they log off, while non-persistent virtual desktops do not
4. Consider client device options – A desktop virtualization benefit is that nearly any device can have a virtual desktop client. Deciding the best mix of thin client devices, converting old personal computers into thin clients, and having bring your own device (BYOD) clients are key factors in VDI deployment. Maintenance requirements and ownership will differ for each case
5. Design for high availability – While a problem with one physical desktop affects just a single user, an overall VDI failure has the potential to impact all employees. Design the underlying architecture to be highly available to avoid this
6. Craft a BYOD policy – VDI lets organizations deliver a desktop experience to many types of endpoints and devices – even those owned by end users. Carefully design and distribute a BYOD policy indicating what users can and cannot do on their personal devices
7. Factor in security – Do not overlook infrastructure security. All security best practices that apply to physical desktops/laptops also pertain to virtual desktops. Administrators should make sure to extend patch management operations to cover virtual desktops

For a detailed analysis of your VDI implementation, please reach out to benchmarking@everestgrp.com. To discuss further, contact Vaibhav Jain at vaibhav.jain@everestgrp.com.