VMware VCF Head: Public Cloud Costs To Climb As AI Spending Soars

“Because the public cloud vendors are the ones who are building out these mega data centers and all of that for AI, when you do that kind of investment—at some point—it will reflect in the pricing across the board,” said VMware’s Krish Prasad.

VMware leader Krish Prasad says public cloud providers like AWS, Microsoft and Google are driving the memory and CPU shortages issue by building massive AI data centers, which will eventually lead to higher cloud prices.

“The public cloud [providers] are building out big data centers and all that kind of stuff, which is also going to drive up the cost of public cloud,” VMware’s Krish Prasad, who leads Broadcom’s VMware Cloud Foundation (VCF) Division, tells CRN.

For example, Google said it plans to spend between $175 billion to $185 billion on CapEx investments this year, with a focus on data centers, while AWS parent company Amazon has committed to spending $200 billion in CapEx investments in 2026.

Prasad says the VMware Cloud Foundation (VCF) private cloud has a lower total cost of ownership (TCO) versus AWS, Microsoft Azure and Google Cloud Platform, while also helping clients with memory and CPU shortages via VCF’s Advanced Memory Tiering technology.

“A typical VCF customer will see a 1X to 2X TCO improvement if you compare VCF 9 to the public cloud in terms of cost reduction,” said Prasad, who is senior vice president and general manager for Broadcom’s VCF Division.

“You look at the pricing of the public cloud, they have all these services they charge for. It’s not just the compute instance that you get from them, there is the egress and ingress fees,” he said. “There are charges that adds up over time as you move data in and out and all that stuff. … We have seen customer data that consistently shows the savings they get when they do it in on-premise with VCF.”

Businesses ‘Are Not Banking On The Public Cloud’

Prasad said VMware is seeing “tailwinds” as customers focus on private cloud infrastructure due to public cloud data privacy and sovereign clouds concerns.

“Outside of the US, there is a lot of focus on sovereign clouds, which means that they are not banking on the public cloud. They are trying to deploy private clouds, or they have their service providers deploy their own clouds for consumption within the country,” Prasad said. “All those different scenarios are now using VCF to deliver the sovereign cloud.”

These compounding issues are leading customers to rethink their AI approach.

“Enterprises are rethinking how they want to approach AI: keeping more of their data on-prem, keeping it private, keep running some of the models in your private cloud than in the public cloud— keeping data close to their vest,” he said.

In terms of businesses AI strategy, VCF gives organizations a better platform versus public cloud, specifically around data privacy, he said.

“A few years ago, we coined this term called Private AI. Our whole message is about keeping the data private and doing the processing closer to where the data is. That’s resonating really well with customers,” he said. “All of this is now tailwind to the original play around VCF, which is deploying your private infrastructure and doing it as a cloud model.”

VMware Partner 11:11 Systems On ‘Unbelievable’ VCF Vision And Investment

Top VMware channel partner 11:11 Systems said the investment Broadcom-VMware has made in building the VCF 9 platform and its end-to-end capabilities is “unbelievable,” enabling VMware partners to get a leg-up over public cloud competition.

“They’re investing [a large percentage] of VMware gross revenue in R&D with VCF 9,” said Dante Orsini, chief revenue officer at 11:11 Systems.

“This is the first time you’ve ever seen a single Dev team work on a platform together versus all the [VMware] silos that used to be there before,” Orsini said. “As a cloud provider ourselves, that’s massive, because they have a vision now where everybody is focusing on the same thing: How do you drive the best possible private cloud platform? And allow the customer to figure out how they’re going to consume it—whether it’s in their own data center or it’s in ours.”

Orsini said clients of all shapes and sizes are looking at VCF 9 as a better TCO option than public clouds.

“You’re going to continue to see this market evolve,” said Orsini. “As people start to get beyond some of the frustrations they may have had in the last 18 months, and they really look at the VCF platform—that is what gets us growing,” said Orsini.

‘90 Percent Of The Time, It’s A Partner Helping’ VCF Customers

VMware’s Prasad touted the VMware channel ecosystem as being the biggest reason for VCF 9 adoption.

“Partners are playing a key role in enabling VCF to happen because we couldn’t have scaled with the demand that is out there without the help of partners,” said Prasad.

“Our partners play a huge role in the adoption side of VCF. In fact, maybe 90 percent of the time, it’s a partner helping our customer, not our own resources,” he added.

11:11 Systems, for its part, is seeing so much VCF and cloud services success, the company is acquiring other VMware cloud partners at a rapid pace.

“Having a single, integrated platform that allows us to leverage all of our expertise—whether it be on the network side, the security side, the AI side, or the overall scale and management component—it’s just really exciting for us,” said Orsini.

This month, Broadcom reported capturing $19.3 billion in revenue during its fiscal 2026 first quarter. VMware sales, part of Broadcom’s Infrastructure Software Group, generated $6.8 billion in revenue during Q1 2026.

“We are at a point where, worldwide, we have hundreds and hundreds of partners who are well trained now because we have invested in training. And now they are helping our customers deploy the VCF private cloud,” Prasad said. “So the business is doing great.”