HPE Unleashes New VM Essentials Incentives In VMware By Broadcom Virtualization Market-Share Battle

“This is a phenomenal opportunity for partners to take to their customers to avoid overpaying during migration,” said HPE Vice President of North America Channel and Partner Ecosystem Jeremiah Jenson.

HPE is providing additional incentives for partners to grab share from VMware by Broadcom in the virtualization market.

At HPE Partner Growth Summit in Las Vegas, the company unveiled a migration assistance program that allows new HPE VM Essentials customers to receive up to one year of complimentary licensing with the purchase of a three-year license to avoid double-paying for another hypervisor.

In addition, HPE is providing one year of HPE Zerto Advanced Resilience Edition for $1, enabling customers to migrate and protect up to 25 VMs at a time with near-online migration and disaster recovery capabilities, helping ensure a nondisruptive transition to HPE Virtual Machines.

“This is a phenomenal opportunity for partners to take to their customers to avoid overpaying during migration,” said HPE Vice President of North America Channel and Partner Ecosystem Jeremiah Jenson in an interview with CRN. “Customers are feeling quite a bit of pain in the change that some of the virtualization companies have put there, specifically Broadcom. They want to get off of that and leverage either new technology or technology that helps them accomplish their business goals—VM Essentials being that product. We have now a faster, more efficient and really a great program to help customers get there. We do that through partners.”

Ultimately, the migration assistance program is enabling partners to help customers reduce “financial risk,” avoiding double-paying during migrations, said Jenson. “Those VM Essentials customers receive quite a bit of value out of that.”

HPE is also providing three years of zero interest for HPE CloudOps Software, which includes HPE Morpheus VM Essentials and Zerto.

Since Broadcom’s $69 billion acquisition of VMware in November 2023, customers have been hit by dramatic price increases, in some cases by as much as two to four times when renewing licensing. That has opened the door for VM Essentials, which is priced per socket versus the VMware by Broadcom per-core model, to offer customers dramatic cost savings with VM Essentials.

CRN reached out to Broadcom, which declined to comment on the price difference between VM Essentials and VMware.

The cost savings in the switch-up from VMware is “real,” said Jenson, with the opportunity to save up to 90 percent compared with VMware by Broadcom. But the value of VM Essentials goes well beyond cost savings, he said.

“I think the bigger thing is our solution—the HPE Morpheus VM Essentials Software suite helps customers reduce cost, eliminate vendor lock-in and simplify hybrid IT, while setting the stage for future modernization,” he said.

HPE is also providing VM Essentials software licenses free of charge to 600 partners that gain the HPE Private Cloud with Virtualization Competency by the end of the year.

Jenson said the free VM Essentials licensing is enabling HPE partners to “leverage the power” of the HPE portfolio to invest in their own IT transformation.

Partners, in fact, are “feeling the same pain [as customers],” said Jenson. “There is opportunity for them in our investment in their IT to run their IT in a more efficient way by harnessing the power of the portfolio.”

Jenson said the VM Essentials for Partner IT program makes it “much easier” for partners to talk to their customers about migrating to the HPE VM Essentials product.

The additional incentives build on a no-holds-barred “channel- only” go-to-market model backed up by a 10.5 percent rebate for VM Essentials that was announced by HPE 16 months ago.

It also comes with increased momentum for VM Essentials in the market battle with VMware by Broadcom. HPE President and CEO Antonio Neri told analysts during the company’s most recent earnings call that VM Essentials’ customer count increased 43 percent in the first half, with a “notable rise” in net-new customer logos.

Since launching HPE Morpheus VM Essentials, HPE Executive Vice President of Hybrid Cloud business unit and CTO Fidelma Russo said in a press conference ahead of Discover that more than 2,000 customers have adopted enterprise virtualization with VM Essentials, providing up to a 90 percent cost reduction. Those 2,000 customers account for more than 1 million cores running VM Essentials virtualization.

Furthermore, Russo said that more than 75 ISVs now support the HPE Morpheus VM Essentials platform.

HPE partners said they expect the new migration assistance program and VM Essentials for Partner IT to fuel huge sales pipeline growth versus VMware by Broadcom.

Dan Molina, co-president and CTO of Nth Generation, San Diego, one of HPE’s top enterprise partners, said he expects the company’s VM Essentials sales pipeline to as much as quadruple and sales to grow at about that rate with HPE eliminating the “fear factor” that accompanies a move from VMware by Broadcom to VM Essentials.

“Our clients are facing big VMware renewal pricing challenges with their IT budgets not allowing them to invest in the renewal,” he said. “With VM Essentials we are providing a very strong alternative. These additional free licensing and migration capabilities are going to drastically lower the risk of moving to VM Essentials.”

Among the real-world cost-saving calculations provided by Nth Generation to customers are $5.25 million in cost savings for 22,300 total VMs with 7.11 petabytes of storage and $720,800 in cost savings for a customer with 43 hosts, 284 data stores and 987 terabytes of total capacity.

“We are still seeing anywhere from 2X to 4X price increases in certain cases for VMware renewals,” said Molina. “These are dramatic increases customers are facing as they look at multiyear agreements. The timing is great on this because the need for VMware cost reduction is not going away anytime soon. The VMware price increase continues to affect many organizations as they need additional IT investment to get into AI.”

Molina said VM Essentials has “matured” to the point where it can now support the vast majority of VMware workloads. “VM Essentials is now a real enterprise platform,” he said “You still have to do the proper sizing and architecture. But now we have a great VM Essentials play for just about any size organization.”

Molina said he expects VM Essentials to drag HPE storage and networking sales into the enterprise. “That is why this is such a smart move by HPE.”

Pat O’Dell, managing partner at HPE partner CPP Associates, Clinton, N.J., said he sees the new VM Essentials incentives driving home one of HPE’s biggest differentiators in the current IT landscape.

“HPE’s major compute, network and storage competitors don’t have an answer to the VMware problem,” said O’Dell, head of HPE’s North America Partner Advisory Council. “One of the largest challenges IT organizations are facing is the Broadcom premium. HPE has an answer to that. HPE is changing the game. It is very encouraging to see HPE making these VM Essentials investments.”

O’Dell said the additional incentives are going to make it easier to help clients make the move from VMware by Broadcom to VM Essentials.

“When you have a solution that is useful like VM Essentials as little as 10 or 20 cents on the dollar compared to VMware you are going to get the customer’s attention,” he said. “The bottom line is HPE is dramatically reducing the risk and the cost for customers to try VM Essentials. Customers are going to come out with a better outcome, whether it is VM Essentials or increased attention from Broadcom. This HPE program is allowing partners to bring real value to customers.”

HPE Senior Vice President and General Manager of Cloud Data Infrastructure Patrick Osborne said HPE is helping customers to “defray” the cost of licensing and migration.

“The cost savings are phenomenal,” he said. “That is an eye- opener by itself. It is also giving customers a way to rethink what they are doing. Some customers will continue to do virtualization. Some customers still have bare metal. Some want a path forward to container-based solutions and new AI applications.”

Ultimately, HPE is providing a path in what is often a one- or two- year journey to a “modern” infrastructure stack with agentic capabilities. “It’s a huge groundswell,” he said.