Insight Enterprise CTO Juan Orlandini says Broadcom’s acquisition of VMware has ‘reinvigorated’ the software-defined infrastructure market with new offerings and made Nutanix ‘a much more important partner’ for the entire industry.
Juan Orlandini, CTO of North America for $8.2 billion solution provider Insight Enterprises, said VMware by Broadcom licensing changes and price increases have caused “chaos,” “pain” and “confusion” for customers even as VMware technology is stronger than it has ever been.
“VMware from a pure technology perspective has never been better,” said Orlandini in an interview with CRN discussing the shifting virtualization landscape and the dramatic price increases being faced by customers since Broadcom acquired VMware for $69 billion in 2023. “It’s amazing. It truly is. The technology itself is unbelievably solid. It’s whether or not the customers can take full advantage of the cost associated with that technology. That’s actually where the pain comes from. Most customers are not using all of the capabilities that are included in VCF [VMware Cloud Foundation 9.0]. If you’re not, then the price increases—which we’re seeing from 3X to even much higher multiples than that, 5X, and in rare instances higher than that—don’t make sense for customers to continue to pay because they’re just not getting the value out of it.”
Ultimately, Broadcom’s acquisition of VMware has “reinvigorated” the software-defined infrastructure market with new offerings and made Nutanix “a much more important partner” for the entire industry, said Orlandini.
“For 20 years VMware had such a stranglehold on this market,” he said. “There really wasn’t a whole bunch of innovation. There was a little bit from Nutanix, Red Hat and the open-source community. But nothing was gaining any traction because there was no market to be captured. VMware had a stranglehold on it. Now what we’re seeing is that there’s a plethora, an explosion, of choices that customers have. In the long term, that is a really good thing. It’s a healthier place to live because the industry as a whole will innovate and it will drive new value to customers. There are all these good things that are coming from this. But in the meantime while we’re going through this transition, while we’re settling into the new normal—whatever that’s going to look like—there is a lot of pain and a lot of confusion. That’s what we’re seeing: a lot of pain and a lot of confusion.”
Among the new offerings easing the VMware migration pain is the newly released Dell Technologies PowerStore storage support for Nutanix Cloud platform 7.6 deployed and managed by Dell Private Cloud. That new offering provides “huge value” for customers looking to migrate off VMware, said Orlandini.
“Without the flexibility of using PowerStore, you were adding pain on top of pain,” he said. “That’s actually the real benefit of this. It lowers that barrier of entry, simplifies the migration path, and gives flexibility for customers to make this transition a lot easier.”
Orlandini, who has been helping customers navigate the fast- changing technology landscape for four decades, said there has never been more disruption in the technology world with rising memory prices, hardware constraints, security threats, the chaos caused by VMware by Broadcom price increases, all of it amid the rush to implement AI solutions.
“You have the disruption of all these hardware constraints, the security disruption happening with AI, and then the pressure to put AI in place everywhere, and also the Broadcom transition customers are going through,” he said. “There has never been anything even remotely similar to all of these things happening at the same time. There just has never been anything like this. It is causing a lot of confusion, a lot of disruption. Customers are struggling with this. Luckily, we have access to all of the technologies and all of the OEMs. We work very closely with all of the major AI frontier labs, the hyperscalers, all the silicon manufacturers and OEMs. Our job is to be good stewards of our customers and help them through this.”
Orlandini said the biggest change at Insight over the last decade has been the company’s shift from being a provider of technology to a provider of solutions.
“When you’re a provider of solutions, you start with the business case and the financial reasons for satisfying the business case and work backwards to technology,” he said. “That’s been the transition that we’ve made. That been the most influential change for our clients as well.”
Orlandini said he is also proud of the fact that Insight itself is “client zero” for its AI solutions. In fact, Insight says 91 percent of its employees are using AI with more than 7,000 personal AI agents.
“Everything that we talk to our customers about, and everything we bring to our customers, we have done for ourselves first before we actually present it and deliver it to our customers,” he said. “So our informed opinion comes from a stance of having burnt our fingers. It’s not just theoretical knowledge.”
What is your reaction to the Broadcom-VMware licensing changes and the just-released Dell Technologies PowerStore storage support for Nutanix Cloud platform 7.6 deployed and managed by Dell Private Cloud?
They are both intimately tied together. There is the chaos that’s being caused by the VMware licensing transformation plus also the confusion as to how to make a transition if the customer chooses to make a transition—because not everybody’s choosing to make a transition.
One of the obstacles that was in the way was Nutanix’s prior commitment to the HCI [hyperconverged infrastructure] model, where the storage was tied to their platform. What they have done is opened up their platform to other storage providers, and that gives customers flexibility. That’s what customers want. That lowers the barrier of entry because most customers had already chosen to buy into a storage platform. If they’re a Dell shop, this makes the transition an easier decision to make or at least more feasible. That is a huge value. So the impact is going to be tremendous for customers that have been on the Dell storage platform layers for a while. This is good news for them. We’re excited to help them.
How important is that PowerStore support, given the platform has 20,000 customers globally?
It’s huge. Customers have been PowerStore customers for decades. Making a transition away from PowerStore to something else is not something that they would take very lightly. This is going to be huge for those customers because this opens up another path for them.
Here’s what makes it really compelling: The math to transition away from Broadcom if they choose to do so is not just the licensing costs of Broadcom, but all of the associated infrastructure and all of the associated retooling that they have to do of their processes, procedures, training, staff and all of that stuff.
Without the flexibility of using PowerStore, you were adding pain on top of pain. That’s actually the real benefit of this. It lowers that barrier of entry, simplifies the migration path, and gives flexibility for customers to make this transition a lot easier.
What has been the impact of Broadcom’s acquisition of VMware on customers and the market?
What this VMware transition has done is caused this whole software-defined infrastructure layer to be reinvigorated. For 20 years VMware had such a stranglehold on this market. There really wasn’t a whole bunch of innovation. There was a little bit from Nutanix, Red Hat and the open-source community. But nothing was gaining any traction because there was no market to be captured. VMware had a stranglehold on it. Now what we’re seeing is that there’s a plethora, an explosion, of choices that customers have.
In the long term, that’s a really good thing. It’s a healthier place to live because the industry as a whole will innovate, and it will drive new value to customers. There are all these good things that are coming from this. But in the meantime while we’re going through this transition, while we’re settling into the new normal—whatever that’s going to look like—there is a lot of pain and a lot of confusion. That’s what we’re seeing: a lot of pain and a lot of confusion.
The confusion comes from: Do I move or not move? That’s not a simple answer because it’s not always just about the licensing costs. There are the other things that are associated with it: How deeply embedded is this into my operations? How much value am I really extracting from the VMware licensing?
VMware from a pure technology perspective has never been better. It’s amazing. It truly is. The technology itself is unbelievably solid. It’s whether or not the customers can take full advantage of the cost associated with that technology. That’s actually where the pain comes from. Most customers are not using all of the capabilities that are included in VCF [VMware Cloud Foundation]. If you’re not, then the price increases—which we’re seeing from 3X to even much higher multiples than that—3X, 5X, and in rare instances higher than that—don’t make sense for customers to continue to pay because they’re just not getting the value out of it.
So then they’re left with the choices like what else can they use to transition to that so they will be able to justify the cost? There are choices. The question is what choice do you pick? We have services that will help customers first understand do they stay with VMware? For some, absolutely they should stay with VMware but optimize the utilization so they take full advantage of the value of VCF.
If it doesn’t make sense for a customer to stay with VMware, the question is which product should they transition to? At that point we have services that will evaluate their operations, their financials, their technology stack, the locations where they want to do this because they might want to choose to migrate from on-premises to a cloud-based model or a hybrid model for some of their workloads, or they might even choose to migrate completely to the cloud.
So we have services that are built around understanding that and then delivering and executing on that. Now some customers are also choosing not to retrain their staff because retraining them away from VMware to something else—that’s an expensive proposition—and they’re looking for a managed services provider that can come in and actually execute their environment on their behalf wherever they choose to land, whether it is in their own data centers, a colo or in the cloud.
They are looking for a managed services provider like Insight to come in and actually manage their environment. We become their IT operations because we have all the expertise around Nutanix and some of the other competitors that are out there. We become their operations team. That’s actually really good for the customer because they don’t need to focus their teams on that part of their business. We take care of it, and we move on. That makes the transition a lot easier. We have built a suite of services around that on behalf of our customers.
Are there any trends you are seeing there in the wake of the Broadcom-VMware situation?
Managed services is definitely up. I don’t know that I can share the magnitude of that, but it’s definitely up.
As a VMware partner, has VMware Cloud Foundation 9.0 become more of a Fortune 1000 product versus a midmarket offering? How is VMware positioning the product?
This has been clear from their messaging. They really want to focus on the global Fortune 1000, and VCF 9 is built to support that kind of customer base. It’s for a very large, very savvy, mature IT organization.
As you start stepping down from those very large organizations, IT staff tends to be made up of much more generalists than specialists, and for them, consuming all of the capabilities of VCF 9 becomes increasingly difficult because you need a Ph.D. in VCF in order to do that. Not everybody can afford people that have Ph.D.s in VCF. That’s actually why they don’t consume as much of it. They don’t get the value out of it, and then when the sticker price comes in, they’re like, ‘Oh my gosh, what am I doing?’
But like I said, the VMware technology is truly amazing. It does everything you want to do in order to build a private cloud in the true sense. But in order to build a private cloud, you also have to operate it like a private cloud, and not everybody has the capability or the desire to do that, to be quite honest. That’s where this tension is coming from.
What’s the difference between Dell Private Cloud and VMware Cloud Foundation 9.0?
That’s a good question. I hate to put it this way because it minimizes the value, but Dell Private Cloud is the easy button for smaller organizations. That is what it really is. It minimizes the value because the easy button does not imply it is of less value or not as capable. It is just built to a different operating model than VCF 9.0 is built for.
Why is Dell Private Cloud such an easy button compared with VCF 9.0?
VMware Cloud Foundation, if you really break it apart, is made up of a number of capabilities. It’s virtual networking, virtual storage, virtualization of the VMs, container management, the orchestration layers, the automation layers, all of these operating under a single umbrella. Not everybody needs all of those things. That’s where the complexity comes from. It’s called a single thing, but it’s actually many, many things underneath the covers.
What Nutanix and Dell have done with their combined offering is giving you many, but not all, of those capabilities. What they found is a sweet spot for what most companies are really truly consuming and giving them those and then giving them the flexibility to do that in a relatively easy way without having to burn out your staff into relearning a whole new thing. That’s why I call it an easy button.
Has Nutanix become a bigger and more strategic vendor in the wake of the VMware changes and partner disruption?
Nutanix has become a much more important partner for the entire industry. So it’s not just Insight.
If customers are looking to exit VMware, Nutanix is up there as one of the alternatives. Absolutely the entire industry is now looking at Nutanix as a much more important player.
How much traction is Insight getting with its managed services around private cloud in the wake of the VMware by Broadcom changes?
It’s actually more hybrid cloud. Most customers have been operating in a pseudo hybrid cloud model where they had some of their workloads running on one or many of the hyperscalers and some of their workloads running on the VMware platform. Now it’s coming more to light that they truly are a hybrid cloud estate where they have workloads that are running in the public cloud or in their private data centers, whether it’s colo or self-hosted. And don’t forget the edge. That’s part of the cloud.
Our offerings and services are built around the hybrid cloud model, and that’s what we call it: private hybrid cloud. It helps customers truly manage what they really are looking at because they are going to be living in this hybrid world for the foreseeable future, where workloads are scattered across different locations where the compute makes the most sense.
What impact are the memory price increases and hardware constraints having on buying decisions?
The guidance that we are getting from our OEM and silicon partners—the companies that make the chips as well as the storage silicon makers—is that these price increases are going to remain high for the foreseeable future, anywhere from 18 to 24 months.
So this is not going away anytime soon. Part of what we have to do is educate customers. This is the new reality for the foreseeable future. We have got to plan for this. Part of that planning is, ‘Let’s take a look at what you have and see if you’re utilizing it as well as you could be.’ There’s a lot of waste in in how we operate infrastructure. That’s just been the case forever. So part of what we offer are optimization services that can help make sure that customers are optimizing their infrastructure.
There is obviously gear that’s going end of life, end of service, and that needs to be refreshed. At that point we also have to help them through what do they do with that gear for the future. Do we move those to a colo that might have access [to hardware], do we move it to a cloud that has capacity or do we help them make sure they are rightsizing and making purchases appropriately?
With purchasing, we have a service offering where customers can buy equipment today at today’s prices in advance of price increases in the future. That service provides great flexibility. The other thing that we do is for customers that have the budget and the capacity to do this, we work with them to pre-buy equipment and then warehouse it and store it in our facilities and then as they need it we will ship it to them.
There’s a number of different things that we can do with them, but it starts with that education, making sure that they’re making the right financial decisions, that they’re forecasting properly, and that they’re consuming what they already own as well as they can.
Have you seen any trends in terms of what customers are doing in terms of pre-buying and storing products?
It’s a little bit all over the place. Some customers absolutely are pre-buying and they’re buying massive troves of storage and compute and networking. Some customers are delaying acquiring products just because they’re hoping that it’s going to be better or they are sweating their assets for longer than they should be.
One of the things that’s interesting is the cybersecurity reality that we’re living under now with Mythos and Project Glasswing is also causing some pressure for customers to actually change their behavior as well.
In the past it was OK to sweat a server past its end of life and just assume that, ‘Hey, I’m going to keep running that server until it dies and then I’ll just buy a new one.’ The problem is that when that server is no longer being supported by the OEM that server’s firmware is not being updated by the OEM and the firmware is a vector for attacks now.
So if you’re not maintaining your server’s firmware and the management planes and all that other stuff, that becomes a vector for attacks. So now there’s pressure for even end-of-life hardware to be upgraded that there has never been before. So there is now this pressure for customers who have to make some tough choices. We work with them to help navigate that.
Interestingly, the silicon makers are making incredibly more powerful servers. The core counts are going up; capacity and performance is better. So there are ways for us to help architect things that are going to reduce the number of servers so they don’t have to buy as much.
There are mechanisms and architectures that we’ve been working with for our customers to take advantage of all the innovation from Intel, AMD, Nvidia and Qualcomm on the device side of the house.
We haven’t even talked about the device side of the house. We have got to worry about this across the whole spectrum, and our customers are seeing the pressure across the entire spectrum of compute.
You’ve been at this for decades. How big is the disruption being caused by memory price increases and hardware constraints?
The last time I recall seeing something like this, even remotely similar to this, was back in the early ’90s. If you go back into your archives, there were actually memory price constraints back in the ’90s, but there weren’t storage [price increases] at the same time. There weren’t network constraints. So memory tended to be the bottleneck.
I’ve never seen all of this happening at the same time. It is hugely disruptive. You have the disruption of all these hardware constraints, the security disruption happening with AI, and then the pressure to put AI in place everywhere, and also the Broadcom transition customers are going through. There has never been anything even remotely similar to all of these happening at the same time. There just has never been anything like this. It is causing a lot of confusion, a lot of disruption. Customers are struggling with this. Luckily, we have access to all of the technologies and all of the OEMs. We work very closely with all of the major AI frontier labs, the hyperscalers, all the silicon manufacturers and OEMs. Our job is to be good stewards of our customers and help them through this.
What is Insight’s secret sauce or biggest competitive advantage to help customers through this disruption?
One is obviously our scale. Because of our scale we can look at this from a global viewpoint. So, for many of our customers that have global operations, having the single source of truth globally really helps because the narrative changes slightly as you navigate the world. It’s slightly different in EMEA [Europe, Middle East and Africa], slightly different in APAC [Asia-Pacific], slightly different here in North America,
The other differentiator is our technologists. We have an incredibly deep bench of technologists, literally thousands of people that live technology every day. That’s really our superpower. We have the relationships and the global reach with our OEMs and an incredibly deep bench of technologists that are there to help our clients navigate through all of this.
Is Dell a bigger part of your business now because of its supply chain superiority?
That’s absolutely a tailwind in our relationship with Dell. Their supply chain management and supply chain strength is absolutely an advantage. If I’m looking at some of their competitors and the quote is nine months out for gear and Dell is a lot shorter than that, it makes the decision easy for customers that have to make a decision. So absolutely, it is a tailwind for us. Having that massive scale is what really sets them apart from others that are in their peer group.
As a technologist who is agnostic, what do you see in the market going forward with all the disruption and pain with AI, Broadcom-VMware, memory price increases?
It’s never been worse. I haven’t seen it like this ever before. It is chaos. It is absolute chaos.
You said something that is one of my pet peeves—calling people ‘agnostic.’ That is actually not what our customers are asking for. The customers do not want agnostic. That implies that I don’t have an opinion. I very much deeply have an opinion. That is what customers are looking for from Insight. They want us to come to them with an opinion.
If they weren’t looking for an opinion, they could just go to Amazon and buy it. They want an opinion. We have an informed opinion. That is what customers are looking for. That informed opinion guides them through this chaos.
My biggest advice is to spend some time with somebody that has an informed opinion. Otherwise you’re just a showroom for everything you can buy. Have someone that can be your adviser to navigate these waters.
You need someone like Insight that has scale, the depth of technologists, the breadth of relationships, the financial backing to support our offerings. That is a big differentiator in the market, and that’s what customers should be looking for.
What’s been the biggest change you have seen in terms of Insight’s capabilities over the last decade?
It has really been moving from being a provider of technology to a provider of solutions. I mean that in the true sense of the word. When you’re providing technology, you start with the technology and then you back into an outcome.
When you’re a provider of solutions, you start with the business case and the financial reasons for satisfying the business case and work backwards to technology. That’s been the transition that we’ve made. That been the most influential change for our clients as well.
What are you particularly proud of in terms of Insight’s technology prowess?
The transition to being a solution provider is what we’re most proud of. We pride ourselves on being client zero for our AI offerings and the things that we do for AI. So everything that we talk to our customers about, and everything we bring to our customers, we have done for ourselves first before we actually present it and deliver it to our customers. So our informed opinion comes from a stance of having burnt our fingers. It’s not just theoretical knowledge. That’s something that we’re super proud of. It really starts with the business outcome. We are client zero and we act on our clients’ behalf.
