As businesses continue to face mounting pressure to optimize IT costs while boosting operational efficiency, finding the right infrastructure solution is critical. VMware Cloud Foundation (VCF) has emerged as a powerful platform for organizations looking to address these challenges.

VMblog spoke with Drew Nielsen, Head of Cloud Economics in the VCF Division at Broadcom, to discuss how VCF can deliver tangible cost savings while supporting strategic business outcomes such as IT modernization, generative AI adoption and improved cyber resilience.

VMblog:  How does VMware Cloud Foundation drive down Total Cost of Ownership (TCO), and what savings can companies expect?

Drew Nielsen:  VMware Cloud Foundation delivers cost savings across three key areas: infrastructure, facilities, and labor. At Broadcom, we analyze more than 600 TCO models each quarter, and the results speak for themselves. On average, businesses can expect the following economic benefits:

• 55% savings on infrastructure costs
• 31% savings on facility costs
• 42% savings on labor productivity

By consolidating multiple vendors and systems into a single platform, businesses reduce redundancy and streamline their operations, leading to significant cost reductions across the board.

VMblog:  What are the core benefits of adopting the entire VMware Cloud Foundation stack instead of just part of the platform?

Nielsen:  When companies fully embrace the VMware Cloud Foundation stack, they unlock the full potential of the platform, including advanced services like AI/ML tooling, disaster recovery, and integrated security features. The real value comes from reducing complexity. When you have separate vendors for compute, storage, and networking, you introduce inefficiencies. VMware Cloud Foundation allows businesses to consolidate these systems, streamline operations, and realize greater cost savings while ensuring full control over their IT infrastructure.

VMblog:  How does VMware Cloud Foundation compare in terms of costs when looking at traditional data centers, public cloud, and VCF?

Nielsen:  VMware Cloud Foundation offers a more efficient way to manage IT infrastructure, reducing unnecessary costs and giving businesses more control over their workloads.  The cost comparison is telling:

• Traditional Data Center: The "cost of doing nothing" is approximately $5.9 million, including infrastructure, software, facilities, labor, and support.
• Public Cloud: Costs increase to around $7.3 million, primarily due to higher storage costs and the need to replicate on-prem services like CloudWatch and VPN gateways.
• VMware Cloud Foundation: The cost with VCF drops to about $3.7 million, offering substantial savings over both traditional data centers and public cloud solutions.

VMblog:  Migration to the cloud is often seen as complex and expensive. How does VMware Cloud Foundation reduce these costs?

Nielsen:  Migration is one of the biggest pain points for companies moving to the cloud. The cost of migrating can be as high as $1,000 per VM, and complex workloads-such as CRM systems or large databases-can be even more costly and risky to move. With VMware Cloud Foundation, businesses can seamlessly move workloads between on-prem and public cloud environments, reducing the complexity and cost of migration. This flexibility helps companies avoid the heavy lifting typically associated with cloud adoption.

VMblog:  How does VMware Cloud Foundation help organizations avoid escalating cloud costs?

Nielsen:  One of the major advantages of VMware Cloud Foundation is its ability to help businesses avoid the skyrocketing costs of public cloud services. For example, we recently worked with a healthcare customer whose IT budget was split almost evenly between their private cloud and public cloud workloads. Despite only 15% of their workloads being in the public cloud, 47% of their budget was spent on those workloads. By analyzing the data, we found they were paying four times more for those workloads in the public cloud compared to VCF. Over the next decade, they could avoid up to $1.6 billion in cloud infrastructure costs by shifting more workloads to VCF.

VMblog:  Can you share an example of a company that has realized significant savings with VMware Cloud Foundation?

Nielsen:  Absolutely. We worked with a large healthcare provider who was running 85% of their workloads on VMware Cloud Foundation and 15% in the public cloud. Despite the small proportion in the public cloud, they were spending nearly half of their IT budget on those workloads. After running an analysis, we found they were paying about four times more for public cloud services than they would with VMware Cloud Foundation. Moving additional workloads to VCF would save them hundreds of millions of dollars, and over 10 years, they could potentially save as much as $1.6 billion in cloud infrastructure costs.

VMblog:  For organizations that are hesitant to switch to VMware Cloud Foundation's full-stack solution, what would you say to ease their concerns?

Nielsen:  I completely understand the hesitation-moving to a new platform can seem daunting. However, the value of VMware Cloud Foundation lies in its ability to reduce complexity and increase flexibility. Many of our customers were managing multiple systems from different vendors, which introduced inefficiencies. Once they switched to VMware Cloud Foundation, they realized how much easier it was to manage a single platform and how much they could save in the process. For organizations focused on modernizing their IT infrastructure, VMware Cloud Foundation provides a clear path toward greater efficiency, cost savings, and future-proofing.

VMblog:  How can organizations get started with VMware Cloud Foundation and evaluate its potential value for their business?

Nielsen:  Getting started with VMware Cloud Foundation is easy. Any VMware sales rep can help a customer initiate a TCO and ROI analysis using our VMware Value Modeler tool. All it takes is a one-hour session with the IT and finance teams to gather the necessary data. From there, we provide a transparent, detailed TCO and ROI model that shows exactly how VMware Cloud Foundation will impact their bottom line. Our goal is to give businesses a clear, honest picture of the costs and benefits so they can make informed decisions about their IT strategy.

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