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Broadcom has lost another key customer after UK cloud operator Beeks Group decided to adopt the open source OpenNebula stack.

Beeks provides virtual private servers and bare metal boxes to financial service providers, and emphasizes the low latency of both and the trading network it operates.

The company told The Register that it operates in more than 20 data centers with more than 20,000 virtual machines and more than 3,000 bare metal servers. Most of the VMs now run under OpenNebula - an open source project that provides hybrid cloud capabilities on multiple hypervisors, but prefers KVM.

Matthew Cretney, head of production management at Beeks, told us the company ditched VMware for several reasons. A bill from Broadcom that was ten times what the company was previously paying for software licenses was one of them. Beeks' customers also told the company that VMware was no longer considered essential infrastructure.

The technical team also warned management that the quality of VMware's support services and innovation was declining.

One symptom of the perceived innovation dilemma was that Beeks felt the VMware suite had a lot of management overhead - meaning too many of its server farms were dedicated to managing VMs, not running VMs for customers.

The very nature of the VMware stack as a platform for managing VMs didn't help. Some of Beeks' customers preferred bare metal because even the isolation provided by virtualization didn't meet their needs for security and low latency. vSphere wasn't built to manage VMs and bare metal servers, and Beeks wanted one tool to do both.

A challenging transition

The migration wasn't easy. Beeks was running proprietary software tied to VMware APIs and had to be rebuilt to interact with OpenNebula.

The open source project's tools for collecting the metrics that Beeks and its customers value - about CPU performance and utilization of CPU, disk, memory, and network resources - were not robust. That was a problem because an overloaded CPU or disk could be the difference between a pleasant, quick transaction and a missed opportunity. Because OpenNebula was open source, Beeks saw fit to develop tools to collect that information, and it did so with satisfying success.

The move to OpenNebula meant a 200 percent improvement in VM efficiency - which meant more VMs per server and lower costs for Beeks and its customers.

Beeks still offers VMware services for customers who need them, but the majority of its VM estate is now on OpenNebula.

Broadcom positions VMware's Cloud Foundation (VCF) stack as ideal for organizations with large, complex IT estates. The company argues that despite the VCF's hefty price tag, those who implement the full suite of compute, storage and network virtualization components will quickly see a return on investment, proving the suite is exceptional value.

Beeks's offering is a bit unusual, so it may be an exception to the VCF. Broadcom could therefore argue that losing much of this particular customer's business is not much of a blow.

However, Broadcom's decision follows the loss of insurance giant Geico, fintech Computershare, Boyd Gaming and John Deere to the UK cloud company, with post-acquisition licensing terms being a common theme behind migration decisions.

US telecom giant AT&T has also threatened to exit VMware, claiming the move will pay off soon – but that may just be a negotiating tactic as it settles a dispute over a support services contract.

The Beeks Group's experience with significant cost savings is therefore another example to learn from for those considering what to do after their current VMware deal expires, facing the decision of whether to buy into Broadcom's virtual vision.

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