Uncle Sam's VMware 'bargain' doesn't include the actual hypervisor
GSA trumpets 64% discounts on Broadcom's VMware portfolio, core vSphere platform mysteriously absent from agreement
The US General Services Administration is flogging discounts of up to 64 percent under a OneGov Agreement covering Broadcom's VMware portfolio – though the actual hypervisor that made VMware famous isn't included.
The framework covers VMware Tanzu Platform, Tanzu Data Intelligence, Avi Load Balancer, vDefend, and the Tanzu AI Starter Kit. Notably absent: VMware vSphere Foundation, the virtualization platform most agencies actually use.
"This agreement represents another major milestone under the OneGov initiative and advances President Trump's call to accelerate AI adoption across government," said Josh Gruenbaum, Federal Acquisition Service Commissioner.
Broadcom framed the deal as helping agencies extract more value from existing investments in its private cloud platform while "achieving zero trust through multi-layer defense-in-depth."
Those existing investments are considerable. The US Army and other agencies signed a reportedly $477 million blanket purchase agreement for VMware licenses in 2024, while the Navy inked a $173 million deal. Last year, the Defense Information Systems Agency signed a contract pegged at nearly $1 billion, delivered via Carahsoft.
The discounts secured by the GSA expire in May 2027, giving Federal tech teams limited time to decide whether to hitch their container, security, or AI strategies to Broadcom's wagon.
That might not be a decision to rush.
Broadcom's acquisition of VMware continues generating some customer fallout, with license and product changes prompting customers large and small to reconsider their commitment to the platform.
These include UK supermarket giant Tesco, which sued Broadcom and one of Europe's largest resellers Computacenter "for not honoring a contract that gave the supermarket giant the option to acquire software at pre-determined prices and ongoing software support services."
Computacenter in turn filed a claim against Broadcom and Dell, arguing that the companies – software supplier and distributor respectively – had not fulfilled their contractual obligations to the reseller.
Other upset customers included AT&T, Siemens, and the Dutch Government.
None of that has deflected Broadcom from its strategy of disruption and focusing on the biggest customers. Just last month it yanked its VMware vSphere Foundation bundle in parts of EMEA, a decision that could particularly hurt smaller customers. ®