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VMware expecting subscription licensing shift

The firm might be largely a perpetual licensing business but the CEO is expecting that to change in the next couple of years

VMware's CEO has signaled that it is expecting its licensing approach to shift away from the perpetual model over the next few years.

Speaking at VMWorld 2017 and tackling the issue of how it's products can be sold and consumed by customers VMware's Pat Gelsinger said that it was fully aware that the way customers consumed software was changing.

"Today at VMware we are primarily a perpetual license business and about 9% of our business is as a service subscription business. That portion of our business is growing about three times faster than our overall business," he said.

He added that customers were going to be driving the change with many likely to be looking at subscription based licensing in the next few years.

"We expect that piece of our business to grow much more rapidly going forward and we expect in a year or two that some of the customers are going to tip over and say that’s how they want all of their products,” he said.

The vendor is pushing hard on the cloud front looking to get more channel specialists in that area on board and the need to provide flexible licensing is going to be part of that evolution.

"We expect it to become more important to have subscription and we will a broader set of those options and in the next couple of years I expect somebody to say that’s how they want to buy all of their products from VMware and we plan on having our offerings in place to be able to enable that,” said Gelsinger.

Another area where VMware is likely to change in the mid term is in its relationships with the open source community.

The vendor has been working on establishing more links with the open source world and developers that work in that space and is looking into giving more access to its APIs on some of its core products.

"We want to open up APIs within VSphere and we want to open them up to enable the open source community to build projects on top of these,” said Ray O’Farrell, executive vice president and CTO at VMware.

“We haven’t been great at that over the years but we are putting a lot of focus on that right now looking at how do we bring nice clean APIs and put them out there for the open source community to use,” he added.

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