Let’s catch up on VMWare and Intel.
Amazon Web Services has launched a new service called Amazon Elastic VMware Service, allowing users to run Broadcom’s VMware Cloud Foundation in the cloud. This service aims to streamline the setup of private cloud environments, promising a complete setup in just a few hours without the need for changes to IP addresses or retraining staff. The VMware Cloud Foundation includes essential tools for virtualization and management.
According to the Verge, Intel’s recent launch of the Arrow Lake-based Core Ultra 9 200S-series processor has not met expectations, particularly in gaming performance. Despite initial claims that the new chips would not surpass AMD’s offerings, reviewers found them to underperform compared to AMD’s Ryzen 9800X3D and Intel’s previous Raptor Lake chips. During a recent interview, Intel’s VP Robert Hallock acknowledged the performance issues, clarifying that the problems are solely Intel’s responsibility and not due to external factors. Hallock indicated that a comprehensive update on the issues and a simple fix involving a BIOS flash and Windows update is expected by late November or early December.
The Biden administration plans to reduce Intel’s federal grant under the CHIPS Act from eight and a half billion dollars to less than eight billion, following delays in the company’s investments and broader business struggles. Intel, the largest recipient of CHIPS funding, has postponed the completion of its chip facilities in Ohio until the end of the decade instead of the originally planned 2025. The company’s recent quarterly loss was the largest in its 56-year history, and it is also cutting 15,000 jobs.
Why do we care?
As Broadcom focuses on enterprise clients and subscription pricing, smaller organizations and nonprofits feel the pinch, leading many to explore other virtualization options.
VMware’s pricing woes and Intel’s performance missteps highlight vulnerabilities in two of the IT industry’s stalwarts. While customer inertia and entrenched ecosystems may slow immediate shifts, both companies risk losing long-term market share to competitors better aligned with customer expectations. IT service providers, competitors, and cloud platforms have a unique opportunity to step in with value-driven solutions that address the dissatisfaction plaguing these markets.