Look at Zscaler and Crowdstrike for examples - both follow this strategy.
As a business, you optimize for Net Revenue after Cost of Operation. It's always good to drop customers if it costs more to support them than the revenue you get.
I agree
> effectively unlimited hc and budget
I disagree.
A company like Google or FB can build in-house tooling simply because they have entire dedicated teams of engineers to manage their environments in house to meet niche needs. A F10 like ExxonMobil or UnitedHealth cannot justify a FB size engineering footprint when their margins are much lower.
> find a competitive alternative platform to ESX
Yep. The issue is ESX is actually pretty good at getting the job done. Your alternatives from a supportability standpoint are HyperV from Microsoft (which will probably eat up the smaller ESX customers), Citrix Hypervisor (owned and operated by ex-Broadcom leadership), and IBM RedHat's KVM (which requires you to work with IBM for Professional Services).
At the end of the day, you as a CTO or Platform team don't want to be fully OSS. Not because OSS is crap software (anything but), but because a pure OSS play doesn't provide you a dedicated support engineering team if shit hits the fan nor SLAs and monetary compensation if shit breaks.
This is why most OSS core companies max out revenue via a Professional Services play. RedHat is a notable example of this.
If you are running vpshere and move to proxmox, you are in for major differences.
Billions of have been wasted trying to get rid of the vTax. It has been rarely successful.
The open source will be eventually "good enough" like Postgres is "good enough" over Oracle, but this doesn't stop Oracle from taking in $50 billion every year.
A tech company can justify 30-50% R&D spend, which is where IT/Software falls.
As a non-tech company like ExxonMobil or UnitedHealth this is a much harder ask while being a distraction from other work your IT/SWE team needs to get done.
Time spend managing your custom OSS virtualization stack is time taken away from managing compliance, security posture, networking, data management, etc.
Why re-invent the wheel when it's cheaper to buy?
Don't forget Oracle: https://www.oracle.com/virtualization/
Tbf they target renewals more so than new accounts.
They used to be pretty good at virtualization back in the day
OpenStack is nasty to get up and running (I've ranted a bit about my experiences here on HN) and it's a PITA to get consulting, much less actual staff you can hire, for it... but once it's running, it's extremely impressive. Literal entire large research labs like CERN are no issue for it (CERN runs >300k cores AFAIK).
If you got the compute demand to justify the headcount and initial effort, absolutely go for OpenStack.
Earlier in my career I worked my way up from Linux sysadmin to Enterprise architect and designed a private vSphere/vCAC private cloud (100K+ ESXi hosts, 12PB SAN, US east/west, Canada, EU) for a F15 company and the level of incompetence I saw in tech leadership from the CTO office down was staggering.
Most CTO leadership in the F1000 has determined long ago that kingdom building and protecting headcount is their top priority, so they don't want things to be too efficient. They have to protect their 300 Windows admin HC and 100 Linux admin HC at all costs, so if you give their customers (the line of business unit managers and developers) an API that lets them provision a virtual server in minutes and might automate away the job of 80% of those Windows admins who were doing manual builds, they will slow it down to the point that it is just as slow as the old 6 month long manual provisioning process.
I watched this play out first hand. On my small team we designed a private cloud that could give you a Linux/Windows server in ~20 minutes with as much storage as you wanted, and it was so effective at stealing internal customers that the VPs who managed the server build/run teams made sure to break it apart into their separate storage, compute, and database silos so that the provisioning process got slow again. It still takes them 6 months and a project manager to provision a single server now.
These dinosaurs don't want change. They want to kingdom build and make sure they have hundreds of dead weight server admins so that when they get forced to cut due to budget reductions they won't get cut too deep. They could care less about the bottom line, and the CEO and executive leadership don't know they're being gaslit by their CTO office on down about the "dangers of public cloud."
Not really. Most of those companies have lax Cloud Cost Management hygiene and/or the Cloud Platform team is separate from the Infra/Servers team.
If you are F250 you can probably negotiate a nice discount if you are able to fully migrate to a single cloud, but most companies don't want to keep all their eggs in a single basket. This means larger organizations cannot avail competitive discounts on public cloud.
By bundling Private Cloud (VMWare ESXi), Network Security (VMWare NSX), APM (CA Wiley), Endpoint Protection (Symantec Enterprise), and Data Security (Symantec Enterprise) I can purchase 5 critical pieces of Enterprise Infrastructure using a single PO. This is critical at large organizations as any PO above $30k almost always requires CFO or Comptroller approval, and a single PO to Broadcom satisfies your Infra, DevOps, and Security needs (which are all cost centers if you aren't a tech company).
Btw, Broadcom themselves is almost entirely on GCP [0]. Almost all their infra and products are served using a GCP stack on the backend.
[0] - https://www.broadcom.com/blog/broadcoms-transformation-journ...
Edit: Also, I didn't realize I'm replying to an actual legend in the systems/networking space. I read some of your papers when I was an undergrad and later as an early career SWE.
Ended up doing a small on-prem solution. VMWare for 6 CPUs x 32 cores = 192 cores runs about $3K/year for the software side which is a good deal to get started. That leaves about $240K/year or so to cover other costs. Not a slam dunk necessarily, but the on-prem store with vmware is not unreasonable.
If it's greenfield I'd agree. There's a reason why most companies founded after 2008 have a heavy public cloud presence.
The issue is if you are a large brownfield deployment (like most F1000s), a "Cloud Transformation" takes forever and is costly.
It can be done - for example Capital One and Broadcom - but it requires executive buy-in to respect engineering leadership and build a solid DevOps/Platform team.
I know if I was to found my own company tomorrow, I'd be entire cloud first because of velocity and ease of scalability, but you can't expect a company like UnitedHealth Group to transition to an entirely cloud first environment within a 2-3 year timeframe as even a minor outage represents millions of dollars lost a minute and litigation.
Over the next 10-15 years we'll see a large number of non-tech first companies becoming multi-cloud, but in 2023, it's still work in progress.