TO:Andrew P. Powers, City Manager
FROM:Jaime Boscarino, Finance Director
DATE:June 10, 2025
SUBJECT: VMWare Licensing Renewal
RECOMMENDATION:
1. Waive formal Request for Proposals process and approve purchase of VMWare license renewals from CompuWave, Inc. (Ventura, CA) in the amount of $76,800 for a renewal term of one year from June 2, 2025, to June 1, 2026.
2. Authorize expenditure in an amount not to exceed $76,800 in FY 2024-25 from A/C #001-3410-612-3122 (General Fund, Computer Software License) to pay for licenses.
3. Find that this action is not a project as defined under the California Environmental Quality Act.
LEVINE ACT ITEM: Yes
FINANCIAL IMPACT:
No Additional Funding Requested. The cost of $76,800 is included in the Adopted FY 2024-25 General Fund Budget.
BACKGROUND:
The Finance Department’s Information Technology Division is responsible for the licensing of the City’s computer software and maintaining software maintenance contracts for the City’s major applications. The VMWare operating system software provides the virtualization platform for the City’s 90+ servers that support applications, authentication and access, and desktop automation across the various departments and physical locations. The City has employed this solution for over 15 years.
The acquisition of VMWare by Broadcom, Inc. in 2023 resulted in several substantial price increases for this software. The cost increases were unanticipated and the City received little notification. These increases have adversely affected customers in the public and private sectors who have little
VMWare Licensing Renewal
June 10, 2025
recourse due to the disruptive nature of replacing the underlying server infrastructure for the entire enterprise and on short notice. Broadcom has also moved from a perpetual license model to requiring subscription-based licenses, which have also resulted in price increases.
DISCUSSION/ANALYSIS:
As the current VMWare license term was nearing its end, City staff requested quotes for the VMWare licenses from various VMWare resellers through an informal request for quotes process as outlined in Thousand Oaks Municipal Code (TOMC) Section 3-10.201b, because the purchase was anticipated to be under $75,000 based on historical pricing. During this process, Broadcom informed staff that they would only sell a higher-tiered product offering, the VMWare vSphere Enterprise Plus license, instead of the previously-purchased VMWare vSphere Standard license. The VMWare vSphere Enterprise Plus license is significantly more expensive than the VMWare vSphere Standard license, causing the price quotes to exceed the $75,000 threshold for a formal Request for Proposals (RFP) process as mentioned in TOMC Section 3-10.201c.
The quotes received are as follows:
Proposer Quote
1. CompuWave, Inc., Ventura, CA $76,800
2. Evodc LLC (VPLS by Evocative), Pasadena, CA $77,307
3. Zones LLC, Dallas, TX $78,155
4. Millenium Communications Group, Inc. $78,887
CompuWave, Inc. provided the lowest quote for the 12-month period (Attachment #1).
Staff also attempted to utilize a cooperative agreement through the National Association of State Procurement Officials (NASPO) Valuepoint that was competitively solicited to purchase the VMWare licenses. However, Broadcom would not honor the pricing on the cooperative contract.
The current VMWare licenses were set to expire on May 30, 2025, but the City has been granted a short extension. This purchase needs to be completed in a timely fashion to avoid expensive penalties (20 percent) on the subscription purchase. Due to the time restraints to renew the licenses, staff is requesting a waiver of process as allowed in TOMC Section 3-10.501 to utilize the informal request for quotes process instead of the formal RFP process to purchase the VMWare licenses from CompuWave, Inc.
VMWare Licensing Renewal
June 10, 2025
VMWare is currently the predominant software in the virtualization space, it has been the leader in the industry since the early 2000s, and has a significant installed base. Currently, it allows the City to operate 100+ Windows based servers on 11 physical servers in all five City locations, supplying redundancy if there is a hardware issue. Until it was acquired by Broadcom, the software was the most cost-effective solution with excellent reliability and value. Broadcom maintains tight controls on pricing and efforts to reduce costs have not been successful. Many cities and businesses across the world are having similar experiences with these price increases. At this time staff’s only option is to replace it expeditiously as most of the City’s systems rely on the software and to transition to a different software platform would potentially take one year. IT is currently evaluating alternatives and working to find a replacement solution.
LEVINE ACT (California Government Code § 84308):
This item is subject to the Levine Act. City Councilmembers who have received a campaign contribution of more than $500 (aggregated) within the preceding 12 months from a party or their agent/representative, or a financially-interested participant involved in this proceeding may do either of the following: (1) disclose the contribution on the record and recuse themselves from this proceeding; or if applicable (2) return the portion of the contribution that exceeds $500 within 30 days from the time the official knew or should have known about the contribution, and participate in the proceeding.
All parties and their agents/representatives must disclose on the record of this proceeding any aggregated contribution of more than $500 made to any Councilmember within the preceding 12 months. Councilmembers are prohibited from accepting, soliciting, or directing a campaign contribution of more than $500 (aggregated) from a party, their agent/representative, or a financially-interested participant during a proceeding and for 12 months following the date a final decision is made. In addition, a party, their agent/representative, or a financially- interested participant is prohibited from contributing more than $500 (aggregated) to a Councilmember during a proceeding and for 12 months following the date a final decision is made.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goal:
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
PREPARED BY: Gerard Fontes, IT Supervisor
Attachments:
Attachment #1 – CompuWave, Inc. Quote
FIN:190-10\ch\H:\COMMON\Council\2025\InformationTechnology\061025 VMWare Licensing Renewal StaffReport.docx