For most organisations VMware used to be a quiet line in the budget. It was paid, it was renewed, and it rarely reached the board. Since Broadcom acquired VMware that has changed. The renewal is now one of the larger infrastructure decisions a CIO or finance director will make this year, and it carries a number big enough to need a proper answer rather than a rubber stamp.
This is a leadership view, not a technical one. The aim is to help you forecast the impact, decide what to set aside, and frame the choice for the people who will ask why the figure moved so much.
Why the number jumped
Three commercial changes sit behind almost every shocked renewal quote.
Perpetual licences have gone. You no longer own the software and pay a smaller fee for support. You subscribe, and when you stop paying you stop running. That alone changes the shape of the cost from a depreciating asset to a recurring commitment.
Licensing is now counted per physical core, with a minimum of sixteen cores charged for every processor even if the chip has fewer. Modern servers carry high core counts, so the unit you are billed on has grown even when your workload has not.
The bundles were repackaged. The components you used to buy in pieces are now grouped into larger subscriptions, which makes a like for like comparison with your old contract genuinely hard and tends to push you toward more than you need.
The result, widely reported by analysts and matched by what we see in the field, is renewal increases that commonly model anywhere from eighty percent to over four hundred percent. The spread is enormous, which is the first thing to understand. There is no single multiplier you can apply across the market. Your figure depends on your core counts, your current entitlement and how the bundle maps to what you actually use.
How to forecast the uplift
You cannot budget for a range that wide, so the first task is to narrow it to your estate.
Start with the real core count, processor by processor, not the rough number on a slide. Apply the sixteen core per processor minimum, because that is where a lot of the uplift quietly appears on estates running lower core chips. Then separate the capability you genuinely use from the capability the bundle includes. Most organisations are surprised by how much of the fuller stack they have never switched on.
If you want a fast first estimate before involving anyone, our VMware renewal cost calculator lets you plug in hosts and cores and see the shape of the number in your browser, with no sign up. It will not replace a proper audit, but it turns a frightening unknown into a figure you can start planning around. For the detail behind it, the renewal cost guide explains how the new pricing actually works and where the savings tend to hide.
What to set aside
For planning purposes, treat the VMware renewal as a material increase rather than a routine uplift. Until you have modelled your own number, assuming a significant rise is safer than assuming last year plus inflation, because a surprise in the other direction is far more painful at this scale.
Build the provision around three outcomes rather than one. The first is staying and renewing on better terms than the opening quote, which is almost always achievable with evidence. The second is staying but right sizing the bundle down to what you use, which can recover a large share of the increase. The third is beginning a migration, which carries its own project cost that lands over more than one budget cycle. You do not need to commit yet, but the board will want to know that each path has a rough number attached.
One more line item is easy to miss. Version nine introduces a compliance reporting obligation. Failing to file the required reports can degrade management functions and affect support, so it is an operational responsibility with a cost in time and attention, not just a licensing detail. Make sure someone owns it.
Framing the decision for the board
The conversation to avoid is the one where infrastructure asks finance to approve a number that tripled, with no context. That invites a no, or an approval given through gritted teeth that erodes trust for the next ask.
Frame it instead as a choice between justified options. Staying on VMware is no longer the default that needs no explanation. It is now a decision that should be actively justified, the same as any other path. For a large estate already using the broad stack, staying and negotiating well is often entirely rational. For a smaller, more distributed or lightly featured estate facing a sharp uplift, the case to look elsewhere is stronger. The board does not need the technical detail. It needs to see that each option has been costed honestly and that the recommendation follows from the numbers.
Our decision framework sets out the stay versus go question in the terms a leadership team actually weighs: estate size, feature use, renewal uplift, risk appetite and regulatory position. It is the page to read before you take a position to the board, because it keeps the argument on evidence rather than on the size of the increase.
It also helps to bring a real example into the room. In one engagement we held a client’s renewal uplift well under eighty percent against a projection that ran far higher, and secured a one year term that kept their options open rather than locking them in. The full case study is worth sharing with anyone who assumes the first quote is fixed. It rarely is.
The planning posture for 2026
Three principles will serve most organisations well this year.
Model your own number early, because the market range is useless for budgeting and the renewal clock is not on your side. Keep your options genuinely open, because leverage in a negotiation comes from being willing and able to walk, and that readiness has to be built before the renewal lands, not improvised at it. And treat the decision as a board level one, because at this scale it is, and presenting it that way protects both the budget and your credibility.
The Broadcom changes have made VMware a strategic question rather than an administrative one. That is uncomfortable, but it is also an opportunity. Organisations that approach the renewal with evidence and a clear set of costed options tend to come out of it in a stronger position than they went in. The ones that accept the first number do not.
If you are heading into a renewal and want an independent, vendor neutral view of where your costs really sit and what your options are, that is exactly the kind of decision we help leadership teams make.