If your VMware renewal has just landed at a multiple of what you paid last time, you are not alone and you have not done anything wrong. Broadcom rebuilt VMware’s licensing from the ground up after completing the acquisition in November 2023, and the new model is designed to move customers onto bigger bundles at higher prices, on subscription, with fewer places to buy. Understanding exactly what changed is the first step to doing something about it. This is the map.
What actually changed
Perpetual licences are gone. Since December 2023 VMware has been subscription only. If you hold perpetual licences you can keep running them, but you cannot buy more, and support and updates end with your existing contract. Every renewal is now a subscription decision.
Pricing moved to the core. Subscriptions are priced per core, not per processor or per host. Two rules do the damage. Every CPU is billed for a minimum of 16 cores, so a host with eight core processors is still charged as if it had sixteen. And there is a minimum order of 72 cores, so a small environment pays for at least 72 whatever it runs. The dense hosts organisations bought to consolidate now cost more to license than the sprawl they replaced. Our guide to VMware renewal costs after Broadcom walks through the arithmetic, and the free VMware licensing cost calculator applies it to your own estate in a minute.
The catalogue collapsed into bundles. Dozens of SKUs became a handful. vSphere Enterprise Plus, the tier most estates ran, was retired, and the choice is now vSphere Standard, vSphere Foundation (VVF) or VMware Cloud Foundation (VCF). Standard is capped at 512 cores. VVF has been withdrawn in some regions. So a larger estate is frequently steered to VCF, the full software defined data centre, whether or not it needs the networking, storage and management the bundle includes. Which tier you can actually license, and which one fits, is the whole subject of our VCF or VVF guide.
The channel shrank. The partner programme was cut back hard, so fewer resellers can quote you and there is less competition for your order.
Late renewals cost more. Broadcom has been widely reported to apply an uplift, around 20 percent, to renewals that are not signed before the existing term ends. Letting the date slip is no longer neutral.
Put together, reported increases of several hundred percent are not unusual, and they arrive with the clock already running.
Six things to do about it
1. Audit the estate before you look at the quote. The quote is built on the vendor’s view of your environment. Yours should be built on a verified count of hosts, processors, cores and entitlement, separated cleanly from what you are being billed for. Nearly every renewal we look at is licensing capacity that is not in use, and you cannot negotiate what you have not measured.
2. Right size it. Cluster consolidation, decommissioning hosts that exist only from habit, and revisiting core counts against the 16 core minimum all move the billable number before anyone talks price. This is the step most organisations skip, and it is the one that costs nothing.
3. Choose the bundle deliberately. If you are being pushed to VCF, map its components against what you will actually deploy. Paying VCF prices for networking and storage capability you will never switch on is the single most common form of waste under the new model. Where the cheaper tiers are genuinely available to you, test them properly.
4. Negotiate, because the first number is not the floor. Broadcom does negotiate, particularly with larger estates and with customers who can credibly walk away. What moves the number is evidence: the audited baseline, a model of the renewal under several scenarios, and a realistic alternative. We spent years on the vendor side building these quotes, so we know where the give is and which claims a vendor will stand behind. How to do it well is in staying on VMware after Broadcom, done well.
5. Weigh the alternatives honestly, even if you expect to stay. Nutanix, Azure Local and Hyper-V, open source platforms such as Proxmox and KVM, public cloud, and for some estates a move towards containers. Each is credible for the right organisation and wrong for others, and the assessment matters even when the answer is stay, because it is what gives you leverage. Third party support for perpetual licences you still hold can buy time, but it is a bridge, not a destination. We compare the options on a consistent basis in VMware alternatives compared, and set out how to decide in should you leave VMware.
6. Start early. This is the one that decides everything. Leverage disappears as the renewal date approaches, and the late uplift means the deadline now has a price attached. Six to twelve months out you can audit, model, negotiate from strength and, if it comes to it, plan an exit calmly. Three months out you are choosing between a bad number and a rushed migration. Leverage requires runway explains why timing does most of the work.
A word on compliance
Broadcom has signalled it will step up licence compliance audits. Keep accurate records of what you hold and what you run, especially if you are relying on perpetual licences or a partial renewal. An audit you are ready for is an inconvenience. One you are not is a bill.
Where this leaves you
VMware is still a strong platform, and for most organisations the right answer is still to stay, on terms negotiated properly rather than accepted. The maze is navigable. It just cannot be navigated in the last month before the renewal. If yours is inside the next year, the most valuable thing you can do is start now: our VMware strategy and renewal support begins with an honest audit of where you stand, and we do not resell VMware, so the only thing we have to gain is the saving.
For the bigger picture on why every VMware renewal is now a genuine decision rather than a formality, read The Great Infrastructure Reset.