Broadcom has made significant changes to the VMware licensing model, which has major implications for organizations. The traditional perpetual licensing model has been replaced by a subscription model, which not only changes the cost structure but also requires a rethink of IT strategies to remain compliant and ensure operational continuity.

Core changes in VMware licensing

With the new licensing rules, Broadcom has completely stopped selling perpetual licenses. New licenses can now only be purchased via a subscription model, which gives customers access to regular updates and new features. However, this model can be more expensive in the long run than a one-time investment in perpetual licenses.

In addition, Broadcom is placing greater emphasis on license compliance, with more frequent audits to ensure customers are in compliance with license terms. Existing perpetual licenses will remain valid, but once support contracts expire, customers will lose access to software updates, security patches, and technical support. This can create operational risks, especially for businesses that rely on legacy systems.

New changes in VMware licensing

In addition to the changes mentioned above, there are three key new changes that organizations need to understand:

  • Minimum core licensing adjusted: The previous requirement of a minimum of 72 cores per order has been reversed for the EMEA region. Organisations can now order per piece again, with a minimum of 16 cores per CPU.
  • Stricter late renewal penalties: Subscriptions renewed after their expiration date will incur a 25% surcharge, increasing the cost of non-compliance.
  • Consequences of late renewal of subscriptions: If a subscription is not renewed on time, connectivity between vCenter and the virtual machines (VMs) will be lost. This can cause immediate operational disruption and requires immediate action to make the infrastructure accessible again.

What does this mean for your organization?

The financial and operational impact of these licensing changes is significant. Organizations must adjust their budgets to manage the recurring costs of the subscription model. IT teams must also closely monitor their infrastructure to minimize risk from missing updates or expired subscriptions. Companies without an active subscription can immediately experience system outages or reduced functionality.

How to act?

Organizations impacted by these licensing changes must act strategically. Start with a detailed audit of your current VMware licenses to understand which licenses need to be renewed and which systems may require an upgrade. Planning for a move to subscriptions requires close collaboration between IT, finance, and procurement teams to ensure a smooth transition.

Broadcom offers trade-in programs to help customers convert perpetual licenses to subscriptions. These programs can be financially attractive, depending van the conditions offered, but it is important to carefully evaluate the benefits before making a decision.

For businesses struggling with the cost of VMware subscriptions, 3rd party support offers a cost-effective alternative. Providers such as Rimini Street and Spinnaker Support continue to support older perpetual licenses and provide customized services to ensure operational continuity. We can connect you with these providers and negotiate optimal terms and rates on your behalf.

Alternatives to VMware

Given the higher costs and stricter terms of the new VMware licensing model, more and more organizations are considering alternatives such as:

  • Microsoft Hyper-V: A robust virtualization solution, integrated into Windows Server, ideal for organizations already using Microsoft technologies.
  • Citrix XenServer: Targeted at companies that make extensive use of Virtual Desktop Infrastructure (VDI) and require advanced virtualization features.
  • Proxmox VE: An open-source virtualization platform that is quickly gaining popularity due to its flexibility and lower costs. Supporting both KVM (Kernel-based Virtual Machine) and LXC containers, Proxmox is an attractive option for companies looking to cut costs without sacrificing functionality.

While these alternatives may be more financially attractive, one must consider the impact of switching:

  • Knowledge and training: IT teams need to be trained in the new technology.
  • Migration complexity: Moving to a different virtualization platform requires a detailed migration plan and can cause temporary disruptions.
  • Software Compatibility: Some applications may depend on specific VMware functionality that is not readily available in alternative platforms.

Frequently asked questions

1. What are the most important changes?
Broadcom has ended its perpetual licensing model and moved entirely to a subscription model, with stricter penalties for late renewals.

2. Can customers continue to use their perpetual licenses?
Yes, existing perpetual licenses will remain valid, but without an active support contract, updates, security patches, and technical support will expire.

3. Why is Broadcom making these changes?
Broadcom aims for predictable revenues and aims to increase VMware's revenue from $4,7 billion to $8,5 billion within three years.

4. What are alternatives to VMware's subscriptions?
In addition to third-party support from Rimini Street and Spinnaker Support, companies can switch to alternatives such as Microsoft Hyper-V, Citrix XenServer and Proxmox VE.

Closing note

VMware’s changes to its licensing model require a thoughtful and proactive approach. By conducting a licensing audit, planning strategically, and exploring alternatives such as Hyper-V, XenServer, or Proxmox VE, organizations can future-proof their IT strategies. Acting now is essential to control costs, minimize compliance risks, and ensure operational continuity.