When Broadcom completed its $69 billion acquisition of VMware in November 2023, most customers assumed the initial disruption would settle. Licensing models would stabilise. Partner programmes would find a new equilibrium. Pricing would normalise.
Two years in, it’s clear that didn’t happen. Industry analysts now describe the post-acquisition environment as a structural reset rather than a transitional phase, and the organizations still treating it as short-term disruption are finding that postponement itself has become a risk.
If your business runs on VMware and you’ve been waiting for things to go back to normal, it’s worth understanding what actually changed under Broadcom, who’s bearing the brunt of it, and what the hidden costs look like.
What Actually Changed
The headline changes are now well documented, but the combined effect is what matters.
The end of perpetual licensing. Broadcom eliminated perpetual VMware licences entirely. Every customer now commits to annual subscriptions, which fundamentally changes the IT budget structure. Organizations that previously stretched VMware renewals across three-to-five-year cycles now face predictable annual expenses that cannot be deferred without losing access to support, updates, and in some cases the ability to keep operating the environment.
Radical product consolidation. VMware previously offered around 168 individual products. Broadcom consolidated these into four bundles: VMware Cloud Foundation (VCF), VMware vSphere Foundation (VVF), VMware vSphere Standard (VVS), and VMware vSphere Essentials Plus (VVEP). Customers can no longer buy standalone components. If you need vSphere, you buy the bundle — including features you may never use.
Per-core licensing with high minimums. Pricing shifted from per-CPU to per-core, with minimum purchase requirements of 72 cores in many cases. For smaller environments and edge deployments, this creates a fixed minimum cost for capacity you don’t use. VCF is now priced at approximately $350 per core per year at list.
Partner programme contraction. In April 2025, Broadcom reduced the authorised VMware Cloud Service Provider (VCSP) network from over 4,500 globally to a much smaller number — 12 Pinnacle partners and around 300 Premier partners in the US. July 2025 brought further reductions and a rebrand to the VMware Advantage Partners programme. For MSPs and service providers who built businesses on VCPP membership, the rug was pulled.
Built-in annual price escalation. Subscription pricing includes annual escalators of typically 5 to 10 percent, so year-two costs exceed year-one for the same usage. Over a three-year cycle, the compounding effect is material.
Who Is Most Affected
Not every VMware customer experienced the changes the same way. Three groups are feeling it hardest.
SMBs and mid-market organizations. Smaller environments are hit disproportionately by the 72-core minimum. A business running a handful of physical hosts with modest core counts ends up paying for capacity it will never deploy. Industry reports document 150% increases for small customers, with organizations transitioning from perpetual licences to subscription facing increases above 1000% in some cases.
MSPs and cloud service providers. The VCSP partner cuts eliminated market access for thousands of service providers. For MSPs whose business models depended on reselling VMware-based cloud services, the options narrowed to three: find a path into the smaller Premier or Pinnacle tiers, rebuild on a new platform, or exit the market. Many chose to rebuild.
Mid-market organizations with mixed estates. Businesses running a combination of VMware workloads alongside public cloud footprints are finding the economics particularly uncomfortable. The bundle pricing forces them to pay for features they don’t need, while the loss of VMware’s traditional flexibility makes it harder to right-size infrastructure against actual workload requirements.
The Hidden Costs Most Teams Miss
The direct price increases get the attention. But the real operational impact comes from three less visible areas.
Support gaps from partner programme changes. If your existing VMware partner lost VCSP status, the support relationship may have quietly degraded. Escalation paths are slower. Senior technical resources are harder to access. Some organizations are only discovering these gaps during incidents, when response times matter most.
Planning uncertainty. Budget forecasting has become harder. Future licensing changes, bundle restructuring, and pricing adjustments are all plausible risks within the planning horizon. Finance teams that previously modelled VMware as a stable cost line now have to account for significant variance.
Opportunity cost of deferred decisions. Every quarter spent waiting for the situation to normalize is a quarter not spent building an alternative. Organizations that started evaluating alternatives in 2024 are now mid-migration. Organizations still waiting are starting the process against a shorter runway and a less flexible renewal position.
What Smart Organizations Are Doing
The businesses handling this well share a consistent pattern. They’ve stopped treating the VMware situation as a licensing problem and started treating it as a strategic infrastructure decision.
That means running a proper assessment of the actual workloads in the VMware estate, not the product catalogue. Some workloads genuinely benefit from what VMware provides. Others could run equally well or better on alternative platforms at a fraction of the cost. The 7 Rs framework that applies to cloud migration applies equally to virtualization platform decisions: rehost to an alternative platform, replatform to take advantage of cloud-native capabilities, refactor where the business case supports it, retain where VMware remains the right answer, retire what no longer earns its place.
It also means evaluating platforms that were built for the operating model organizations actually need today — open, flexible, and provider-friendly. Virtuozzo, based on OpenStack and designed specifically for service providers and CSPs, has become one of the more credible alternatives for organizations moving away from VMware without wanting to rebuild everything on hyperscale public cloud.
Get Clarity on Your VMware Exposure
As a managed hybrid cloud provider, Opti9 helps organizations assess their VMware estates, model the real cost impact of Broadcom’s changes, and evaluate the full range of alternatives — including Virtuozzo-powered environments that deliver flexibility without vendor lock-in.
Not sure how these changes impact you? Get in touch with Opti9 for a no-obligation assessment and explore how Virtuozzo can reduce cost and complexity.
