From Perpetual to Subscription-Only

The biggest change: perpetual VMware licenses are gone.

Broadcom has ended sales of perpetual licenses and Support and Subscription (SnS) renewals. Instead, VMware products are now sold only through subscription-based licensing.

What this means for enterprises:

• No more buy once, use forever: Customers must move to ongoing subscriptions, which reset cost baselines upwards.
• Upfront capital spend is out, OpEx is in: This shift affects budgeting models and financial planning.
• Forced transitions: Even customers with active perpetual licenses may find themselves pressured to migrate to subscription when they expand or renew support.

This mirrors a wider industry trend (think Microsoft, Adobe, Oracle), but the speed and scale of VMware’s transition under Broadcom has left many customers scrambling.

VMware Cloud Foundation (VCF): The New Centerpiece

Broadcom is consolidating VMware products into VMware Cloud Foundation (VCF), a bundled platform combining vSphere, vSAN, NSX, and Aria Cloud Management.

The intent

• Simplify VMware’s product catalogue
• Push customers toward a full stack VMware approach
• Increase average deal sizes by bundling core infrastructure components together

The impact

• Cost escalation: Many customers that previously licensed vSphere or vSAN individually are now required to buy the entire VCF suite. This means they are paying for functionality they may not need.
• Reduced flexibility: Enterprises can no longer mix-and-match VMware components as easily. The bundled approach forces broader adoption.
• Lock-in risks: With so many critical infrastructure layers bundled, moving away from VMware later becomes even harder.

For customers who only needed virtualization (vSphere) or storage virtualization (vSAN), the new VCF model can feel like overkill and overpriced.

Risks of Overpaying Under the New Model

Enterprises face several new risks in the Broadcom VMware era:

1. Paying for shelfware
   Under VCF, organizations are licensing products (e.g., NSX or Aria) that they may never deploy but can’t unbundle.
2. Price increases at renewal
   Broadcom is known for driving aggressive margins post-acquisition. Many enterprises are reporting steep renewal uplifts compared to previous contracts.
3. Partner network disruption
   Broadcom drastically reduced VMware’s partner ecosystem, cutting thousands of resellers and narrowing the channel. This limits competitive bids and negotiating leverage.
4. Reduced support options
   With SnS gone, support is tied to subscriptions. Customers who previously managed support separately now have fewer choices.
5. Future uncertainty
   VMware’s roadmap under Broadcom is still evolving. Customers are unsure how pricing, packaging, and feature availability may change again in the next 12–24 months.

What Alternatives Enterprises Are Considering

Given the changes, many organizations are exploring their options. While moving away from VMware is not simple (VMware underpins countless datacenters), enterprises are weighing alternatives, including:

1. Multi-Cloud Architectures

• Using VMware for core workloads but diversifying new deployments across Azure, AWS, or Google Cloud to reduce lock-in.
• Leveraging native services (Azure Virtual Desktop, AWS EC2, Google Kubernetes Engine) where possible instead of VMware equivalents.

2. Microsoft Hyper-V

• A common alternative for organizations already invested in Microsoft ecosystems.
• Hyper-V is bundled with Windows Server, often making it cost-attractive.
• Limitations: migration complexity and feature differences vs. VMware.

3. Nutanix or Other Hyperconverged Solutions

• Nutanix AHV is gaining traction as a VMware replacement in hyperconverged infrastructure.
• Focus on simplicity and cost efficiency, though ecosystem maturity may differ.

4. Cloud-Native & Kubernetes

• Some organizations are skipping hypervisors altogether for new projects, moving workloads directly to containers and Kubernetes.
• Reduces reliance on VMware but requires a cultural and technical shift in IT operations.

5. Hybrid Approaches

• Many enterprises will adopt a phased strategy: maintaining VMware for mission-critical workloads while migrating new or less critical workloads to alternatives.

How to Navigate VMware Licensing in 2025

If you’re facing a VMware renewal under Broadcom, here are key steps to take:

1. Audit your current usage. Identify which VMware products you actually use versus what’s bundled in VCF.
2. Model total cost of ownership. Compare new subscription costs with alternatives (Hyper-V, Nutanix, cloud-native).
3. Review multi-cloud strategy. Use renewals as an opportunity to reassess whether all workloads need to stay on VMware.
4. Engage independent advisors. With fewer partners in Broadcom’s ecosystem, external expertise is critical to avoid overpaying.
5. Negotiate proactively. Don’t wait until renewal deadlines; Broadcom is less flexible once contracts are in late stage.