Major Changes After Broadcom Acquired VMware
VMware was acquired by Broadcom on November 22, 2023. Here are the challenges the acquisition brought to customers.
Significant Cost Escalation
- Long-Term Subscription Price Hikes: 3-year subscriptions are now 1.5 times more expensive, and 5-year subscriptions are twice as expensive.
- Forced Over-Licensing: Minimum core purchase jumps from 16 to 72 cores per CPU (effective April 2025), requiring customers to pay for unused cores.
- vSAN Expansion Costs: Exceeding scalable storage beyond free vSAN entitlements mandates relicensing of the whole raw capacity
Stringent Subscription Terms and Penalties
- Zero Grace Period: Immediate late fees apply upon subscription expiry.
- Retroactive Penalties: 20% fee on first-year subscription costs for renewals after the anniversary date, even for accidental delays.
Licensing Complexity and Reduced Flexibility
- Reintroduced Licensing Tiers: vSphere Standard and Enterprise+ return, but the retirement of Essentials+ limits options for smaller deployments.
- Add-on Features: Many advanced features (e.g., vSAN, NSX, vRealize) require separate licenses, making budgeting and planning more difficult.
Strategic Neglect of Smaller Customers and Partners
- Broadcom is eliminating VMware’s “Registered” partner tier and white-label program, disqualifying over 18,000 small resellers and reducing opportunities for SMB-focused providers.
- The new partner structure is more exclusive, with an invitation-only VCSP program and elevated technical and operational requirements that favor large, well-resourced partners.
- Broadcom is realigning VMware’s focus toward large enterprises and hyperscale private cloud platforms, deprioritizing the needs of smaller customers and partners.