Since the Broadcom acquisition, the end of perpetual licences, the subscription model and per-core licensing have changed VMware costs. What to look at when deciding whether to stay, move to another platform or migrate to managed cloud.
For many years VMware was the first platform that came to mind for virtualisation. After Broadcom acquired VMware in late 2023, the licensing model changed fundamentally, and many companies faced an unexpected budget line at renewal time. This article summarises what changed, who feels the cost impact most, and the realistic options.
What Changed?
- Perpetual licences ended: in December 2023 VMware announced the end of perpetual licence sales. New purchases and renewals moved to term subscriptions.
- Products were bundled: many products previously sold separately were consolidated into bundles such as VMware Cloud Foundation (VCF) and vSphere Foundation (VVF).
- Per-core licensing: licences are counted per physical CPU core, with a minimum of 16 cores licensed per processor.
- Narrower channel: the partner programme was restructured, and many companies had to change their usual procurement channel.
Your existing perpetual licences keep working. However, once your support contract ends, you need a subscription for new versions, patches and support.
Who Feels the Cost Impact Most?
- Those running a few VMs on high-core-count servers: because licensing follows core count, cost per VM rises quickly.
- Those using only basic virtualisation: they may have to pay for a bundle including components they do not need.
- Those with small processors: processors with fewer than 16 cores are still licensed as 16 cores.
- Those who budgeted around a perpetual licence bought years ago: a subscription is a recurring annual cost.
Three Options
1. Stay and Optimise
If your applications are tightly tied to VMware or your team is not ready for another platform, the fastest savings come from right-sizing: consolidating VMs onto fewer hosts, reviewing servers with more cores than needed, and licensing the bundle you actually use.
2. Move to Another Virtualisation Platform
- Proxmox VE: KVM-based and open source, with optional enterprise support subscriptions. A clear cost advantage for small and mid-sized environments.
- Microsoft Hyper-V: comes with your Windows Server licence; a natural choice in Windows-heavy environments.
- Nutanix AHV: a platform delivered with hyperconverged infrastructure, known for ease of management.
- HPE VM Essentials: a newer KVM-based option with HPE's management layer, worth evaluating if you run HPE hardware.
3. Move to Managed Cloud (IaaS)
If you don't want to manage the virtualisation layer at all, you can move your virtual servers to an IaaS provider. In this model the hypervisor licence, hardware refresh and platform maintenance are the provider's responsibility; you pay for the resources you use.
Decision Criteria
- Contract end date: deciding a few weeks before renewal leaves you with no negotiating power. Start migration planning at least six months before renewal.
- Application support: do the vendors of your ERP, database or industry software support the target platform?
- Backup and disaster recovery tools: confirm that your backup and replication software supports the target platform.
- Team skills: plan realistic training and transition time for the new platform.
- Automation: how will your existing scripts and monitoring tools work on the new platform?
Migration Roadmap
- Inventory: list all VMs, their resource usage and dependencies.
- Classification: group them into easy to move (Linux, web servers), needs care (databases) and risky (old, unsupported systems).
- Pilot: trial the process with a few non-critical systems and test the rollback plan.
- Migration in waves: verify performance and backups after each wave.
- Decommission: after the last wave, actually end the old licence and hardware costs.
Drop the Licensing Burden with CloudRUX
On CloudRUX IaaS, the hypervisor licence is included in the service fee; you pay only for the CPU, memory and storage you use. We can inventory your current VMware environment and prepare a cost comparison and a phased migration plan. Contact us at info@cloudrux.com for an assessment.