Broadcom’s VMware acquisition brought massive pricing changes that caught most IT departments off guard. The company eliminated perpetual licenses, forcing everyone into subscription models while implementing steep VMware license cost increases and new minimum core requirements.
These aren’t minor adjustments: Broadcom restructured the entire VMware license pricing model. Small businesses now face minimum purchase requirements that can triple their costs, while enterprises deal with per-core pricing that makes scaling expensive.
The VMware license changes also introduced bundling that forces customers to buy products they don’t need. Organizations that relied on VMware for years must now evaluate alternatives like Red Hat OpenShift or recalculate their infrastructure budgets entirely. Understanding your current VMware license usage and exploring replacement options has become essential for maintaining reasonable IT costs.
Understanding the Broadcom VMware Acquisition Impact
When Broadcom’s acquisition of VMware closed in November 2023, it sent shockwaves throughout the IT community. This wasn’t just a change in ownership—Broadcom completely overhauled how VMware products are packaged, priced, and sold, leaving many organizations scrambling.
Timeline of Key Changes
The speed of change after the acquisition has been staggering. Within months of taking control, Broadcom eliminated perpetual licensing entirely, pushing all customers into subscription models. Then came the real surprise: According to CRN, starting April 10, 2025, the minimum VMware license purchase increased substantially, from 16 cores to 72 cores. This change affects organizations with smaller server deployments disproportionately, as a single-processor server with 8 cores now requires licensing for 72 cores.
The penalties for late renewals add another painful twist. Miss your anniversary renewal date, and Broadcom will charge you an extra 20 percent of your first-year subscription price. These penalties kick in retroactively, which means organizations without tight contract management processes face unexpected bills that can throw budgets off track.
Organizations with smaller CPU footprints at edge locations face the biggest financial impact from minimum core requirements jumping from 16 to 72 cores.
Core Licensing Model Shifts
The old per-CPU perpetual licensing model is gone, replaced with core-based subscriptions that require annual payments. Under this new structure, you pay based on processor cores in your environment, with that 72-core minimum applying to every deployment—no exceptions.
Perhaps most frustrating is the move to bundled packages. You can no longer buy individual VMware products separately. Instead, you must choose from predetermined bundles packed with multiple components. This means that even if you only need basic virtualization, your VMware license cost will include features you don’t use. The bundling strategy pushes up VMware license prices across the board, making it harder to control spending on VMware license changes that may not align with your actual needs.
Learn How To Best Backup & Restore Virtual Machines Running on OpenShift
Major VMware License Price Adjustments
Broadcom’s acquisition of VMware has created a seismic shift in how organizations pay for virtualization infrastructure. These VMware license changes affect every aspect of IT budgeting and infrastructure planning.
Subscription-Based Licensing Requirements
Broadcom has completely eliminated perpetual licensing, which means every customer must now commit to annual subscriptions. Miss a payment, and you lose access to support, updates, and potentially your entire virtualization environment.
This shift fundamentally alters your IT budget structure. Where you once made large capital purchases every few years, you now face predictable but unavoidable annual expenses. Organizations that stretched VMware license renewals across three-to-five-year cycles suddenly need to find funding every twelve months.
The financial impact goes beyond simple payment timing, too. According to Broadcom’s official documentation, the new per-core model counts every physical CPU core across all ESXi hosts. Each core needs its own license, and minimum purchase requirements hit smaller environments particularly hard.
Minimum Core License Thresholds
As mentioned previously, Broadcom raised minimum core requirements from 16 to 72 cores per purchase. Running a server with just 8 cores? You still pay for 72. This change alone could multiply your licensing costs by four or five times, regardless of your actual hardware specifications. The mathematics are brutal for smaller deployments. Edge computing deployments, remote offices, and test environments all face the same inflated minimums.
VMware License Cost Comparison: Before vs. After Broadcom
These examples show how the new minimums affect different server configurations, demonstrating the real-world impact on your VMware license price.
Server Configuration | Old Minimum (16 cores) | New Minimum (72 cores) | Cost Multiplier |
Single 8-core server | 16 cores required | 72 cores required | 4.5x increase |
Dual 16-core server | 32 cores required | 144 cores required | 4.5x increase |
Quad 32-core server | 128 cores required | 288 cores required | 2.25x increase |
Product Bundling and SKU Consolidation
Broadcom simplified VMware’s product catalog by eliminating dozens of individual products and creating just four main bundles. This means you can’t buy standalone components anymore—no more purchasing just vSphere Standard or a single vCenter Server license. Everything comes packaged together whether you need all the included features or not.
These bundles push most customers into higher spending tiers. VMware vSphere Foundation includes management tools you might not use, while VMware Cloud Foundation adds networking and storage features that could duplicate your existing infrastructure investments. The bundling strategy effectively increases your VMware license cost across all deployment scenarios.
Financial Impact on Different Organization Types
The VMware license cost increases hit organizations differently depending on their size, infrastructure setup, and how they deploy their systems.
Small to Medium Enterprise Considerations
Small and medium enterprises are getting hit the hardest by these changes, as described earlier. Picture a typical SME with three 16-core servers—they previously needed 48 cores of licensing, but now they need 216 cores. That’s a 350% increase for the exact same hardware. The move from perpetual to subscription licensing adds another layer of financial stress.
Branch offices and remote locations make these problems even worse. Each site with a single server still needs 72-core licensing, making distributed setups incredibly expensive under the new VMware license changes. Many SMEs are now consolidating workloads or completely abandoning their edge computing plans.
Large Enterprise Cost Implications
Large enterprises face different challenges from these VMware license changes. While they usually exceed the minimum core requirements, the switch to per-core pricing and mandatory bundling creates huge budget impacts across thousands of servers. A typical enterprise data center with 2,000 cores might see annual licensing costs jump from $500,000 to over $1.5 million.
The bundling strategy hits large enterprises particularly hard because they previously optimized their VMware license spending by buying only what they needed. Now they have to purchase complete infrastructure suites, often duplicating capabilities they already have from other vendors. This creates both higher costs and more architectural complexity.
VMware License Changes for Hybrid Environments
Hybrid environments are dealing with some unique headaches under the new licensing model. Organizations running VMware across on-premises data centers, private clouds, and edge locations have to license each deployment separately, with minimums applying everywhere. A company with 20 edge sites now needs 1,440 cores of licensing (72 × 20) regardless of what hardware it is actually running.
Here’s a step-by-step approach to figure out what your hybrid environment will cost under the new VMware license structure:
- Inventory all deployment locations: Document every site running VMware, including data centers, branch offices, and cloud instances.
- Calculate core requirements for each site: Count physical CPU cores at each location, applying the 72-core minimum to sites below that threshold.
- Map current licensing to new bundles: Determine which Broadcom bundle each site requires based on features currently in use.
- Project annual subscription costs: Multiply core counts by per-core pricing for your selected bundle across all locations.
- Identify consolidation opportunities: Look for workloads that can be combined to reduce the number of licensed deployments.
Working through this assessment helps you understand the real financial impact and spot potential ways to cut costs before your renewal deadlines hit.
The subscription model also makes hybrid cloud cost management more complicated. Organizations can’t spread licensing costs across multiple years anymore, making it harder to justify temporary or seasonal deployments. This is pushing many enterprises toward public cloud alternatives where they only pay for the resources they actually use.
Strategic Infrastructure Alternatives and Data Protection
With VMware license cost increases creating budget pressures, many companies are evaluating alternatives that offer better economic models without sacrificing functionality. Red Hat OpenShift Virtualization Engine (OVE) has emerged as a compelling choice, providing container orchestration capabilities and Virtual Machine management that align better with both cloud-native strategies and financial constraints.
Red Hat OpenShift Virtualization Engine Migration Benefits
OVE addresses many of the pain points that make the new VMware license price structure so challenging. Instead of dealing with punitive minimum core requirements, you get predictable subscription costs based on actual usage. This eliminates the scenario where you’re paying for theoretical capacity that your organization will never actually need.
The OpenShift approach brings operational advantages that traditional virtualization simply can’t match. Applications deployed on OpenShift become highly portable across different environments, helping you avoid the vendor lock-in situations that many organizations face. Development teams can work with VMs and containers locally, then deploy to the same OpenShift environment in production, eliminating the common “it works on my machine” issues that slow down IT operations.
OpenShift’s subscription model eliminates the surprise budget impacts that VMware’s minimum core requirements create for distributed environments.
Maintaining Data Protection During Transitions
Moving away from VMware infrastructure doesn’t mean compromising on data protection requirements. Many organizations find that their backup and recovery needs actually become more complex during migration periods. You need to protect both existing VMware workloads and new OpenShift deployments while ensuring business continuity throughout the transition.
The main challenge involves maintaining consistent data protection policies across different platforms. Your existing VMware backup solutions won’t work with containerized applications, and traditional backup approaches often miss the dynamic nature of container workloads. This creates protection gaps at exactly the wrong time: when you need reliable data protection most.
OpenShift Backup and Recovery Solutions
Trilio’s OpenShift Backup and Recovery solution tackles these challenges with data protection built specifically for Red Hat environments. The platform captures complete application snapshots, including objects, metadata, and configurations, ensuring that entire environments can be restored accurately across different OpenShift clusters.
The solution includes incremental backup capabilities that reduce both storage costs and backup windows by only capturing changes since the last backup. This is especially valuable when managing large-scale container deployments where full backups would consume excessive bandwidth and storage resources. Automated scheduling keeps your backup policies consistent without requiring manual intervention.
Here’s how OpenShift backup capabilities compare to traditional VMware data protection approaches.
Feature | Traditional VMware Backup | OpenShift Backup |
Backup Granularity | VM-level snapshots | Application-consistent with Kubernetes objects and VMs |
Cross-Platform Restore | Limited to VMware infrastructure | Any OpenShift cluster |
Licensing Model | Per-socket or per-core with minimums | Per-socket or per-core |
Role-based access control ensures that backup operations align with your existing security policies, while retention management helps maintain compliance with data regulations. The monitoring and reporting features provide visibility into backup status across all your OpenShift environments, giving you confidence that your data protection strategy will remain strong during and after your migration from VMware license requirements.
Ready to explore how OpenShift Backup and Recovery can support your infrastructure transition? Schedule a demo to see how data protection can simplify your migration away from VMware’s costly licensing model.
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Perform secure application-centric backups of containers, VMs, helm & operators
Use pre-staged snapshots to instantly test, transform, and restore during recovery
Scale with fully automated policy-driven backup-and-restore workflows
Conclusion
Broadcom’s acquisition of VMware has reshaped the virtualization market through the elimination of many ecosystem and channel partners, mandatory subscriptions, 72-core minimums, and forced bundling that can increase expenses dramatically. Organizations now face immediate budget pressures that require strategic responses rather than automatic renewals. The calculations show that staying with VMware under the new VMware license price structure means either accepting substantially higher costs or exploring alternative infrastructure platforms.
Red Hat OpenShift provides a viable solution that tackles both the financial and operational challenges created by VMware license changes. The migration needs thoughtful planning, especially when it comes to data protection, but organizations that move quickly can sidestep the most severe effects of Broadcom’s pricing approach. Begin with calculating your actual VMware license cost under the new model, then assess how OpenShift’s container-based framework could lower both expenses and vendor lock-in while preserving business operations.
FAQs
When did Broadcom implement the new VMware licensing changes?
Broadcom implemented the major VMware licensing changes shortly after acquiring VMware in November 2023, with the most significant changes—including the 72-core minimum requirement—taking effect on April 10, 2025.
How much can VMware license costs increase for small businesses under Broadcom's new model?
Small businesses can see VMware license cost increases of 350-450% due to the new 72-core minimum requirement, especially those running single servers with fewer cores than the minimum threshold.
Can organizations still purchase perpetual VMware licenses?
No, Broadcom completely eliminated perpetual VMware licenses and now requires all customers to use annual subscription-based licensing models with mandatory renewals.
What happens if an organization misses their VMware renewal deadlines?
Organizations that miss their VMware renewal anniversary date face a 20% penalty fee on top of their first-year subscription price, applied retroactively from the missed renewal date.
Is it possible to buy individual VMware products separately under the new licensing structure?
No, Broadcom consolidated VMware’s product catalog into just four main bundles, eliminating the ability to purchase individual components like standalone vSphere or vCenter Server licenses.
