It’s been about four months since Broadcom officially closed its $69 billion acquisition of VMware, and the fallout is becoming impossible to ignore. Perpetual licenses? Gone. The sprawling product portfolio? Consolidated down to two main bundles — VMware Cloud Foundation (VCF) and VMware vSphere Foundation (VVF). Partner programs? Gutted. And the pricing? Let’s just say the forums and Reddit threads are full of infrastructure teams in various stages of grief.
I’ve managed VMware environments on and off since the ESX 3.x days, and I’ve never seen this level of anxiety in the virtualization community. Broadcom is executing the exact playbook everyone feared when the acquisition was announced, and it’s happening faster than most predicted.
The Licensing Earthquake#
Let me lay out the key changes that are driving everyone crazy:
Perpetual licenses are dead. Broadcom has moved everything to subscription-only licensing. If you bought VMware perpetual licenses — some organizations invested millions — you can keep running your current versions, but you won’t receive updates, patches, or support once your existing support contracts expire. Broadcom isn’t renewing support on perpetual licenses. This is a forced migration to subscriptions, full stop.
The portfolio consolidation eliminated standalone products that many organizations relied on. vSphere Standard, the entry-level hypervisor that smaller shops used? Gone. You now need vSphere Foundation at minimum, which bundles in vCenter, Aria operations suite, and Tanzu. VMware Cloud Foundation bundles everything including NSX networking and vSAN storage. There’s no à la carte option anymore.
Pricing is… opaque. Broadcom hasn’t published clear public pricing, pushing everything through partner channels. But reports from the field are consistent: many customers are seeing price increases of 2x to 10x compared to their previous agreements. Per-core licensing has replaced per-socket licensing, which particularly hurts organizations running high-core-count processors — essentially everyone who bought modern AMD EPYC or Intel Xeon servers.
The Channel Partner Apocalypse#
Perhaps even more disruptive than the licensing changes is Broadcom’s decimation of the VMware partner ecosystem. Thousands of partners have been dropped from the program, with Broadcom consolidating sales through a much smaller number of “preferred” partners. For many mid-market companies that relied on their local VMware partner for procurement, support, and implementation, this is a practical disaster.
I’ve talked to several colleagues running infrastructure at mid-sized companies, and the story is the same: their existing VMware partner can no longer sell them licenses, the new assigned partner doesn’t know their environment, and getting a straight answer on pricing requires escalation after escalation. It’s the kind of customer experience that drives migrations.
The Great Virtualization Migration Begins#
And migrate they are. I’m seeing more serious evaluation of VMware alternatives than at any point in the last fifteen years:
Proxmox VE is having a moment. This Debian-based virtualization platform has been around since 2008 but was always seen as a “homelab” or SMB solution. The recent flood of VMware refugees is changing that perception rapidly. It supports KVM virtual machines and LXC containers, has a decent web interface, and — critically — is open source with optional paid support subscriptions that cost a fraction of VMware pricing.
Nutanix AHV is aggressively courting VMware customers, offering migration tools and competitive pricing. For organizations that are already Nutanix HCI customers using VMware as their hypervisor, the switch to the included AHV hypervisor eliminates the VMware cost entirely.
Microsoft Hyper-V remains an option, though Microsoft’s own recent moves (removing Hyper-V Server as a free standalone product) have dampened enthusiasm somewhat. For Windows-heavy shops already licensed for Windows Server Datacenter, it’s still a reasonable path.
OpenStack and KVM for larger organizations willing to invest in operational complexity for long-term control. Several European cloud providers have run on OpenStack for years and proven it can work at scale.
The Broader Lesson: Vendor Lock-in Has a Price#
What’s happening with VMware is the most vivid illustration of vendor lock-in risk I’ve seen in my career. Organizations that built their entire infrastructure on vSphere — using vSAN for storage, NSX for networking, vRealize for management — are now discovering that deep integration with a single vendor’s ecosystem comes with a steep exit cost. The deeper you went, the harder it is to leave, and the more pricing leverage the vendor has.
I’ve been preaching infrastructure diversification for years, and I realize that’s easy to say and hard to do. VMware earned its dominant position because the product was genuinely excellent, the ecosystem was mature, and the operational model was well-understood. But “excellent product” and “safe long-term bet” are different things, and Broadcom just proved it.
For organizations starting new infrastructure projects today, I’d strongly recommend evaluating open source virtualization platforms and building operational expertise in KVM-based solutions. Not because they’re better than VMware in every dimension — they’re not — but because reducing dependency on any single vendor’s licensing decisions is a strategic imperative that this situation has made painfully clear.
My Take#
Broadcom is doing exactly what Broadcom does. They’ve done it with Symantec, CA Technologies, and now VMware. They acquire companies with large installed bases and loyal customers, then optimize aggressively for profit extraction. It’s a legitimate business strategy, and the stock market rewards it. But it’s corrosive to the technology ecosystem and deeply frustrating for the engineers and organizations caught in the gears.
If you’re a VMware shop, my advice is simple: start your evaluation of alternatives now, even if you’re not ready to migrate. Understanding your options takes time, and you don’t want to be making that assessment under duress when your renewal comes up at 5x the previous price. The VMware that existed six months ago — the partner-friendly, ecosystem-building, innovation-driven VMware — isn’t coming back.