For years, VMware has been a trusted name in virtualization, a stable platform that many companies rely on to run essential applications. But since Broadcom acquired the company, there have been major changes in how VMware charges its customers. While the highly publicized price increases are troubling enough, the bigger concern may be the hidden costs.
This article takes a deeper look at the costs you might not see right away — the ones that can stretch your budget, reduce your flexibility, and put your long-term plans at risk. We’ll also explore options for shifting away from VMware, if it seems like the right move for your business.
What’s happening with VMware under Broadcom’s ownership?
Broadcom is steering VMware away from perpetual (one-time) license purchases to focus on subscription-based bundles aimed at large enterprise customers. The goal is to boost recurring revenue, but the shift has brought major changes to how VMware solutions are packaged and delivered.
By now, VMware has nearly completely phased out perpetual licenses. As Oxford Global Resources notes, these have been replaced with two core subscription bundles: VMware Cloud Foundation (VCF) and VMware vSphere Foundation (VVF). As a result, many standalone products have been discontinued or folded into these bundles. For businesses, this rigid new structure limits choice, adds complexity, and introduces hidden costs that many are only beginning to realize.
Identifying the 5 hidden costs of the new VMware model
To get a full idea of the financial impact of sticking with VMware, especially if you’re a small or medium-sized business, you need to look past the initial subscription fee. You must analyze the full spectrum of costs Broadcom’s changes have introduced, which includes:
Inflated renewal costs and penalties
Renewals are no longer straightforward. Under Broadcom’s new licensing model, some organizations have seen price hikes of 800% to 1,500%. Instead of paying per server, customers are now charged based on the number of processing cores (or virtual CPUs) per server, forcing businesses with high-performance systems to buy more licenses than before.
Worse, penalties for late renewals now cost 20% of a first-year subscription, so even small oversights can push businesses over budget.
Diminished support
Broadcom’s consolidation strategy has also affected customer support. Support tiers have been restructured, making it harder for small and mid-sized businesses to get timely, personalized help.
As a result, your IT team might have to spend more time troubleshooting issues on their own or relying on external consultants, which increases both labor and downtime costs. In some cases, discontinued VMware products may lose support entirely, increasing your risk of cyberattacks and service disruptions.
The loss of operational flexibility
Broadcom’s move to standardized bundles eliminates the option to buy products individually, forcing businesses to pay for tools in VCF or VVF they may not need. This is made worse by the discontinuation of features or entire products critical to existing workflows.
Businesses now face the costly task — both in time and resources — of reengineering systems or turning to third-party solutions to fill the gaps. The result is a more rigid IT environment that’s harder to adapt to changing business needs.
Deepening vendor lock-in
Broadcom’s bundled offerings make it easier to build an all-in-one ecosystem around your IT infrastructure. But that convenience comes at a cost. Vendor lock-in occurs if your business is so dependent on one provider’s products and services that switching to another vendor becomes too expensive or complex.
The more reliant you are on VMware, the less leverage you have to negotiate pricing or service terms. This leaves your business vulnerable to future price hikes and restrictive contracts.
The inevitable cost of migration
Migrating to a new VMware bundle or switching platforms comes with significant costs. Beyond new licensing fees, you’ll need to account for time spent on planning and execution, potential consulting fees, and employee retraining. Most importantly, planned downtime during the migration can disrupt operations and reduce productivity.
Strategic alternatives to a Broadcom-controlled future
The hidden costs of Broadcom’s new model have many businesses looking for a way out. While some are considering open-source options such as Proxmox or KVM, the most effective strategy for many organizations is a shift to a hybrid cloud model.
A hybrid cloud strategy combines private and public cloud resources into one system. Such an approach allows businesses to keep sensitive data and critical applications on their private infrastructure while using public cloud services for less critical tasks. It offers a balance of security, control, and cost efficiency while minimizing the risk of vendor lock-in.
Whichever option you choose, shifting away from a deeply embedded platform like VMware requires careful planning and execution. For this, expert-led migration services are essential. These services can guide you through the process, from initial assessment and testing to a gradual transition, minimizing downtime and ensuring your new environment is both cost-effective and optimized for performance.
Preparing for the future
Now is the time to proactively evaluate your virtualization strategy before your next renewal cycle. By understanding the full cost of VMware and exploring alternative strategies, you can make an informed decision that guarantees the long-term security and flexibility of your IT infrastructure.
Ready to move on from VMware? Liberty Center One offers a flexible cloud infrastructure alternative and expert migration support for a smooth, stress-free transition. Get in touch today to start your move.
Liberty Center One has a turnkey solution for customers looking for alternatives to VMware. Over 10 years ago, we deployed OpenStack as our service platform and migrated away from VMware to improve the customer experience and to avoid vendor lock. OpenStack is supported by a worldwide user community and is deployed by thousands of large enterprises such as NASA, Northrup Grumman, Walmart, CitiBank and Lockheed Martin to name only a few.
Customers can get their own private dedicated server with 10TB of flash storage with 30 days of immutable backups and complete DR services in a geographically diverse data center for less than $3,500 a month. We include our proven VMware migration services at no cost! Get in touch today to start your move.