New Licensing Changes Hit VMware Customers

In another significant move following Broadcom’s acquisition of VMware, the company has announced substantial changes to its licensing model that will affect customers across all segments, particularly small and medium-sized businesses.

This article breaks down the latest developments and their implications for organizations using VMware solutions.

1. Dramatic Increase in Minimum Core Requirements

Effective April 10, 2025, Broadcom is implementing the following changes:

• Minimum Core Increase: The minimum number of cores required for VMware licenses will jump from 16 to 72 cores per CPU
• Mandatory Overprovisioning: Even if a customer has a single-processor server with 8 cores, they will be required to license 72 cores

This change represents a significant price increase for smaller deployments and edge locations.

2. New Renewal Penalties

Broadcom has also introduced strict penalties for late renewals:

• 20% Penalty Fee: Customers who fail to renew their subscription licenses by their anniversary date will face a penalty equivalent to 20% of the first-year subscription cost
• Retroactive Application: These penalties will be applied retroactively, adding further pressure on organizations to manage their renewal cycles carefully

3. Impact on Different Customer Segments

The new changes will particularly affect:

• SMB Customers: Organizations with smaller deployments will face disproportionate cost increases
• Edge Computing: Businesses with small CPU footprints at edge locations will see their licensing costs multiply
• Retail Customers: Companies with multiple small installations will need to reevaluate their virtualization strategy

Looking Ahead

These changes clearly indicate Broadcom’s strategy to focus on larger enterprise customers while effectively pricing out smaller deployments. Organizations need to carefully evaluate their options, including:

• Alternative Solutions: Consider moving to more cost-effective virtualization platforms
• Infrastructure Consolidation: Review current deployments to optimize core usage
• Proactive Renewal Management: Implement strict renewal tracking to avoid penalties

As we previously reported, these changes add to the already challenging situation created by the end of perpetual licenses and significant price increases seen in recent months.

Forward Systems continues to support organizations in navigating these changes. We offer expertise in implementing alternative virtualization solutions that provide enterprise-grade features without the burden of escalating costs and restrictive licensing terms.

Our partnership with Vates enables us to provide open solutions that offer:

• Full feature parity with your existing VMware deployment
• 24x7x1 SLAs
• Fair and transparent pricing, based on the number of host - period.
• No vendor lock-in
• Rapid migration paths (typically within one month)

Don’t let these licensing changes dictate your IT strategy. Contact our team to discuss cost-effective alternatives that meet your business needs: 📧 [email protected]