Broadcom Axes VMware Perpetual Licenses Starting the Journey of Increasing Revenue

VMware VSphere Client With NVIDIA BlueField 2 DPU Virtual Switches
VMware VSphere Client With NVIDIA BlueField 2 DPU Virtual Switches

A few weeks ago, Broadcom closed the VMware acquisition. Now, the company has started the process that we discussed back in May 2022’s piece announcing the acquisition. Now, VMware is moving away from perpetual licensing. We had a busy week last week, but we wanted to at least cover this one for folks.

Broadcom Axes VMware Perpetual Licenses

Broadcom pulled an “effective immediately” halt to its perpetually licensed products. It also stopped the SnS “Support and Subscription” renewals for perpetual license products. The products that are impacted by the immediate transition to the subscription model are:

  • VMware Cloud Foundation
  • VMware vSphere
  • VMware vSAN
  • VMware NSX
  • VMware HCX
  • VMware Site Recovery Manager
  • VMware vCloud Suite
  • VMware Aria Suite
  • VMware Aria Universal
  • VMware Aria Automation
  • VMware Aria Operations
  • VMware Aria Operations for Logs
  • VMware Aria Operations for Networks

(Souce: VMware)

VMware’s announcement said that this was good for customers, but really, this is the first step in the process. Subscriptions may sound like a pay-as-you-go service, but realistically, it becomes an easy way for VMware to increase pricing over time. Customers cannot skip versions and price increases. It is also very hard to move away from VMware. An organization has folks who are VMware admins who do not necessarily have experience with other offerings. Also, VMware’s offerings are in many ways unique.

This was all known beforehand. We noted at the outset:

“Broadcom’s playbook is to push for higher pricing in its acquisitions and across its portfolio to customers that have little ability to switch… Companies running VMware today have high switching costs, and so Broadcom likely knows that it can sell the same software and support for more without having many companies leave.” (Source: STH May 2022)

That is effectively what is happening here. Broadcom knows its new VMware franchise has high switching costs can can start extracting more money from the installed base.

Final Words

VMware has a cool technology stack. Its new owner is now on a path to get paid more for that stack. VMware customers have known this was going to happen for over a year and a half. While some customers have moved, or have plans to do so soon, most have not. This is just like many of the other businesses that Broadcom has acquired in the past.


  1. Indeed. Broadcom’s entire history is riddled with predatory acquisitions and then ruining (quality/pricing/lack of support) the products they acquired; milking the once good name of the acquisition.

    I’d put them in the top 2 worst, greater evil/better had they not existed, companies out there. If Broadcom buys the thing you are using/relying on, make finding/migrating to a different source, however painful it might be, your top priority. No good will come from staying w/them.

    On a positive note, VMware were kinda bastards in their own right so their eventual trashing/wasting away due/under to Broadcom won’t be a surprise or too much of a sadness. Time for everyone to dump insane trucks of cash onto Proxmox.

  2. My source at a local city says this is going to be bad for them. Due to issues with how they acquire and budget for money, subscriptions are difficult to work with and not knowing if the money will always be there means it’s possible for them to be able to pay for software one year and not be able to pay the next. At least with perpetual licenses they could budget for the upfront cost or get a bond to pay for the big expense and pay it off over a period of years.

    Which is unfortunate for them because the vmware software stack is great and reliable and the zero-downtime migration and fail-over is much better than proxmox

  3. So VMWare is finally following in the footsteps of AWS and Microsoft, Oracle, Dell, HPE and the rest of the biggest SW and HW tech MFGs, but somehow this article treats VMWare late entry as an evil rarely matched? Come off the high horse and see the rest of the industry…

  4. Move to Azure. Ditch your data center expenses, including VMware licensing, and move to the cloud like all the other Fortune 500s are doing.

  5. Look for a massive wave of consolidation in the VMWare VAR sector as all of them have to re-apply. VMWare has already said if you don’t sell at least $500k of product, you won’t get accepted, so all of theses small VAR’s are going to be merging to get something back.

  6. Yes, Broadcom is the new devil. Long timers will remember that Novell tried to port NetWare to Unix System V and all of those Novell admins and VAR’s screamed bloody murder. So Novell relented and it died.

    Peter Norton tried to move all of their tools to Windows (too late) and they got sold to Symantec (who also folded to Broadcom)

    Word Perfect didn’t think they had to change anything until it was too late. They ended up at Corel then died.

    There will always be an alternate to VMWare, and probably the most likely impact is all of the VMWare talent will be discarded and develop a new virtualization product.


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