Author: Saad Saleem

Broadcom’s acquisition of VMware has shaken the tech industry to its core and has significant implications for companies’ essential infrastructure worldwide. A major factor in this shake-up has been the changes to VMware licensing, which have resulted in a sharp cost increase for countless organizations.  
While the potential rise in cost is concerning, this is an opportunity to reassess VMware’s current and future role within the tech stack.  
In this post, we’ll examine the threats and opportunities to your organization to help you understand and navigate these changes, with input from VMware Pinnacle Partner Expedient.

"For many organizations, these changes could lead to substantial increases in infrastructure costs, with some estimates suggesting more than 100% hikes."

The Shift to a Subscription Model: A New Era for VMware Users 

The most significant change brought about by the Broadcom acquisition is the transition from perpetual VMware licenses to a subscription-based model. This marks a material departure from the traditional way of buying and using VMware products, and it’s a shift that has far-reaching consequences.  

Additionally, the termination of existing OEM and channel agreements and the promise of new partnerships signal Broadcom’s intention to reshape the VMware ecosystem. For customers, this means that the familiar virtualization landscape is being redrawn, and the rules of engagement are forever changed. 

What does this mean for VMware customers?  

According to VMware, “As an outcome of this portfolio simplification, many VMware software solutions will only be offered as part of VMware Cloud Foundation (VCF) or VMware vSphere Foundation (VVF). They will not be available for purchase as standalone point solutions.”

The Cost Concerns with VMware Licensing  

For many organizations, these changes could lead to substantial increases in infrastructure costs, with some estimates suggesting more than 100% hikes.  

Such figures are alarming and have understandably led to a scramble for options. Some organizations may opt to seek alternatives to VMware. Forrester analyst Naveen Chhabra boldly predicts that “20% of organizations will take steps to migrate off VMware in 2024.” 

Yet, the challenge of migrating to a new hypervisor or virtualization platform is daunting. The timing couldn’t be more inconvenient for those amid their digital transformation journeys. Although many suppliers are advocating for a wholesale move to an alternative hypervisor, we recommend a more thoughtful approach grounded in strategic, technical, and business considerations. 

Whether you’re considering doubling down on VMware or migrating to alternative options, Bridgepointe’s portfolio of solutions and partners offer the expertise, experience, and insights necessary to help you make informed decisions that align with your business outcomes. 

With that in mind, the most immediate concern is dealing with the potential cost increase for your current VMware license.  

The simplest action right now is to re-license with a Pinnacle Partner, so you can buy time to assess your go-forward strategy with or without VMware.

Looking Ahead: Multi-Cloud and Hybrid Cloud Strategies for Future Growth & Innovation  

As organizations adjust to VMware by Broadcom’s changes, many will accelerate their multi-cloud and hybrid cloud strategies. This offers an opportunity to accelerate growth and innovation as you can map out a long-term plan to transform your workload with IaaS and eventually SaaS solutions.  
The key is handling VMware licensing now, so you have space to re-evaluate all solutions in your tech stack and their ROI. While the  

changes to VMware by Broadcom licensing may seem daunting, they present an opportunity to reassess and strengthen your organization’s IT strategy and assure alignment with desired business outcomes.  
Bridgepointe, the nation’s leading tech advisory firm, can help you shift your VMware licensing to a proven partner such as Expedient and then work with you to realign your tech stack with your future business goals.