VMware’s Price Increase: What It Means for Your Business

By Pawel Pikul

Are you feeling anxious following VMware’s recent acquisition by Broadcom? As someone who’s weathered many shifts in the tech landscape, I’m here to help you decode these changes and their potential impact on your business.

The Big Shift in VMware’s World
Broadcom’s acquisition of VMware on November 22, 2023 marks a significant change in the software licensing landscape. The implications of this acquisition extend far beyond mere ownership change. It marks a new strategy in the way VMware operates and interacts with its customers and partners. This isn’t just a change in the name on the letterhead; it’s a comprehensive overhaul of licensing structures, pricing models, and possibly, the features and support VMware has been known for. At Vertilocity, we’ve been analyzing how these changes will impact the services we offer, and, more importantly, how they will affect businesses like yours. The shifts in licensing definitely means changes in the costs, as we saw In the recent price increase announcement, but It also could mean a change in the scalability options, and even the types of services available.

Moreover, as these changes unfold, our role at Vertilocity evolves too. We’re not just passive observers as this change affects our clients; we’re actively engaging with these developments, adapting our service offerings to maintain the quality and affordability you rely on. We understand that every business we work with has unique needs and challenges. Therefore, our approach is not one-size-fits-all but rather a tailored strategy, designed to align with the specific demands and expectations of your business. Whether it’s continuing with VMware or finding alternative solutions, we’re committed to navigating these changes together with you.

How Will This Affect Your Costs?
Starting April 1, 2024, there will be noticeable changes in VMware’s software licensing fees. While Vertilocity is not directly linked to Expedient, these industry-wide changes are something we’re acutely aware of and our commitment continues to be to keep you informed as you prepare for these adjustments.

The software licensing fee shift is characterized by an industry trend to move away from perpetual licenses towards a subscription model. This strategic change in VMware’s approach, spearheaded by Broadcom, highlights an industry-wide departure from the traditional licensing formats many businesses have become accustomed to.

One of the key changes to VMware’s pricing structure is the halving of subscription prices for their Cloud Foundation hybrid cloud suite. Although this sounds like good news, it’s essential to note that the base pricing from which this reduction is calculated remains unclear. Moreover, the abrupt discontinuation of perpetual licenses and associated support contracts marks a significant shift in VMware’s offerings. This change paves the way for a more concentrated product portfolio, primarily revolving around two key products: the Cloud Foundation and vSphere Foundation​.

This transformation is likely to have varied impacts on different customers. Some users have reported steep increases in their licensing costs, with anecdotes of increases as high as 1,200%. For instance, there’s a report of a UK university facing a 1,250% increase in VMware support costs in their upcoming renewal. While these figures might vary and are based on individual experiences, they highlight the potential scale of change in the pricing landscape under Broadcom’s management​​.

In the wake of this change, you might be evaluating your options. In light of the new pricing structure, if you’re currently using VMware solutions, we’re here to discuss alternatives that may suit your needs, such as Hyper V. Note, if you are considering canceling VMware without replacing it I strongly recommend you read the recent article by my colleague, Scott Velmer, Cybersecurity for Small Businesses: Unveiling the “Easter Eggs” of Digital Protection, before making a decision. Whether it’s sticking with VMware or exploring other options, we’re here to support your decision.

Next Steps and Resources
If you have any questions or need more detailed advice on how these changes might affect your specific situation, please don’t hesitate to reach out to us at MSP@vertilocity.com. We’re here to guide you through these transitions.

To gain a more comprehensive understanding of the recent changes in VMware’s pricing and licensing under Broadcom’s management, here are some insightful articles:

Remember, change is inherent in technology, but it doesn’t have to be a roadblock. Vertilocity is here to ensure that your business continues to thrive, no matter the tech landscape.