Broadcom’s VMware Overhaul is Leaving Many Customers Behind

Broadcom’s new VMware strategy is disrupting the virtualization landscape, and small to mid-sized businesses are feeling the impact.

Broadcom has dramatically increased license costs for smaller customers and ended thousands of trusted reseller relationships, signaling that VMware is now an enterprise platform. For many companies, this disruption has left them looking for VMware alternatives.

Licensing and Pricing Changes

In early 2025, Broadcom introduced the new VMware licensing model that included an increase from a 16-core to a 72-core minimum for license purchases. Even if your infrastructure only uses 16 cores, you must now pay for 72, raising your annual support costs from around $2,000 to over $10,000.

Broadcom also made other key changes affecting its small customer base:

• Subscription-Only Model: Perpetual licenses are gone. All VMware products now require ongoing subscriptions.
• Bundled Offerings: Customers must now buy bundled suites, often paying for features they don’t need.
• Late Renewal Penalties: If you miss a renewal, you will be hit with a 20% penalty, and in some cases, cease-and-desist letters for lapsed licenses.

Partner Program: “Cleaning House”

Broadcom has also cut the “Registered” tier of its VMware partner program, ending its relationship with thousands of smaller resellers with just 60 days’ notice. The focus is now on Select, Premier, and Pinnacle partners—those with deep enterprise investments and VMware Cloud Foundation (VCF) ability.

For many companies, this means:

• Losing trusted local IT partners
• Being forced to work with larger, and many times more expensive and less accessible providers
• Facing longer support wait times and higher support costs

What Does This Mean?

Broadcom hopes to optimize its $69 billion investment in VMware by focusing on its top 600 enterprise customers and quickly phasing out smaller partners and customers. 

For many companies, VMware is no longer a workable long-term solution due to fewer support options, higher costs, limited access to VMware solutions, and reduced flexibility.

What Can You Do?

You have options, and Yeo & Yeo Technology is here to help you find the best choice.

1. Cloud Migration (Azure, AWS, etc.)

Public cloud platforms offer scalable, secure virtualization without the hardware burden, making them ideal for remote teams or seasonal workloads.

2. Hybrid Infrastructure

Keep critical workloads on-prem while shifting others to the cloud. This approach offers flexibility, cost savings, and future-readiness.

3. Hyperconverged Infrastructure (HCI)

Solutions like Scale Computing combine computing, storage, and networking into one system at a lower total cost and include all the virtualization licensing.

Market Disruption

Many businesses are already starting to migrate away from VMware to other solutions. Scale Computing has experienced record growth since the Broadcom acquisition. Others are adopting hybrid solutions using Microsoft’s Hyper-V. Many are moving to Azure or AWS. For less complex infrastructures, the M365 platform offers a viable replacement utilizing Teams, SharePoint, and OneDrive. The important lesson is that you need to start planning now.

This VMware disruption puts many companies in a challenging position, but waiting is not the answer. Whether you’re exploring cloud, Hyperconvergence, or a hybrid solution, the time to act is now. The transition from VMware to a new solution takes prior planning and involves a complex migration.

Yeo & Yeo Technology is ready to help you navigate this transition. Our team has deep expertise in VMware alternatives, including Azure, Scale Computing, and hybrid environments. Let’s build a roadmap that protects your business and positions you for growth. Contact us today to get started.