VMware Replacement

vSphere Essential Plus/Standard editions ≤ 6.7 on a perpetual license		Forced to switch to a subscription, leading to higher costs in the long run
vSphere Enterprise Plus editions ≤ 6.7 on a perpetual license		Forced to switch to vSphere Foundations, leading to surplus features and higher costs
vSphere has expired or will be expiring in 2024		Unable to renew, forced to buy a subscription
Currently using vSAN version < 6.7 or vSAN has expired or is expiring soon in 2024		Switched to a per core and capacity-based subscription
Considering purchasing SAN storage (IP SAN, FC SAN)		High cost of maintaining external storage
Planning to expand the existing VMware Cluster		Need to buy a subscription for the entire cluster, not just the expansion
Planning to implement disaster recovery using VMware		Need to buy a whole set of VMware long-term subscription licenses

The semiconductor and infrastructure software giant, Broadcom recently acquired VMware for a staggering deal of $61 billion on November 22, 2023. The acquisition was followed by dire changes to VMware licenses, its business groups and regional offices, most of them negatively impacting customers and partners. The biggest consequence of the acquisition was the change of the VMware perpetual license to the VMware subscription license. According to our analysis, this switch in VMware licensing model burdens customers with VMware license cost, colloquially known as vTax.

Along with the rise in VMware license costs, customers and partners must bear reduced support due to the closure of multiple offices, especially in Asia-Pacific. The reduction in manpower, especially in the Asia-Pacific, can result in slow innovation, delayed responses, and less localized support. Broadcom plans to divest a few of VMware’s non-core assets while making additional changes such as add-on features, bundling, and minimum purchase capacity to VMware Cloud and vSphere Foundation.

The Broadcom VMware licensing change, potential layoffs and office closures, simplified offerings are forcing customers to reconsider and switch to other vendors in the market. The recent news of Dell’s contract termination with VMware, KKR firm’s acquisition of VMware’s End User Computing business further attests to the turbulence brought by the acquisition.