The Future of VMware Under Broadcom

Broadcom’s acquisition of VMware marks one of the largest shifts in IT licensing. As VMware under Broadcom transitions to a subscription-only model, organizations face changes to pricing, packaging, and governance. This guide explains what’s changing, how it affects your IT and finance strategy, and what steps you can take to stay compliant and cost-effective.

What’s Changing in VMware Licensing

From Perpetual to Subscription Models

Traditional perpetual licensing has been replaced with subscription bundles. Measurement is moving from per-CPU to per-core with minimum requirements, with VMware Cloud Foundation (VCF) as the flagship bundle.

Effective Window: Changes initiated in late 2023 are now impacting renewals in 2025.

Agreements: Perpetual licenses and many Enterprise License Agreements (ELAs) have been phased out. Moving forward, all VMware licensing is subscription-only.

Metric Shift: Per-CPU to Per-core with a 16-core minimum per CPU in common bundles. This shift can increase costs as organizations may need to license more cores than they actively use.

Packaging: Core components (vSphere, vSAN, NSX) are bundled into two main subscriptions: VCF and VVF. VMware Cloud Foundation 9.0 adds enhanced reporting capabilities, and Private AI Services are now included in the core subscription, while advanced GPU-driven AI features require additional licensing.

Portfolio Moves: Horizon and Workspace ONE have transitioned to Omnissa, allowing VMware to focus on its core infrastructure and cloud foundation offerings.

The Goal: Broadcom aims to simplify VMware’s product portfolio, standardize pricing, and accelerate the shift to subscription-based models while positioning VCF 9.0 as a platform for modern infrastructure and enterprise AI.

Financial and Operational Impact

These changes will affect how you plan, budget, and manage your VMware environment.

Significant Cost Increases

Subscription bundles can lead to significant cost increases compared to legacy perpetual models. Minimum core requirements may result in over-licensing and bundled products you don’t use can inflate spend.

Complex Budget Forecasting

Moving from perpetual licensing to subscriptions disrupts traditional budgeting. Instead of long-term investments, IT and finance teams must now manage recurring annual costs that fluctuate at renewal, making forecasting less predictable.

Additionally, VMware under Broadcom’s bundle-based approach can also make it harder to align purchases with your actual needs.

New Reporting Cadence & AI Services

New VCF 9.0 reporting requirements mean organizations must validate consumption data every 180 days. This creates additional operational overhead for ITAM and finance teams to stay compliant and maintain accurate spend tracking.

With Private AI Services included in core subscriptions, enterprises must strategically determine when and how to adopt these features, balancing business needs with financial impact.

Data-Driven Optimization Strategies

You can turn Broadcom’s changes into an advantage with the right data, strategic planning, and negotiation approach.

Step 1:  Establish Your Effective License Position (ELP)

We establish a definitive Effective License Position (ELP) for your VMware environment. Our analysis maps entitlements versus consumption—including VCF 9.0 reporting data—to identify opportunities to reduce waste, right-size bundles, and avoid unnecessary spend.

Step 2:  Evaluate Options and Strategic Alternatives

Our experts go beyond analysis; we strategize. We work with you to develop a comprehensive VMware renewal or transition plan, aligned with your long-term infrastructure and AI roadmap—including where alternative solutions can create leverage.

Step 3:  Strengthen Negotiation Readiness

We equip your procurement teams with industry benchmarks, contractual insights, and data-backed arguments. From bundled packaging to AI services, we help you negotiate confidently to achieve the best terms and maximize value.

Take Control of Your VMware Future

Broadcom’s shift to subscription-only licensing, new VCF 9.0 reporting requirements, and Private AI Services make now the time to act. With proactive planning in this new landscape of VMware under Broadcom, Anglepoint can help you mitigate risk, optimize spend, and turn these changes into a strategic advantage.