At a Glance
Broadcom’s acquisition of VMware has replaced perpetual licences with subscription-based pricing based on core counts, bundled products, longer contract commitments and tighter partner controls.
These changes increase costs, reduce flexibility and complicate planning for UK SMEs. As a result, your business will likely need to review your licence and evaluate alternative managed cloud solutions.
Call 02037 407840 to find out how you can navigate these changes with a cost-effective solution from BlackBox Hosting.
VMware Licensing Changes
If you’re a UK SME looking to cope with the recent VMware licensing changes, you’ve come to the right place.
VMware has long been a trusted name for virtualisation, cloud management and IT infrastructure. But the Broadcom acquisition of VMware in 2023 has resulted in some significant changes. These licensing changes have had an impact not only on UK small businesses but also on the overall IT industry.
As a business owner using VMware, you’ll eventually have to renew your contract or licence. Before you do, it’s best to know what these changes are and how you can prepare for them.
As a VMware-managed services provider partner, in this blog, we’ll help you understand the changes to expect and the suitable VMware alternative solution for your business’ needs.
What’s Changing in VMware?
Broadcom’s acquisition of VMware has led to multiple shifts in how businesses procure and manage VMware solutions.
1. VMware Introduces Subscription Licensing, Ends Perpetual Licensing
Broadcom announced that it would stop offering perpetual licensing for VMware products and instead switch to a subscription-based licensing model. The approach was introduced to help Broadcom achieve its goal of increasing recurring revenue.
Previously, SMEs could buy VMware licences and pay for annual maintenance. However, this changed to a subscription-only option beginning in 2024 and continuing through 2026.
What This Change Means for SMEs:
Businesses that previously paid for VMware perpetual licenses as a fixed cost now need to plan for variable costs based on usage, selected options and service tiers. For small and large-scale deployments, this change can lead to rising costs as services scale.
The subscription model also removes the familiar convenience of locking in pricing for extended periods. This may mean that SMEs can no longer secure long-term rates.
2. Changes to VMware’s Product Portfolio
In addition to price changes, VMware has modified its product offerings. The company is shifting its focus to cloud services while reducing its portfolio of legacy products and virtualisation tools.
Instead of licensing individual products, your company must now license bundled packages (VMware vSphere Foundation and VMware Cloud Foundation) that include the features and tools it requires.
What This Change Means for SMEs:
Although this simplifies the product portfolio, it increases costs and reduces flexibility, particularly for small businesses that only use certain features and tools from the VMware portfolio.
Expect training requirements and integration challenges if your business relies on VMware’s legacy products that may be phased out or replaced by newer VMware licensing solutions. With the push for cloud-based products and services, your customisation options will become more limited.
3. Core-Based Licensing and Minimums
VMware licensing is no longer based on host or socket counts but rather on CPU core counts. This critical change initially raised the minimum core licensing requirement from 16 to 72 cores. As a result, even small servers with 8 cores are expensive and may require 72-core licensing fees.
The good news here is that, after facing mounting criticism, Broadcom quietly reversed its decision and has maintained the 16-core minimum per CPU.
What This Change Means for SMEs:
Any infrastructure decisions now directly affect licensing costs, particularly for new VMware licenses with high-core processors. This further presses the need for businesses to right-size their workloads.
4. Changes to VMware’s Support and Service Models
VMware is known for its extensive and high-quality customer support and services. But Broadcom’s renewed approach may lead to changes in the quality and level of support services.
What This Change Means for SMEs:
With the changes already set in motion, it’s now even more important for your business to evaluate whether VMware’s support infrastructure still meets your needs or whether you’ll be better off making a change.
5. Longer Contract Commitments
The new VMware subscription licensing comes with multi-year terms, commonly 3-year lock-ins for vSphere licenses. This means vSphere users need to commit in advance for three years with an upfront payment.
What This Change Means for SMEs:
SMEs need to plan ahead and prepare for longer renewal cycles while focusing on choosing the right partner.
6. Developments in the VMWare Cloud Provider Ecosystem
Alongside VMware licensing changes, Broadcom has also updated VMware’s Cloud Service Provider (CSP) programme. Specifically, it has tightened the requirements and reduced the number of approved partners.
What This Change Means for SMEs:
This development makes your choice of VMware provider more important than ever. Working with a fully accredited provider like BlackBox Hosting allows you to continue meeting the VMware licensing requirements while providing long-term access to updates, support and stability in service delivery.
BlackBox Hosting’s Approach for UK SMEs to Manage VMware Licensing Changes
If you haven’t assessed your VMware position since the acquisition, now is the time.
When you choose BlackBox Hosting, you’ll work with a VMware-accredited cloud and managed services provider that simplifies complex changes and lowers risk, maintaining complete control during the VMware transition. We can design a powerful VMware alternative solution for SMEs impacted by VMware licensing changes, offering:
- Uncompromised Performance and Low Latency: Run your applications and websites faster and more smoothly.
- Transparent and Fixed Pricing: No forced long-term lock-ins or surprise charges. We include hypervisor licensing costs upfront, so that you can plan your budget accurately for 2026.
- Fully Managed Services: Ease into the changes by letting us handle the current and any upcoming infrastructure or licensing issues while you focus on growing your business.
- Secure at All Times: Keep your data and systems secure and compliant. We’re ISO 27001:2022 and CSA STAR-certified.
- Right-Sizing Infrastructure: We can help you review your current design, workload placement and growth plans, so you only pay for the VM capacity you actually need.
Begin 2026 with a clear understanding of VMware licensing changes and choose BlackBox Hosting as a partner. There’s still time to move away from complex and expensive VMware subscription-based licensing to our managed cloud VPS solutions. Contact us today for more information.
