Broadcom Makes Major Changes to VMware Licensing Model

Broadcom Makes Major Changes to VMware Licensing Model

Recently, Broadcom completed its $69-billion acquisition of VMware. While it is early days for the integration, Broadcom has already made significant changes to VMware’s software licensing, product portfolio, and partner program. 

Previously, VMware offered perpetual licensing for standalone solutions and its platform, enabling customers to forecast spending and drive more ROI the longer they used the company’s virtualization solutions. Now, Broadcom has combined four business divisions into one unit; transitioned over to a subscription-based pricing model; and swapped individual product sales for two bundled offerings, VMware Cloud Foundation (VCF) and VMware vSphere Foundation, according to an article in Data Center Knowledge.

VMware Costs Increase as Much as 1,200% for Product Bundles 

According to the article, customers who only used vSphere are facing price increases, while those that used the VCF bundled solutions will see 50% decreases and those that used vSphere and vSAN together will have similar pricing under the new subscription licensing structure. 

As a result, some VMware customers are experiencing cost increases of as much as 1,200%, due to changes such as discontinued products, forced reclassifications as strategic customers, or minimum purchase requirements. For example, managed service providers that use the VMware Virtual Cloud Service Program (VCSP) to serve smaller businesses are now required to buy 3,500 cores, whether or not they need them. 

IT teams seeking to get a handle on Broadcom’s recent changes, can use Device42 to report on all under- and over-utilized instances of VMware software licenses to drive down cost. Device42 identifies all hardware, software, virtualized solutions, and cloud services running across on-premises and public cloud infrastructure. 

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Price Impacts Disproportionately Felt by Small and Mid-Sized Business Customers 

Forrester Research Analyst Tracy Woo, quoted in Data Center Knowledge, says the VMware product bundling is better and simpler, but will create less flexibility for customers, meaning that they may overpay or underpay for the solutions they buy. 

Pricing impacts are primarily affecting small to mid-sized businesses, as enterprises are more likely to consume more solutions, move to a platform model, and exceed required purchase minimums. 

Use Device42 to Explore Licensing and Alternative Strategies

If VMware customers decide to migrate to another solution, Device42 can help optimize that path. In addition to auto-discovering all VMware solutions, Device42 identifies all upstream and downstream dependencies including storage, service, and software. Device42 helps IT teams create  business service maps and application groups to plan migrations effectively and minimize operational disruptions. By Identifying under-used as well as critical systems, IT organizations can streamline migration planning and execution, accelerating processes by up to 80%.

Whether you plan to stay on VMware solutions or explore other options, it’s not a bad idea to quantify the impacts of Broadcom’s new licensing model to understand how they will impact your IT budget and virtualization strategy. 

Count on Device42’s discovery and reporting to help you drive quickly down the cost of VMware licenses. 

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Rock Johnston
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