If you're running VMware and your renewal quote landed in the last year, you already know where this post is going. Since Broadcom closed its acquisition of VMware, the licensing model has changed so dramatically that "renew as-is" is no longer a real option for a lot of our clients. It's a decision point.
What Actually Changed
Broadcom eliminated perpetual licenses entirely in February 2024 and moved the whole VMware catalog to subscription-only. At the same time, it took a product line that used to have more than 160 SKUs and collapsed it down to essentially two bundles: VMware Cloud Foundation (VCF) and VMware vSphere Foundation (VVF). If you just wanted vSphere and nothing else, that flexibility is largely gone.
Then, effective April 2025, Broadcom raised the minimum order size from 16 cores to 72 cores per subscription. That's not a typo. If you're running a single server with one 8-core processor, you are now required to license 72 cores, meaning you pay for 64 cores of capacity you'll never use. At roughly $350 per core, that minimum alone prices out a lot of small and mid-sized environments before you've added a single VM.
The net effect, per multiple 2026 pricing analyses, is that typical subscription resets on former perpetual estates are landing above 100% of prior annual cost, with some customers reporting increases as high as 1,500% depending on their prior discount tier and edition.
Why This Hits SMBs Hardest
Enterprise customers with large core counts and negotiating leverage can sometimes absorb this into a renegotiated 2 to 3 year term. SMBs can't. A shop running two or three hosts for a handful of production workloads was never going to need 72 cores of licensing, and now they're being billed as if they do. For a lot of our clients, that's the moment VMware stopped being "the safe, boring choice" and started being the line item that no longer makes sense.
What We're Telling Clients
We're not telling every client to rip and replace overnight. A full migration is realistically a 24 to 36 month undertaking if done right, and for some workloads staying on VMware with a negotiated VCF discount is still the least disruptive path in the short term. But we are walking clients through three real options:
Stay and negotiate. Accept VCF or VVF pricing, but push hard on the negotiated discount and lock it for the full term rather than accepting a 1-year renewal at list price.
Partial migration. Move lower-priority workloads first, things like dev/test, secondary sites, or non-critical line-of-business apps, off VMware, keeping tier-1 production on vSphere while you build confidence in the alternative platform.
Full migration. Commit to moving everything, typically to Proxmox VE, Hyper-V, Nutanix, or a public cloud provider, depending on workload profile and existing storage investment.
Why Proxmox Keeps Winning the Conversation
Of the alternatives, Proxmox VE has become our default recommendation for clients doing a full or partial migration, and it's not just about price. It's a mature, KVM-based hypervisor with an active development cadence, real clustering and HA, and ZFS and Ceph support out of the box. As of Proxmox VE 9, it also includes features like snapshots-as-volume-chains for iSCSI and Fibre Channel SANs and SDN Fabrics for spine-leaf network architectures that put it much closer to enterprise-grade than it was even two years ago. Add in that Veeam now offers native replication and instant recovery for Proxmox VE, and the backup/DR story that used to be VMware's biggest advantage has largely closed.
Most migration cost-benefit models put the break-even point for moving off VMware somewhere between 9 and 14 months, once you account for license savings against the migration labor itself. For clients facing a 72-core minimum on hardware that will never need it, that math tends to work out fast.
If your VMware renewal is coming up and the numbers don't look right, that's exactly the conversation worth having before you sign anything. Reach out and we'll run the numbers with you.
Want this reviewed against your environment?
We'll walk your stack with you and tell you plainly what we'd change first.