If your organization runs VMware — and most mid-market businesses in Ontario do — you are either already dealing with a significant price increase, or you will be at your next renewal. This is not speculation. It is happening now, and the details matter.
Broadcom completed its acquisition of VMware in 2023. Since then, the changes to VMware’s licensing, pricing, and partner ecosystem have been the single most disruptive vendor decision affecting mid-market IT infrastructure in years.
Here is what you need to understand.
What changed
Broadcom has fundamentally restructured how VMware products are sold:
Perpetual licensing is gone. If your organization purchased VMware licences outright and paid annual support, that model no longer exists. All customers must transition to subscription-based licensing at renewal.
59 product SKUs were eliminated. You can no longer buy individual VMware components. Everything is bundled into a small number of subscription packages — whether you need all the included products or not.
Minimum licensing units increased dramatically. In 2025, the minimum licensing unit changed from 16 cores to 72 cores per bundle. For a mid-market organization running a modest virtualization environment, this means paying for capacity you will never use.
The partner ecosystem shrank by 90%. Broadcom reduced its partner base from approximately 5,000 to roughly 500 globally. Many of the cloud service providers and resellers that mid-market businesses relied on for VMware support have lost their agreements.
The net effect: customers are seeing price increases of 3-12x at renewal, depending on their previous licensing structure and consumption.
This is not temporary
It is tempting to wait — to assume that Broadcom will walk back the pricing, expand the partner base, or offer mid-market relief. The data suggests otherwise.
Broadcom has publicly stated that it will accept losing 30% or more of VMware’s market share in exchange for significantly higher margins on the remaining customers. This is a deliberate monetization strategy, not a transition problem that will self-correct. The longer you wait, the fewer options you have and the closer you get to a renewal under terms you did not choose.
Three paths forward
Every organization running VMware has three options. The right choice depends on your environment, your timeline, and what you are willing to change.
1. Stay on VMware through a qualified cloud service provider
If your workloads are tightly integrated with VMware and migration risk is high, you can continue running VMware through one of the remaining qualified CSPs — companies like Rackspace, Expedient, Equinix, TierPoint, or LightEdge. This preserves your existing environment but moves the licensing relationship to a provider with a current Broadcom agreement.
This path makes sense when migration complexity is genuinely high, when critical applications have VMware dependencies, or when you need time to plan a longer-term transition.
2. Migrate to an alternative virtualization platform
The VMware disruption has accelerated adoption of alternative hypervisors. Options include:
- Nutanix AHV — a commercial hypervisor with a strong mid-market presence and no per-core licensing
- Microsoft Hyper-V — included with Windows Server licensing, familiar to Microsoft-centric environments
- Proxmox and KVM — open-source alternatives with growing enterprise adoption, particularly for organizations with capable internal IT teams
Migration is not trivial — it requires workload assessment, compatibility testing, and planning — but for many mid-market organizations, the long-term economics are dramatically better than staying on VMware at the new pricing.
3. Abstract the infrastructure layer
Some organizations are using this moment to move workloads to cloud infrastructure or platform-agnostic abstraction layers that reduce dependency on any single hypervisor. This is a longer-term play but can be combined with either of the first two options.
When to act
The critical decision point is your contract renewal window. Once you renew under Broadcom’s new pricing, urgency drops until the next cycle — but you have locked in the higher cost.
If your renewal is approaching in the next 6-12 months, the time to evaluate alternatives is now. Assessment and migration planning take time. Waiting until renewal is imminent limits your options to accepting the new terms.
If you have recently renewed, you have runway — but that runway should be used for planning, not waiting.
The question to ask
The simplest starting point is one question: Are we running VMware, and when does our agreement renew?
If the answer is yes and the renewal is within the next year, an independent evaluation of your options — staying on VMware through a qualified provider, migrating to an alternative platform, or a phased hybrid approach — is worth the conversation.
At node corp., our cloud advisory practice helps mid-market organizations navigate exactly this kind of vendor disruption. We evaluate your current environment, model the cost of each path forward, and present transparent comparisons — so you make the right decision for your business, not the one a vendor needs you to make.
If your organization is running VMware and facing a renewal, schedule a cloud briefing with our advisory team.