Full narration of the briefing. Click a section heading to jump the player to that moment.
Last time we looked at the model. Today, the estate that model produced, because you cannot negotiate a VMware renewal against the product set you bought five years ago. It does not exist any more. I am Tom, Daniel is with me, and the useful thing about this episode is that most of it is documented rather than rumoured, which matters, because there is a great deal of rumour in this market.
Some of the numbers you will have been quoted by a reseller or seen in a licensing blog are wrong, and we will say which ones as we go.
So, the shape of it. Standalone perpetual sales ended in December 2023. What replaced the catalogue is two subscription offers, Cloud Foundation and vSphere Foundation, later joined by vSphere Standard and Essentials Plus at the entry end. Everything is per core, and every processor carries a sixteen core minimum whether or not you populate it.
That floor, incidentally, predates Broadcom. It arrived with VMware's own subscription pricing in 2022. What is new is that there is no longer a perpetual alternative sitting next to it. You will also hear that Broadcom collapsed eight thousand product codes into a handful.
We have looked for that number and cannot source it, so we do not use it.
There is one episode from 2025 worth knowing, because it tells you something about how terms get tested. In late March, a distributor told its partners that the minimum was moving from sixteen cores to seventy two cores per order, effective in about two weeks. Under that rule a single eight core server would have been licensed for seventy two. Within roughly a fortnight it was withdrawn, confirmed back through the same channel.
Broadcom never announced the increase, and never announced the reversal. So if a quote in front of you is built on a seventy two core floor, it is wrong. But note the shape of it: a punitive term floated through distribution, absorbed the backlash, and quietly dropped.
Two things from that same period did not get withdrawn, and both cost real money. First, the twenty percent surcharge on renewals for customers who miss their anniversary date. That one is still in force, and it is the reason a late renewal is not a neutral event. Second, a minimum contract value that prices small estates out of a direct relationship entirely.
Alongside those, in January 2025, one year renewals disappeared from vSphere Enterprise Plus and Standard, leaving three year terms paid annually up front, with thirty to fifty percent discounts offered for signing the fixed three years. Read that as what it is: your flexibility is the thing being bought.
Now the date that should be driving your plan. vSphere 8 general support ends around October 2027. Version 9 ships inside the bundle. So the real question is not when your contract expires, it is when your current version stops receiving security fixes, and for most estates that lands before the renewal they are planning around.
Broadcom has moved the support model to six years general support plus one extended, with a major release every three years, which is a genuine concession after the backlash and it does buy predictability. But it does not move October 2027. Work backwards from that date, not from your renewal letter.
One more structural change, and it is the one that quietly costs you the most. The partner channel has been cut three times. The cloud service provider programme closed to new business in January 2026, with a March deadline to close open deals. In the United States roughly nineteen providers remain from what was previously thousands.
In the United Kingdom, about nine. Distribution changed too. Dell ended its arrangement in 2024, Ingram Micro walked away entirely at the start of 2025. What that removes is not just choice, it is price discovery.
When three resellers quoted the same estate you learned something. That mechanism is largely gone, so you have to rebuild it with benchmarks instead.
Three things to do before your next conversation. Count your cores properly, per processor, against the sixteen core floor, because that number is the entire basis of the quote and it is the one most often wrong on both sides. Fix your real deadline, which is the support horizon rather than the contract date, and build the timeline backwards from it. And accept that you will not get price discovery from the channel any more, so you need an external benchmark instead.
Next time Claire and I turn to the other half of the estate, the CA mainframe portfolio, where the commercial model is different and considerably less discussed.
Redress Compliance works on contingency: our fee is 25 percent of what we save you. Nothing saved, nothing paid. Independent, buyer side only, never vendor funded. Want Redress to contact you? Reach out and we respond the same day.
Talk to a Broadcom negotiator