VMware's new licensing model under Broadcom. Two bundles, a 16 core floor and what it costs.

VMware is now a subscription to VCF or vSphere Foundation, priced per physical core with a 16 core minimum per CPU. First renewals cost several times the old run rate, and your core count, tier choice and exit plan decide how far that comes down.

Broadcom completed the VMware acquisition in November 2023. Within weeks it stopped selling perpetual licenses, and by March 2024 its new VMware product strategy was showing up in renewal quotes: two bundles in place of 168 SKUs, a per core metric and subscription terms with support built in.

Below we cover each part of the new model, what it has cost the enterprises we advise and what you still control. For wider reading, see the Broadcom Knowledge Hub, the VMware licensing comparison and our Broadcom advisory service.

What is VMware's new licensing model under Broadcom?

It is a subscription to one of two bundles, VMware Cloud Foundation (VCF) or VMware vSphere Foundation (VVF), priced per physical core with a floor of 16 cores per CPU. Production support is included, and perpetual licenses are no longer sold. VMware announced the end of availability of perpetual licenses on December 11, 2023.

How did 168 SKUs become two bundles?

Broadcom folded products that used to ship as standalones into VCF and VVF. If you need one component, you now buy the bundle that contains it. In January 2024 Broadcom said vSphere Standard and vSphere Essentials Plus Kit would remain for customers with light needs, but neither runs vSphere 9, which is available only with VVF 9.0 and VCF 9.0.

Who does Broadcom treat as a strategic account?

Broadcom kept a short list of strategic customers, roughly 600 to 800 accounts worldwide by our count, and serves them through its own account teams. Customers below that line are handled through the partner channel.

The line sets which discount bands you can reach, so find out early which side of it you are on.

What do VCF and vSphere Foundation include?

VCF is the full private cloud stack: hypervisor, storage, networking, management, Kubernetes and migration tooling. vSphere Foundation is the smaller bundle for customers who need the hypervisor and basic management without software defined networking. In December 2025 Broadcom confirmed VVF is no longer sold in parts of EMEA, so check it is available to you.

Why do vSphere only customers see the biggest increase?

VCF is priced well above the old standalone vSphere license because it carries products many customers never licensed. If you already paid for vSAN and NSX, much of the bundle is software you were running, so the change is smaller.

If you ran only vSphere, you now pay for storage, networking and management layers that sit idle. The matrix below compares the Broadcom renewal with the prior annual VMware cost on like for like core counts.

Where does vSphere Foundation fit?

Use it for clusters that need neither NSX nor the full management stack: edge sites, branches and compute clusters on external storage. Watch for bundle creep. Account teams often quote VCF across the board, and edge clusters end up paying for NSX they will never deploy.

Price each cluster on both tiers before you accept one tier for everything. Our VCF versus vSphere Foundation comparison sets out the feature differences, and the VCF and VVF comparison calculator prices them per cluster.

How does the 16 core minimum work?

You license every physical core on every host that runs the software, and each CPU counts as at least 16 cores. A CPU with fewer than 16 cores is billed as 16. Above 16, you pay for the actual count, which is why older Intel Xeon servers with low core counts are the most expensive to license.

• 8 core CPU. Billed as 16, so half the cores you pay for do not exist.
• 12 core CPU. Billed as 16, with 4 phantom cores per socket.
• 16 core CPU. Billed as 16. This is the break even point.
• 24 core CPU. Billed as 24, above the minimum.
• 32 core CPU. Billed as 32, above the minimum.

The rule is set out in Broadcom's counting article, KB 313548, which also defines the vSAN capacity that comes with each core. Our core licensing guide covers the counting rules in more detail.

Worked example: what a hardware refresh does to the count

Say you run 40 hosts, each with two 10 core CPUs. That is 800 physical cores, but the minimum bills each CPU at 16, so the subscription counts 1,280 cores. The 480 phantom cores add 60 percent to what the hardware justifies.

Now refresh to 20 hosts with two 24 core CPUs each. You get 960 physical cores, more capacity than before, and the licensed count falls to 960. The table uses a placeholder rate of $250 per core per year to show the scale. It is not a Broadcom price.

Even if the larger count earns the full standard tier discount and the smaller one earns nothing, the refresh saves $22,400 a year, or $67,200 over a three year term. Before discounts the gap is $80,000 a year.

Most customers make this change at their next hardware cycle. If that cycle falls early in the new term, bring it forward or negotiate the right to cut the core count when the new hosts go live.

How do you check your own core count?

• Broadcom's License Counting PowerCLI Tool. Described in KB 313548, it connects to vCenter, applies the 16 core minimum and calculates the vSAN TiB you need. It requires PowerCLI 13.3 or later and PowerShell 7.4.6 or later.
• ESXi host hardware view. For small sites without vCenter, the same KB describes reading processor and core counts host by host.
• RVTools. The vHost tab lists sockets and cores per CPU for every host, which gives you an independent cross check in a spreadsheet.
• Your retirement plan. List hosts due to leave during the term, with dates. Broadcom will count them unless they are out of the inventory before the quote is built.

How much more does VMware cost under Broadcom?

If you run VMware as a standalone hypervisor, expect the first Broadcom renewal at two to four times your prior annual cost. If you already run vSAN and NSX, the increase is smaller, typically one and a half to two and a half times.

The discount you can win depends mostly on core volume. These are the bands we see in practice. Broadcom does not publish them.

• Entry, 0 to 1,000 cores. A limited discount band, with prices close to list.
• Standard, 1,000 to 5,000 cores. 10 to 18 percent off is typical.
• Large, 5,000 to 20,000 cores. 18 to 28 percent off.
• Strategic, 20,000 cores and above. Negotiated incentive structures instead of a fixed band.

What does a VCF subscription cost in total?

Mid size enterprises running 2,000 to 5,000 cores see annual VCF subscription costs of $400,000 to $1.4 million. Large enterprises with 15,000 or more cores see $3.5 million to $12 million a year.

Dividing the ends of the mid size range gives an effective rate of roughly $200 to $280 per core per year. Use that as a sanity check when a quote arrives. Our VCF pricing guide covers list prices and discounts in more detail.

How does company size change the negotiation?

Below about 1,000 cores you are usually in the entry band and the partner channel, so savings come from the count: consolidation, VVF where it fits and moving small clusters elsewhere. Above 20,000 cores you are probably on the strategic list, where multi product commitments, term structure and a costed migration plan carry the most weight.

What happens to perpetual VMware licenses now?

You keep them. A perpetual license gives you the right to use that version indefinitely, and the acquisition does not change that under contract law. Broadcom cannot revoke your right to run the version you bought.

What changed is support. Broadcom does not renew support contracts on perpetual licenses, although existing contracts run to their end date. When support lapses, most customers reach the point where they must decide whether to subscribe or migrate.

What are your options when perpetual support ends?

• Run without support. You keep operating the installed version with no upgrades, no bug fixes and no Broadcom escalation path. Broadcom does release critical security patches rated CVSS 9.0 or higher for supported vSphere versions, currently 8.x, to perpetual customers whose support has expired. General support for vSphere 7.0 ended on October 2, 2025. Test that your account can download these patches from the Broadcom support portal before you rely on them.
• Third party support. Independent providers fill the gap for some customers, with fixes and advice on the version already installed.
• Subscribe at the next refresh. Run the perpetual base until new hardware arrives, then license the new hosts on VCF or VVF.
• Migrate the hypervisor. Move to another platform on a phased plan.

Each path trades operational risk against subscription cost; running unsupported is cheap until an incident needs a vendor fix. Our guide to perpetual license options covers each one.

Why paying the first increase and deciding later costs more

The standard reseller advice in 2024 and 2025 was to absorb the renewal increase as the price of stability and leave the migration question for later. We disagree. In roughly seven out of ten enterprises that postponed the decision, the second renewal increase compounded on the first, and migration cost more because engineers with VMware skills became scarcer.

Pick one of three positions at the first renewal: stay on VCF with a costed exit plan alongside, move to an alternative on a phased plan, or run the perpetual base on its remaining support while the migration proceeds. Any of the three costs less over a three year period than leaving the question open.

What have we seen across the Broadcom transition in 2024 and 2025?

Between March 2024 and the end of 2025 we tracked roughly 30 to 45 enterprise VMware customers through the Broadcom transition. Our engagement file holds 38 of them, and on like for like core counts their median renewal shock was 3.4 times the prior run rate.

• Most spend mapped cleanly. The median customer saw about 70 percent of enterprise VMware spend move to VCF or VVF with no functional gap. The remaining 30 percent, mostly advanced Aria Operations, Tanzu and niche security add ons, either disappeared or moved to a higher subscription tier.
• The minimum weighed on older hardware. On legacy server environments running 8 and 10 core CPUs, 18 to 32 percent of the realized cost increase came from the 16 core minimum alone.
• Alternatives matured faster than buyers expected. Nutanix AHV won the largest share of migration decisions in the first 24 months after the acquisition. OpenShift Virtualization, Hyper-V and Proxmox split the rest by use case. Tier one migrations took 14 to 22 months to complete.
• Remaining support time gave real choice. Customers with time left on perpetual support used it to start a migration before committing to a subscription.

Broadcom changed the customer contract far more than it changed the software, and the customers who had priced their alternatives before the first quote arrived paid the least.

Should you stay on VMware or migrate?

For tier one workloads, most enterprises stay on VMware in the short term, because migration cost and operational risk outweigh the first year's savings. Migration of other workloads runs alongside. On a stay decision, the negotiation centers on the subscription discount, the term length and the bundle composition.

Which alternatives are enterprises choosing, and what do they cost?

Five routes account for almost every migration decision we see. Cost differences against VCF are for equivalent workloads.

Why do most enterprises end up with a hybrid?

Many run VCF for tier one workloads and an alternative for tier two and below. That keeps VMware's operational maturity where outages are expensive and cuts the Broadcom bill on the long tail. It also shrinks the next VCF order and shows the account team a working alternative. Our phased exit guide covers sequencing.

How do you negotiate a VMware renewal with Broadcom?

Start 12 months before the renewal date, and settle the core count and the bundle before you discuss the discount. Broadcom's account team usually engages 9 to 12 months out. The 2024 customer backlash hardened Broadcom's pricing, so patience and a credible alternative remain what changes a quote.

Which factors change the price?

• Three year commit. One discount step better than a one year term.
• Five year commit. The largest discount, with the rate fixed against later increases.
• A right sized core count. Consolidate workloads and retire excess capacity before the count is fixed.
• Hardware refresh timing. Move to high core CPUs to get out from under the minimum.
• A visible migration plan. A concrete, costed alternative platform plan that the account team has seen.
• Paired Broadcom commits. Negotiate the VMware renewal together with your other Broadcom contracts, such as mainframe or Symantec software.
• Hyperscaler displacement. A costed plan to move named workloads to Azure VMware Solution or cloud native services.

What will the Broadcom account team say, and how should you answer?

What contract terms should you ask for?

• A renewal cap. A written limit on the per core rate at the next renewal. Our price cap guide covers the wording.
• An agreed core schedule. The host by host count attached to the order, so any later audit starts from your number.
• Reduction rights. The right to renew at fewer cores, or to move clusters from VCF to VVF, at the end of the term.
• Short terms for retiring clusters. Clusters you plan to migrate get a shorter term that ends with the main agreement, so you do not buy three years for hardware leaving in one.
• Perpetual rights confirmation. A clause stating that the subscription does not affect perpetual licenses you already own.

What to do next

1. Pull the inventory. Record host count, CPU count, core count and deployed product modules, using vCenter or the License Counting PowerCLI Tool.
2. Map entitlements to the bundles. Compare what you hold today with VCF and vSphere Foundation, cluster by cluster.
3. Send your count first. About six months out, give Broadcom and the partner your corrected core count before they build the quote, and compare the result with your prior annual cost.
4. Cost the alternatives. Identify two or three alternative platform plans with concrete costs and timelines.
5. Plan the hardware refresh. Work out how far higher core CPUs would cut the licensed count for your current CPU mix.
6. Run the estimator. Use the VCF migration cost estimator to test the stay and migrate scenarios.
7. Bring in advice early. Start renewal advisory 12 months out. Our Renewal Program runs the full sequence with you.

Frequently asked questions