The price rise is the strategy, not a transition effect
Broadcom closed the VMware acquisition on November 22, 2023 at roughly $69 billion including debt, and nineteen days later ended the sale of perpetual licenses and support renewals outright, collapsing thousands of SKUs into the VCF and VVF subscriptions. The shift was financial, not technical: perpetual customers paid support of roughly 20 percent of the original license fee per year, and a subscription rebases the same estate at full price, every year, on a per core meter.
Prepared by Redress Compliance · August 8, 2026 · Broadcom advisory. Based on 25 to 35 VMware renewals benchmarked 2024 to 2025.
Executive summary
The model is working, publicly, which means it continues.
Broadcom's fiscal 2025 results report infrastructure software revenue of $27.0 billion, up 26 percent year over year, with the VMware conversion doing most of the work against VMware's last standalone year of about $13.4 billion, and this is the third run of a proven playbook.
CA Technologies in 2018 and Symantec's enterprise business in 2019: concentrate on the largest accounts, cut go to market cost, and raise unit economics through bundling. Waiting for the pricing to soften is not a plan, because the pricing is the plan.
The renewal impact ran 2 to 5 times, and the bundle is the mechanism.
Renewal quotes landed 2 to 5 times above the prior perpetual support cost across our benchmarks, and the heart of the increase is scope rather than rate: the VCF bundle packages compute, storage, networking, and management into one subscription.
And it included products 30 to 50 percent of customers did not use.
You pay for the full bundle, not the modules you run, which is why right sizing cores and trimming the bundle recovered 15 to 35 percent of the quote, the two levers still in the buyer's control.
The core counting rules do quiet damage on both ends of the hardware curve.
Every physical core on every covered host licenses, with a floor of 16 cores per CPU, so a two socket host on 8 core processors licenses as 32 cores, double its physical count, while dense modern chips multiply the bill upward.
The storage entitlement rides the same meter, VCF including 1 TiB of vSAN capacity per licensed core against VVF's smaller allowance, so heavy vSAN estates model raw TiB before picking a tier, because the storage line can flip the edition comparison, and the smaller editions.
VSphere Standard and Foundation, still exist for estates that need core virtualization without the stack.
The terms move in both directions, so nothing is final until it is in your order form.
The sequence since November 2023 changed every few months: the free ESXi tier died and returned with 8.0 Update 3e, the 72 core order minimum circulated through the channel and was walked back under pushback.
Cease and desist letters reached expired estates while vSphere 9 shipped subscription only inside VCF 9.0. Most restrictive changes arrived through channel and portal communications rather than contract paper.
And at least one reversed under customer pressure: treat reported policy as negotiable until it appears in your order form, and treat any quote older than a quarter as stale.
The sequence since the close, in order
| When | The change | The buyer side consequence |
|---|---|---|
| Nov 2023 | The acquisition closes at roughly $69 billion | Existing support contracts run to term but will not renew |
| Dec 2023 | Perpetual licenses and support renewals reach end of sale | Every future purchase is a term subscription per core |
| Early 2024 | End of availability; free ESXi discontinued; partner program goes invitation only | Entitlements freeze; smaller buyers lose resellers |
| 2025 | The 72 core minimum circulates then walks back; free ESXi returns; cease and desist letters reach expired estates | Pushback works on terms; compliance pressure rises |
| Jun 2025 | VCF 9.0 ships; vSphere 9 exists only inside VCF and VVF | Perpetual 8.x owners have no path to 9 without converting |
| Dec 2025 | Fiscal 2025 shows infrastructure software at $27.0 billion, up 26 percent | The model works, so expect it to continue |
Two lessons fall out of the sequence. Most restrictive changes arrived through channel or portal communications rather than contract amendments, and at least one reversed under customer pressure, which makes reported policy negotiable until your order form contains it.
The other lesson is velocity: terms changed every few months in both directions, so the renewal plan has to survive the next change rather than the last one, and a quote older than a quarter is stale by construction.
The economics, why nineteen days was enough
- The conversion arithmetic: perpetual customers paid roughly 20 percent of the original license fee in annual support; the subscription rebases the same estate at full price, every year, per core.
- The bundle multiplier: thousands of SKUs collapsed into VCF and VVF, so customers buy the platform even when they run part of it, the 30 to 50 percent unused share.
- The core meter: every physical core with a 16 core per CPU floor, doubling low core hosts and multiplying dense ones.
- The precedent: the same playbook ran at CA in 2018 and Symantec in 2019, concentrated on large accounts with raised unit economics, and both times it stuck.
- The public proof: $27.0 billion of infrastructure software revenue, up 26 percent, against VMware's standalone $13.4 billion.
The Broadcom VMware negotiation playbook
The renewal levers, the bundle challenge, the core right sizing method, and the credible walkaway worked on a representative estate.
Get the white paper →The moves still in your control
The cost drivers you still control are the core count and the bundle scope: right size the cores by mapping the estate against the 16 core floor and the density curve, since hardware refresh decisions now carry licensing consequences they never had under socket pricing.
Challenge the bundle by mapping deployed components against the VCF contents and pricing VVF or the smaller vSphere editions where the stack is not used, because the 30 to 50 percent unused share is the negotiation.
Model the vSAN entitlement, 1 TiB per core on VCF, against raw deployed TiB before picking a tier; and hold the credible alternatives current, since they moved quotes further than any discount argument.
The four option portfolio for perpetual holders, run frozen, third party support, convert, or migrate, runs in the perpetual options guide, the platform comparison in the Hyper-V analysis, and the bundle anatomy in the VCF components guide.
- Percentile standing for your exact deal size and industry, from real closed transactions
- Scenario simulation before the call: test alternative terms and see the financial impact of each
- A negotiation playbook, talking points, and a two page executive brief on day one
What we saw across renewals, 2024 to 2025
Across roughly 25 to 35 VMware renewals Morten Andersen benchmarked between 2024 and 2025, the move to subscription and the VCF bundle drove every increase:
Quotes against the prior perpetual support cost, driven by the rebase and the bundle.
Of the quote, from right sizing cores and trimming the bundle to deployed components.
The strategic read matters more than any single quote: this is a financial conversion executed by a company that has run it twice before and published the results, which means the buyer's plan cannot be waiting, and the leverage is structural rather than relational, the core count mapped.
The bundle challenged, the alternatives priced, and the terms held until they appear in the order form.
The estates that treated the first quote as an opening position recovered 15 to 35 percent; the estates that treated it as the new price paid it, and then paid the uplift on it at the next anniversary.
Your first five moves
- Map every host against the 16 core floor, because low core hosts license at double and dense hosts multiply.
- Challenge the bundle with a deployed component map, the 30 to 50 percent unused share that is the negotiation.
- Model vSAN TiB against the per core entitlement before picking VCF or VVF, since storage can flip the comparison.
- Hold reported policy as negotiable until it is in your order form, and refresh quotes quarterly.
- Price the alternatives seriously, the walkaway that moves quotes more than discounts. The Broadcom practice runs the renewal with you.
Frequently asked questions
Why did Broadcom end perpetual VMware licenses?
To convert a one time purchase base into recurring subscription revenue: perpetual customers paid support of roughly 20 percent of the original license fee annually, and a subscription rebases the same estate at full price every year on a per core meter.
The close was November 22, 2023 at roughly $69 billion, and perpetual sales ended nineteen days later, the same playbook Broadcom ran at CA in 2018 and Symantec in 2019.
How much have VMware costs risen under Broadcom?
Renewal quotes landed 2 to 5 times above the prior perpetual support cost across our benchmarks, driven by the subscription rebase and the VCF bundle, which included products 30 to 50 percent of customers did not use.
Right sizing cores and trimming the bundle recovered 15 to 35 percent of the quote, the two levers still in the buyer's control.
How does VMware per core licensing work?
Every physical core on every covered host licenses, with a floor of 16 cores per CPU, so a two socket host on 8 core processors licenses as 32 cores, double its physical count.
The storage entitlement rides the meter too, VCF including 1 TiB of vSAN per licensed core against VVF's smaller allowance, so heavy vSAN estates model raw TiB before choosing a tier.
Is the VMware price increase temporary?
No: the price rise is the strategy, not a transition effect. Broadcom's fiscal 2025 infrastructure software revenue of $27.0 billion, up 26 percent against VMware's standalone $13.4 billion, shows the model working, and it is the third run of a proven playbook.
Waiting for softening is not a plan; the leverage is core right sizing, bundle challenge, and credible alternatives.
Do smaller VMware editions still exist?
Yes: vSphere Standard and vSphere Foundation remain available for estates needing core virtualization without the full stack, and mapping deployment against edition contents before accepting a VCF quote is exactly the exercise the bundle pricing discourages.
The free ESXi tier also returned with 8.0 Update 3e after being discontinued, one of several terms that moved under customer pressure.
Are Broadcom's licensing policy changes final?
Treat them as negotiable until they appear in your order form: most restrictive changes arrived through channel and portal communications rather than contract amendments, and the reported 72 core order minimum was walked back under pushback.
Terms have moved in both directions every few months since the close, which also means any quote older than a quarter is stale.
