VMware: Companies will have to license 72 instead of 16 cores in future

Broadcom, the new owner of VMware, is continuing its restructuring. From April 10, 2025, an important change in the licensing model will come into force: the minimum number of cores ordered will increase from 16 to 72, both for new licenses and for renewals. This adjustment follows the abolition of perpetual licenses in spring 2024.

The new regulations affect customers worldwide. For example, if a company requires a single-core server with 16 cores, it will have to license 72 cores in future – 56 cores more than it actually needs. A customer with five dual-processor servers with 16 cores each (i.e. a total of 160 cores) can continue to license 160 cores. If different vSphere versions are required, the minimum number must be purchased separately for each version. However, as can be seen from the Reseller Pricebook, this regulation only applies to the minimum order quantity. At core level, a minimum number of 16 cores still applies. This means that additional purchases of smaller quantities, which have often been common in the past, are no longer possible.

In addition, Broadcom is reintroducing penalties for existing customers who have not renewed their subscriptions on the anniversary date. The penalty amounts to 20 percent of the price for the first license year. These so-called reinstatement fees were originally suspended with the Broadcom takeover. Screenshots of Broadcom's announcements are available to iX on a confidential basis. Arrow had previously reported the move to the specialist service The Register.

Significantly pricier for SMEs

The latest changes are part of the restructuring that Broadcom has been carrying out since the takeover. Affected companies are therefore once again faced with a difficult decision: Do they accept the higher costs and license unused cores – which may hardly be economically viable, especially for SMEs – or do they switch to alternative solutions? The latter could once again fuel demand for alternative providers such as Nutanix with its hypervisor AHV, Red Hat with OpenShift Virtualization or the open source platform Proxmox.

It is also bringing other, previously little-known providers onto the scene. For example, the Chinese technology group Sangfor Technologies is pushing ahead with the market entry of its virtualization platform Sangfor HCI in Germany, as is the British provider StorMagic with its product SvHCI. Both providers claim to be significantly cheaper. At the same time, Broadcom is deliberately pushing customers to migrate to the more comprehensive (and more expensive) VMware Cloud Foundation (VCF), a move that may be particularly attractive for large companies with hybrid cloud strategies.

(mki)