Why are VMware customers reconsidering their options?

With VMware licensing costs under scrutiny, many enterprises are facing a decision that goes beyond their next renewal: should they continue with their existing VMware environment, seek better commercial terms or begin evaluating alternatives?

Recent research suggests that this question is becoming increasingly relevant. A 2026 survey commissioned by Rimini Street and conducted with Unisphere Research found that 90% of respondents at VMware customer organizations were considering alternatives, with cost savings a leading consideration.

That does not mean 90% of VMware customers intend to leave. Considering alternatives is different from committing to migration, particularly when organizations have significant investments in existing infrastructure, applications and operational expertise

For enterprise buyers, the immediate challenge is understanding the financial and contractual implications of their options before committing to a new licensing arrangement or a potentially costly change in infrastructure.

What has changed with VMware licensing under Broadcom?

Since Broadcom acquired VMware in 2023, the licensing and commercial landscape has changed substantially.

One of the most significant developments has been that VMware ended availability of new perpetual licences and moved new sales to subscription-based offerings. Broadcom has also consolidated VMware’s product portfolio, placing greater emphasis on VMware Cloud Foundation (VCF) and VMware vSphere Foundation (VVF).

These changes affect how organizations purchase and manage VMware software, although the precise impact depends on their existing products, entitlements, agreements and infrastructure.

For VCF and VVF, subscription capacity is calculated using physical CPU cores across all ESXi hosts the organisation intends to license, subject to a minimum of 16 cores per physical CPU. This means organizations need to understand their hardware configurations as well as their software requirements when assessing licensing costs.

VMware Cloud Foundation 9.0 and vSphere Foundation 9.0 also introduced subscription-based license files and centralized licensing management, replacing traditional 25-character license keys for those versions.

The commercial implications extend beyond the subscription price. Product packaging included capabilities, licensing quantities, support arrangements and contractual terms can all influence the overall cost of maintaining a VMware environment.

The key question is therefore not simply how much a renewal costs, but what an organization is paying for, what it actually needs and whether its existing arrangements remain commercially appropriate.

Option 1: Renew VMware, but first understand what you need

Renewal may remain a practical choice for organizations that depend heavily on VMware and have no immediate business case for changing platforms.

However, renewing an existing environment should not automatically mean accepting the same configuration, quantities or commercial assumptions.

Before assessing a renewal proposal, organizations should establish an accurate picture of their VMware estate.

This includes identifying

• the products deployed
• the physical infrastructure supporting them
• current entitlements
• subscription requirements
• any relevant support or contractual commitments.

It is also important to understand which capabilities are being used and whether the proposed subscription offering aligns with those requirements.

For example, an organization may need to assess whether its licensed host capacity accurately reflects its infrastructure and whether the features included in a proposed package deliver value for its intended use.

This provides a more reliable basis for evaluating renewal costs and identifying areas that warrant further investigation.

Option 2: Renegotiate with a clearer commercial position

For organizations planning to remain with VMware, the next consideration is whether the proposed commercial terms are appropriate.

Licensing changes can alter the basis on which previous agreements were negotiated. Historical pricing, discount structures and purchasing assumptions may no longer provide a reliable benchmark.

A meaningful commercial review should therefore examine more than the headline renewal price.

Relevant considerations include:

• Subscription scope and quantities: Whether the proposed licensing accurately reflects the environment and intended requirements.
• Product packaging: Whether the included capabilities align with what the organization needs and uses.
• Contract duration and renewal provisions: How the proposed commitments affect future flexibility and cost.
• Support arrangements: What support is included, what remains available under existing agreements and whether alternative support arrangements are contractually and operationally viable.
• Future infrastructure plans: Whether anticipated changes to hardware, capacity or workloads could affect licensing requirements during the agreement.

These considerations do not guarantee that a customer can secure different terms or reduce costs. Commercial flexibility will depend on the applicable agreement, vendor policies and the circumstances of the transaction.

However, establishing a validated licensing position and clearly defined requirements can help organizations assess proposals and enter commercial discussions with a stronger understanding of their needs.

Option 3: Consider migration, but assess the full cost of change

Rising VMware licensing costs have prompted some organizations to explore alternative virtualization platforms, cloud services and mixed infrastructure strategies.

Potential approaches include moving selected workloads to another hypervisor, adopting a multi-platform environment or changing how particular applications are hosted.

However, replacing VMware is not necessarily a straightforward cost-saving exercise as a lower software subscription price does not automatically translate into a lower overall cost.

Organizations may need to account for migration planning, application compatibility, infrastructure changes, staff training, ongoing support and the operational complexity of managing multiple platforms.

There may also be contractual considerations, including existing VMware commitments, subscription expiry dates and licensing requirements for software running on the underlying infrastructure.

All these factors can materially affect the financial case for migration.

A commercially informed assessment should therefore compare the cost of remaining on VMware with the full cost and implications of changing platforms over an appropriate planning period.

ITAA’s role in such an assessment would be focused on software licensing, contractual and commercial considerations, alongside technical assessments undertaken by the organization’s infrastructure specialists or implementation partners.

Is a mixed approach worth considering?

The decision does not necessarily have to be between renewing everything and migrating everything.

Some enterprises may find it appropriate to retain VMware for particular workloads while evaluating alternatives for others.

A mixed approach could allow organizations to reconsider their VMware footprint over time rather than committing to a complete migration.

However, running multiple platforms introduces its own considerations, including support, operational management, licensing and infrastructure costs.

Reducing the number of workloads running on VMware also does not automatically produce a proportional reduction in VMware licensing requirements. The commercial outcome depends on the infrastructure being licensed, the applicable licensing metrics and the terms of the relevant agreements.

Organizations should therefore validate the financial implications of any proposed reduction before assuming that a smaller VMware footprint will deliver equivalent savings.

 What should enterprises establish before deciding?

Whether an organization intends to renew, renegotiate or evaluate migration, several questions can help clarify its commercial position:

1. What VMware products and subscriptions do we currently hold, and what are we actually using?
2. How are our licensing requirements calculated, and do we have reliable infrastructure and entitlement data?
3. What has changed between our existing arrangements and the proposed renewal?
4. What contractual commitments or restrictions could affect our options?
5. What would the full financial impact be of remaining on VMware, reducing our footprint or moving selected workloads elsewhere?
6. Which decisions require licensing and commercial advice, and which require separate technical evaluation?

The answers provide a foundation for comparing options rather than responding to licensing cost increases in isolation.

How can independent VMware licensing advice help?

Broadcom’s changes have made it particularly important for enterprises to understand the relationship between their VMware infrastructure, software entitlements and commercial commitments.

Independent licensing and commercial advice can help organizations establish a clearer view of their existing position, evaluate proposed arrangements and identify the financial and contractual considerations associated with different options.

For organizations approaching renewal, this may involve examining licensing quantities, product requirements, agreement terms and the commercial implications of potential changes to their VMware estate.

For those considering alternatives, independent advice can support the licensing and contractual aspects of a wider business case, without replacing the technical evaluation required to select and implement another platform.

The objective is not to assume that renewing or migrating is the right answer. It is to make that decision with a clear understanding of the costs, commitments and risks involved.

ITAA provides independent software licensing advisory and commercial support to help enterprises assess their options and make informed decisions.

Find out more about how we can help you navigate your next steps with VMware.