Insights • 4 minutes read

What does VMware changing its licensing model mean for you?

Interactive provides expert guidance and assessments, so you can address these changes with confidence.

Director of Enterprise Sales

March 4, 2024

As you will be aware Broadcom’s acquisition of VMware has led to significant changes, including the recently announced transition to subscription-based licensing, eliminating perpetual license sales and shifting their focus to subscription models. According to Broadcom, “this strategic shift aims to streamline VMware’s product portfolio, drive revenue growth, and enhance customer success through continuous innovation and simplified offerings”.

However, you are no doubt wondering what these changes mean for your organisation, in particular your licensing strategy, and what your next steps should be.

What you need to know

Here are the key takeaways from Broadcom’s recent announcements.

An end to perpetual license sales: VMware has announced that it will no longer sell perpetual licenses. All offerings will continue to be available as subscriptions going forward. Additionally, the sale of Support and Subscription (SnS) renewals for perpetual offerings have been discontinued.
VMware offerings will only be available as subscriptions: From 1 April 2024, this will be based on the per core licensing model.
End of Hybrid Purchase Program/Subscription Purchase Program (HPP/SPP) credits: Any customers (typically larger enterprises) who are on these programs will begin to transition to the new subscription model (effective dates will vary).
Simplification of product portfolio – all offerings priced per core. Going forward VMware will have two primary offerings:

- VMware Cloud Foundation, an enterprise-class hybrid cloud solution for customers to run their business critical and modern applications.
- The new VMware vSphere Foundation a simplified enterprise-grade workload platform for mid-sized to smaller customers.

The full list of products can be found here: VMware End Of Availability of Perpetual Licensing and SaaS Services – VMware Cloud Foundation (VCF) Blog

Broadcom terminating some partner agreements: In an announcement earlier this year, Broadcom advised it plans to create new agreements with partners moving forward. This move suggests a significant reconfiguration of alliances and distribution channels, potentially changing the dynamics of how VMware products are sold and supported.

What does this mean for you?

The changes in VMware’s licensing and subscription model could lead to substantial financial and operational impacts for many organisations. It could mean a significant increase in infrastructure costs – with estimates projecting an increase of 100% or more in some instances.

Customers may also experience shifts in vendor relationships and service delivery, as Broadcom establishes new partnerships and channels, impacting their procurement processes and support experiences.

That’s why it’s crucial to understand the impact of these changes on your business now, so you can plan accordingly, and manage your budget effectively. This is especially the case for customers with contracts coming up for renewal.

How do you navigate this change?

As a trusted technology partner for over 2,500 customers and a VMware partner for 15 years, we recommend that existing customers undertake a thorough assessment of their current VMWare usage and contracts – noting when they are due to expire. You may also need to think about your future requirements and consider server virtualisation’s role in your modernisation plans.

No matter what stage your IT modernisation is at, whether you are considering staying or switching, Interactive can help ensure you have a smooth transition. With our public cloud and infrastructure expertise, cost optimisation and driving the most value from your VMware investment is at the forefront of our services.

Interactive VMware Licensing and Optimisation Assessment

Navigating this licensing change can seem challenging, but don’t let it disrupt your modernisation plans. Interactive’s experts can assist with a thorough assessment of your current VMware licensing arrangements and provide recommendations on either server consolidation and optimisation or procuring new licenses. You will also be able to take advantage of our partner pricing.

Create the best transition plan for your organisation with our:

- Comprehensive licensing assessment, ensuring you get the most out of your VMware investment, while also aiming to mitigate costs.
- Optimisation assessment, evaluating all your hosting options, keeping in mind your organisations infrastructure and modernisation goals.
- Tailored consulting services, from our team of experts (holding 52 current and active VMware certifications), who can give you the right advice, matched to your business objectives.
- Dedicated support services, offered by our team of highly skilled professionals, ensuring timely assistance, and the resolution of any issues you may encounter with expertise and care.