Navigating Broadcom’s VMware Price Increases:
Why It’s Time for Companies to Consider Hyperconvergence
The IT landscape for small and mid-sized businesses is rapidly changing, and not always for the better. Broadcom’s recent overhaul of VMware’s licensing model has raised significant concerns among small businesses operating with fewer than 72 CPU cores. If your business relies on VMware for virtualization, it’s time to take a hard look at your costs and consider more efficient alternatives; especially hyperconverged infrastructure (HCI).
The Problem: A New Pricing Reality for VMware Users
72 Core Minimum
In early 2025, Broadcom announced that the minimum core purchase requirement for VMware licenses would increase from 16 to 72 cores. This change means that small businesses with modest server infrastructures will have to pay for more cores than they use, leading to substantial cost increases. For many small businesses, this increase bumps their renewals from roughly $2,000 to $10,000.
Continued Challenges for Small Businesses
Small businesses will face other challenges due to other changes in VMware’s licensing model:
- Subscription-Only Licensing: Broadcom has transitioned VMware’s licensing from perpetual to subscription-only models, eliminating the option for one-time purchases.
- Bundled Offerings: The consolidation of VMware’s product offerings into bundled solutions may force small businesses to pay for services they do not need, further escalating costs.
- Late Renewal Penalties: Broadcom has introduced a 20% penalty for customers who do not renew their subscription licenses by the anniversary date, adding financial pressure on small businesses. Some customers are receiving “cease and desist” notices from Broadcom.
For many companies, this creates a perfect storm of higher costs, less flexibility, and more complexity—a combination that’s driving many to reevaluate their entire virtualization strategy.
The Solution: Hyperconvergence as a Smarter Alternative
If you’re facing a VMware-related budget crunch, now is the perfect time to consider hyperconverged infrastructure (HCI) as a more scalable, cost-effective alternative, such as Scale Computing.
What is Hyperconvergence?
Hyperconvergence combines compute, storage, networking, and virtualization into a single, software-defined platform. Instead of managing separate components, HCI provides a unified solution that’s easier to scale, deploy, and support—especially for small IT teams.
Key Benefits of Switching to HCI:
- Lower Total Cost of Ownership: You pay for what you actually use and eliminate expensive hardware and software silos.
- Simplified Management: HCI platforms are built with centralized management interfaces, so your team can manage infrastructure more efficiently.
- Improved Scalability: Easily add capacity as you grow—without overbuying today.
- Enhanced Resilience: Built-in redundancy and failover mean less downtime and fewer disruptions.
- Vendor Flexibility: Many HCI solutions are VMware-compatible but don’t require you to stay tied to Broadcom’s pricing model.
Popular HCI platforms like Scale Computing are rapidly gaining traction among companies, offering robust virtualization features without the VMware pricing baggage.
Hyperconverged infrastructure can often be deployed for less than you’re paying in licensing and support costs alone, with better long-term ROI.
Final Thoughts: Don’t Get Locked In—Explore Your Options Now
VMware’s new pricing structure is a clear signal that change is here, and likely not in the SMB’s favor. Instead of scrambling to meet new minimums, take this opportunity to modernize your infrastructure with a solution that aligns with your actual needs and budget.
We’re helping companies across industries assess their current environments and explore VMware exit strategies that include hyperconverged infrastructure and cloud-first models. To learn more about how to combat the rising VMware costs please do not hesitate to contact us HERE.