Broadcom seemed okay with ending business with Ingram, which ties it to solution providers that may be supporting smaller firms. At the same time, Broadcom has shown willingness to fight for the business of large accounts.
For example, this month it settled an increasingly nasty dispute in which AT&T sued Broadcom for allegedly breaking a contract to provide perpetual license support. Broadcom infamously stopped VMware perpetual license sales, in favor of subscriptions, in December 2023.
Broadcom is also paying close attention to VMware’s biggest accounts, taking over 500 of those biggest accounts directly, thereby barring channel partners from deals.
Broadcom originally planned to take VMware’s biggest 2,000 accounts direct. But as Canalys chief analyst Alastair Edwards put it, letting 1,500 of the biggest accounts be run by channel partners helps tie professional services to VMware products, making migrations harder.
However, the VMware channel is under turmoil, having undergone numerous business-impacting changes over the past year, including Broadcom killing the VMware partner program in favor of its own, while announcing that there will be a new VMware channel chief, as CRN reported. Some of the resellers that could help VMware keep customers are showing frustration with the changes and what the characterize as poor communication from Broadcom.
“Broadcom has abandoned the channel market by making it nearly impossible to work with them due to constantly changing requirements, packaging and changes to the program,” Jason Slagle, president of Toledo-based managed services provider and VMware partner CNWR, told CRN today.
Meanwhile, Forrester analysts Michele Pelino and Naveen Chhabra predict that next year, “VMware’s largest 2,000 customers will shrink their deployment size by an average of 40 percent,” in favor of “public cloud, on-premises alternatives, and new architecture.”
Still, “Broadcom’s price increases and cost-cutting measures are expected to boost its net profits, as there are not many credible competitors capable of helping clients replace VMware virtualization,” the Forrester analysts said.
So although Broadcom is challenged to maintain business from VMware’s biggest accounts and appease the solution providers driving smaller accounts, it’s expected to keep making money off of VMware—even as firms like Ingram close the door on it.
VMware has been the go-to virtualization platform for years, but Broadcom’s acquisition has pushed customers to reconsider their VMware dependence. A year into its VMware buy, Broadcom is at a critical point. By now, customers have had months to determine whether they’ll navigate VMware’s new landscape or opt for alternatives. Beyond dissatisfaction with the new pricing and processes under Broadcom, the acquisition has also served as a wake-up call about vendor lock-in. Small- and medium-size businesses (SMBs) are having the biggest problems navigating the changes, per conversations that Ars has had with VMware customers and analysts.
Speaking to The Register, Edwards claimed that migration from VMware is still modest. However, the coming months are set to be decision time for some clients. In a June and July survey that Veeam, which provides hypervisor backup solutions, sponsored, 56 percent of organizations were expecting to “decrease” VMware usage by July 2025. The survey examined 561 “senior decisionmakers employed in IT operations and IT security roles” in companies with over 1,000 employees in the US, France, Germany, and the UK.
Impact on migrations questioned
With the pain points seemingly affecting SMBs more than bigger clients, Broadcom’s latest move may do little to deter the majority of customers from considering ditching VMware.
Speaking with Ars, Rick Vanover, VP of product strategy at Veeam, said he thinks Broadcom taking fewer large VMware customers direct will have an “insignificant” impact on migrations, explaining:
Generally speaking, the largest enterprises (those who would qualify for direct servicing by Broadcom) are not considering migrating off VMware.
However, channel partners can play a “huge part” in helping customers decide to stay or migrate platforms, the executive added.
“Product telemetry at Veeam shows a slight distribution of hypervisors in the market, across all segments, but not enough to tell the market that the sky is falling,” Vanover said.
In his blog, Edwards argued that Tan is demonstrating a “clear objective to strip out layers of cost and complexity in the business, and return it to strong growth and profitability.” He added: “But so far this has come at the expense of customer and partner relationships. Has VMware done enough to turn the tide?”
Perhaps more pertinent to SMBs, Broadcom last month announced a more SMB-friendly VMware subscription tier. Ultimate pricing will be a big factor in whether this tier successfully maintains SMB business. But Broadcom’s VMware still seems more focused on larger customers.
Companies have been discussing migrating off of VMware since Broadcom’s takeover a year ago led to higher costs and other controversial changes. Now we have an inside look at one of the larger customers that recently made the move.
According to a report from The Register today, Beeks Group, a cloud operator headquartered in the United Kingdom, has moved most of its 20,000-plus virtual machines (VMs) off VMware and to OpenNebula, an open source cloud and edge computing platform. Beeks Group sells virtual private servers and bare metal servers to financial service providers. It still has some VMware VMs, but “the majority” of its machines are currently on OpenNebula, The Register reported.
Beeks’ head of production management, Matthew Cretney, said that one of the reasons for Beeks’ migration was a VMware bill for “10 times the sum it previously paid for software licenses,” per The Register.
According to Beeks, OpenNebula has enabled the company to dedicate more of its 3,000 bare metal server fleet to client loads instead of to VM management, as it had to with VMware. With OpenNebula purportedly requiring less management overhead, Beeks is reporting a 200 percent increase in VM efficiency since it now has more VMs on each server.
Beeks also pointed to customers viewing VMware as non-essential and a decline in VMware support services and innovation as drivers for it migrating from VMware.
Broadcom didn’t respond to Ars Technica’s request for comment.
Broadcom loses VMware customers
Broadcom will likely continue seeing some of VMware’s older customers decrease or abandon reliance on VMware offerings. But Broadcom has emphasized the financial success it has seen (PDF) from its VMware acquisition, suggesting that it will continue with its strategy even at the risk of losing some business.
Broadcom has a new subscription tier for VMware virtualization software that may appease some disgruntled VMware customers, especially small to medium-sized businesses. The new VMware vSphere Enterprise Plus subscription tier creates a more digestible bundle that’s more appropriate for smaller customers. But it may be too late to convince some SMBs not to abandon VMware.
Soon after Broadcom bought VMware, it stopped the sale of VMware perpetual licenses and started requiring subscriptions. Broadcom also bundled VMware’s products into a smaller number of SKUs, resulting in higher costs and frustration for customers that felt like they were being forced to pay for products that they didn’t want. All that, combined with Broadcom ditching some smaller VMware channel partners (and reportedly taking the biggest clients direct), have raised doubts that Broadcom’s VMware would be a good fit for smaller customers.
“The challenge with much of the VMware by Broadcom changes to date and before the announcement [of the vSphere Enterprise Plus subscription tier] is that it also forced many organizations to a much higher offering and much more components to a stack that they were previously uninterested in deploying,” Rick Vanover, Veeam’s product strategy VP, told Ars.
On October 31, Broadcom announced the vSphere Enterprise Plus subscription tier. From smallest to largest, the available tiers are vSphere Standard, vSphere Enterprise Plus, vSphere Foundation, and the flagship VMware Cloud Foundation. The introduction of vSphere Enterprise Plus means that customers who only want vSphere virtualization can now pick from two bundles instead of one.
“[T]o round out the portfolio, for customers who are focused on compute virtualization, we will now have two options, VMware vSphere Enterprise Plus and VMware vSphere Standard,” Prashanth Shenoy, vice president of product marketing in the VMware Cloud Foundation division of Broadcom, explained in a blog post.
Broadcom quoted AT&T a 1,050 percent price hike for VMware offerings, AT&T has claimed in legal documents.
AT&T sued Broadcom on August 29, accusing Broadcom of unlawfully denying it the second of three one-year renewals for support services that AT&T thinks it’s entitled to. AT&T cites a contract signed before Broadcom bought VMware. The telecommunications firm says it has 75,000 virtual machines (VMs) across approximately 8,600 servers running on VMware. Broadcom, which has stopped selling VMware perpetual licenses, has said that AT&T missed its opportunity to renew support and that the contract between VMware and AT&T has an “End of Availability” provision allowing VMware to retire products and services.
Legal filings from September 27 and spotted by The Register today show an email [PDF] that AT&T EVP and GM of wireline transformation and global supply chain Susan A. Johnson apparently sent to Broadcom CEO Hock Tan pointing to “an impasse” over VMware.
Johnson argued in the email that AT&T should have the right to renew support through September 2026 thanks to a previously signed five-year deal:
This proposed annual increase of +1,050% in one year is extreme and certainly not how we expect strategic partners to engage in doing business with AT&T.
A 1,050 percent price hike is the largest that Ars Technica has heard of being proposed by Broadcom. At this time, it’s unknown if AT&T’s claims are accurate. Broadcom hasn’t publicly commented on the allegations.
Many VMware customers have pointed to VMware becoming more expensive under Broadcom, though. Broadcom’s changes to selling VMware have reportedly included bundling products into only about two SKUs and higher CPU core requirements. In March, customers reportedly complained about price increases of up to 600 percent, per The Register. And in February, ServeTheHome said small cloud service providers reported prices increasing tenfold.
AT&T’s contract with VMware may be one of the firm’s bigger accounts. A 1,050 percent price hike would be another level, however, even for a company the size of AT&T. Per Johnson’s email, AT&T and Broadcom have had a “strategic relationship” for over a decade.
The email reads:
… AT&T has decided to pursue a legal strategy along with a disciplined plan to invest to migrate away, all of which will quickly become public. I truly wish we had another option. Unfortunately, this decision will impact the future of our overall relationship and how we manage spend in other Broadcom areas.
AT&T on potentially migrating off VMware
In her email, Johnson points to migration costs as impacting how much AT&T is willing to pay for VMware.
According to the message, projected costs for moving AT&T off of VMware are $40 million to $50 million. AT&T is said to use VMware-based VMs for customer services operations and for operations management efficiency. Per AT&T’s email, migration “has a very quick payback” and “strong” internal rate of return, “especially given the high licensing costs proposed.”
On September 20, Broadcom requested that AT&T’s request to block Broadcom from discontinuing VMware support be denied. In legal documents [PDF], Broadcom said that AT&T is planning to ditch VMware and that AT&T could have spent “the last several months or even years” making the transition.
In an affidavit filed on September 27 [PDF], Johnson stated that her email to Tan does not suggest that migration “would be easy, quick, or inexpensive” and that “none of those would be accurate statements.”
“My point was that although it is not easy, cheap, or quick to migrate off VMware, Defendants’ high fees will incentivize us to migrate to another solution,” the affidavit reads.
Johnson also claimed that AT&T started exploring options for getting off VMware in December but thought that it had time to make decisions, since it believed it could opt to renew support for its licenses until September 2026.
In another legal filing from September 27 [PDF], Gordon Mansfield, president of global technology planning at AT&T Services, says:
AT&T currently estimates it will take a period of years to transition all of its servers currently operating with the VMware software away from VMware. Moreover, Defendants have not made it easy to do so since we understand that they are preventing some vendors from selling certain products to us.
The filing didn’t get into further detail about how exactly Broadcom could be blocking product sales to AT&T. Broadcom hasn’t publicly responded to Mansfield’s claim.
Regarding AT&T’s lawsuit, Broadcom has previously told Ars Technica that it “strongly disagrees with the allegations and is confident we will prevail in the legal process.”
Since Broadcom’s VMware acquisition, most customers are expected to have at least considered ditching VMware. However, moving can be challenging and costly as some IT environments are heavily dependent on VMware. Being able to ensure that things are able to run as expected during the transition period has also complicated potential migrations.
While AT&T and Broadcom’s legal dispute continues, Broadcom has agreed to continue providing AT&T with VMware support until October 9. A preliminary injunction hearing is scheduled for October 15.
Broadcom is accusing AT&T of trying to “rewind the clock and force” Broadcom “to sell support services for perpetual software licenses… that VMware has discontinued from its product line and to which AT&T has no contractual right to purchase.” The statement comes from legal documents Broadcom filed in response to AT&T’s lawsuit against Broadcom for refusing to renew support for its VMware perpetual licenses [PDF].
On August 29, AT&T filed a lawsuit [PDF] against Broadcom, alleging that Broadcom is breaking a contract by refusing to provide a one-year renewal for support for perpetually licensed VMware software. Broadcom famously ended perpetual VMware license sales shortly after closing its acquisition in favor of a subscription model featuring about two bundles of products rather than many SKUs.
AT&T claims its VMware contract (forged before Broadcom’s acquisition closed in November) entitles it to three one-year renewals of perpetual license support, and it’s currently trying to enact the second one. AT&T says it uses VMware products to run 75,000 virtual machines (VMs) across about 8,600 servers. The VMs are for supporting customer services operations and operations management efficiency, per AT&T. AT&T is asking the Supreme Court of the State of New York to stop Broadcom from ending VMware support services for AT&T and for “further relief” as deemed necessary.
On September 20, Broadcom filed for AT&T’s motion to be denied. Its defense includes its previously taken stance that VMware was moving toward a subscription model before Broadcom bought it. The transition from perpetual licenses to subscriptions was years in the making and, thus, something for which AT&T should have prepared, according to Broadcom. Broadcom claims that AT&T has admitted that it intends to migrate away from VMware software and that AT&T could have spent “the last several months or even years” doing so.
The filing argues: “AT&T resorts to sensationalism by accusing Broadcom of using ‘bullying tactics’ and ‘price gouging.’ Such attacks are intended to generate press and distract the Court from a much simpler story.”
Broadcom claims the simple story is that:
… the agreement contains an unambiguous “End of Availability” provision, which gives VMware the right to retire products and services at any time upon notice. What’s more, a year ago, AT&T opted not to purchase the very Support Services it now asks the Court to force VMware to provide. AT&T did so despite knowing Defendants were implementing a long planned and well-known business model transition and would soon no longer be selling the Support Services in question.
Broadcom says it has been negotiating with AT&T “for months” about a new contract, but the plaintiff “rejected every proposal despite favorable pricing.”
Broadcom’s filing also questions AT&T’s request for mandatory injunction, claiming that New York only grants those in “rare circumstances,” which allegedly don’t apply here.
AT&T has options, Broadcom says
AT&T’s lawsuit claims losing VMware support will cause extreme harm to itself and beyond. The lawsuit says that 22,000 of AT&T’s VMware VMs are used for support “of services to millions of police officers, firefighters, paramedics, emergency workers, and incident response team members nationwide… for use in connection with matters of public safety and/or national security.” It also claimed that communications for the Office of the President are at risk without VMware’s continued support.
However, Broadcom claims that AT&T has other choices, saying:
AT&T does have other options and, therefore, the most it can obtain is monetary damages. The fact that AT&T has been given more than eight-months’ notice and has in the meantime failed to take any measures to prevent its purported harm (e.g., buy a subscription for the new offerings or move to another solution) is telling and precludes any finding of irreparable harm. Even if AT&T thinks it deserves better pricing, it could have avoided its purported irreparable harm by entering in a subscription based deal and suing for monetary damages instead of injunctive relief.
AT&T previously declined to answer Ars Technica’s questions about its backup plans for supporting such important customers should it lose VMware support.
Broadcom has rubbed some customers the wrong way
Broadcom closed its VMware acquisition in November and quickly made dramatic changes. In addition to Broadcom’s reputation for overhauling companies after buying them, moves like ending perpetual licenses, taking VMware’s biggest customers directly instead of using channel partners, and raising costs by bundling products and issuing higher CPU core requirements have led customers and partners to reconsider working with the company. Migrating from VMware can be extremely challenging and expensive due to its deep integration into some IT environments, but many are investigating migration, and some expect Broadcom to face years of backlash.
As NAND Research founder and analyst Steve McDowell told TechTarget about this case:
It’s very unusual for customers to sue their vendors. I think Broadcom grossly underestimated how passionate the customer base is, [but] it’s a captive audience.
As this lawsuit demonstrates, Broadcom’s VMware has brought serious customer concerns around ongoing support. Companies like Spinnaker Support are trying to capitalize by offering third-party support services.
Martin Biggs, VP and managing director of EMEA and strategic initiatives at Spinnaker, told Ars Technica that his company provides support so customers can spend time determining their next move, whether that’s buying into a VMware subscription or moving on:
VMware customers are looking for options; the vast majority that we have spoken to don’t have a clear view yet of where they want to go, but in all cases the option of staying with VMware for the significantly increased fees is simply untenable. The challenge many have is that not paying fees means not getting support or security on their existing investment.
VMware’s support for AT&T was supposed to end on September 8, but the two companies entered an agreement to continue support until October 9. A hearing on a preliminary injunction is scheduled for October 15.
AT&T filed a lawsuit against Broadcom on August 29 accusing it of seeking to “retroactively change existing VMware contracts to match its new corporate strategy.” The lawsuit, spotted by Channel Futures, concerns claims that Broadcom is not letting AT&T renew support services for previously purchased perpetual VMware software licenses unless AT&T meets certain conditions.
AT&T uses VMware software to run 75,000 virtual machines (VMs) across about 8,600 servers, per the complaint filed at the Supreme Court of the State of New York [PDF]. It reportedly uses the VMs to support customer service operations and for operations management efficiency.
AT&T feels it should be granted a one-year renewal for VMware support services, which it claimed would be the second of three one-year renewals to which its contract entitles it. According to AT&T, support services are critical in case of software errors and for upkeep, like security patches, software upgrades, and daily maintenance. Without support, “an error or software glitch” could result in disruptive failure, AT&T said.
AT&T claims Broadcom refuses to renew support and plans to terminate AT&T’s VMware support services on September 9. It asked the court to stop Broadcom from cutting VMware support services and for “further relief” deemed necessary. The New York Supreme Court has told Broadcom to respond within 20 days of the complaint’s filing.
In a statement to Ars Technica, an AT&T spokesperson said: “We have filed this complaint to preserve continuity in the services we provide and protect the interests of our customers.”
AT&T accuses Broadcom of trying to make it spend millions on unwanted software
AT&T’s lawsuit claims that Broadcom has refused to renew support services for AT&T’s perpetual licenses unless AT&T agrees to what it deems are unfair conditions that would cost it “tens of millions more than the price of the support services alone.”
The lawsuit reads:
Specifically, Broadcom is threatening to withhold essential support services for previously purchased VMware perpetually licensed software unless AT&T capitulates to Broadcom’s demands that AT&T purchase hundreds of millions of dollars’ worth of bundled subscription software and services, which AT&T does not want.
After buying VMware, Broadcom consolidated VMware’s offering from about 8,000 SKUs to four bundles, per Channel Futures. AT&T claims these subscription offerings “would impose significant additional contractual and technological obligations.” AT&T claims it might have to invest millions to “develop its network to accommodate the new software.”
VMware and AT&T’s agreement precludes “Broadcom’s attempt to bully AT&T into paying a king’s ransom for subscriptions AT&T does not want or need, or risk widespread network outages,” AT&T reckons.
In its lawsuit, AT&T claims “bullying tactics” were expected from Broadcom post-acquisition. Quoting Ars Technica reporting, the lawsuit claims that “Broadcom wasted no time strong-arming customers into highly unfavorable subscription models marked by ‘steeply increased prices[,]’ ‘refusing to maintain security conditions for perpetual license[d] [software,]’ and threatening to cut off support for existing products already licensed by customers—exactly as it has done here.'”
“Without the Support Services, the more than 75,000 virtual machines operated by AT&T⸺impacting millions of its customers worldwide⸺would all be just an error or software glitch away from failing,” AT&T’s lawsuit says.
Broadcom’s response
In the lawsuit, Broadcom alleges that AT&T is not eligible to renew support services for a year because it believes AT&T was supposed to renew all three one-year support service plans by the end of 2023.
In a statement to Ars Technica, a Broadcom company spokesperson said:
Broadcom strongly disagrees with the allegations and is confident we will prevail in the legal process. VMware has been moving to a subscription model, the standard for the software industry, for several years – beginning before the acquisition by Broadcom. Our focus will continue to be providing our customers choice and flexibility while helping them address their most complex technology challenges.
Communications for Office of the President, first responders could be affected
AT&T’s lawsuit emphasizes that should it lose support for VMware offerings, communications for the Office of the President and first responders would be at risk. AT&T claims that about 22,000 of its 75,000 VMs relying on VMware “are used in some way to support AT&T’s provision of services to millions of police officers, firefighters, paramedics, emergency workers and incident response team members nationwide… for use in connection with matters of public safety and/or national security.”
When reached for comment, AT&T’s spokesperson declined to comment on AT&T’s backup plan for minimizing disruption should it lose VMware support in a few days.
Ultimately, the case centers on “multiple documents involved, and resolution of the dispute will require interpretation as to which clauses prevail,” Benjamin B. Kabak, a partner practicing in technology and outsourcing at the Loeb & Loeb LLP New York law firm, points out.
After acquiring VMware, Broadcom swiftly enacted widespread changes that resulted in strong public backlash. A new survey of 300 director-level IT workers at companies that are customers of North American VMware provides insight into the customer reaction to Broadcom’s overhaul.
The survey released Thursday doesn’t provide feedback from every VMware customer, but it’s the first time we’ve seen responses from IT decision-makers working for companies paying for VMware products. It echos concerns expressed at the announcement of some of Broadcom’s more controversial changes to VMware, like the end of perpetual licenses and growing costs.
CloudBolt Software commissioned Wakefield Research, a market research agency, to run the study from May 9 through May 23. The “CloudBolt Industry Insights Reality Report: VMware Acquisition Aftermath” includes responses from workers at 150 companies with fewer than 1,000 workers and 150 companies with more than 1,000 workers. Survey respondents were invited via email and took the survey online, with the report authors writing that results are subject to sampling variation of ±5.7 percentage points at a 95 percent confidence level.
Notably, Amazon Web Services (AWS) commissioned the report in partnership with CloudBolt. AWS’s partnership with VMware hit a road bump last month when Broadcom stopped allowing AWS to resell the VMware Cloud on AWS offering—a move that AWS said “disappointed it.” Kyle Campos, CloudBolt CTPO, told Ars Technica that the full extent to which AWS was involved in this report was helping underwrite the cost of research. But you can see why AWS would have interest in customer dissatisfaction with VMware.
Widespread worry
Every person surveyed said that they expect VMware prices to rise under Broadcom. In a March “User Group Town Hall,” attendees complained about “price rises of 500 and 600 percent,” according to The Register. We heard in February from ServeTheHome that “smaller” cloud service providers were claiming to see costs grow tenfold. In this week’s survey, 73 percent of respondents said they expect VMware prices to more than double. Twelve percent of respondents expect a price hike of 301 to 500 percent. Only 1 percent anticipate price hikes of 501 to 1,000 percent.
“At this juncture post-acquisition, most larger enterprises seem to have a clear understanding of how their next procurement cycle with Broadcom will be impacted from a pricing and packaging standpoint,” the report noted.
Further, 95 percent of survey respondents said they view Broadcom buying VMware as disruptive to their IT strategy, with 46 percent considering it extremely or very disruptive.
Widespread concerns about cost and IT strategy help explain why 99 percent of the 300 respondents said they are concerned about Broadcom owning VMware, with 46 percent being “very concerned” and 30 percent “extremely concerned.”
Broadcom didn’t respond to Ars’ request for comment.
Not jumping ship yet
Despite widespread anxiety over Broadcom’s VMware, most of the respondents said they will likely stay with VMware either partially (43 percent of respondents) or fully (40 percent). A smaller percentage of respondents said they would move more workloads to the public cloud (38 percent) or a different hypervisor (34 percent) or move entirely to the public cloud (33 percent). This is with 69 percent of respondents having at least one contract expiring with VMware within the next 12 months.
Many companies have already migrated easy-to-move workloads to the public cloud, CloudBolt’s Campos said in a statement. For many firms surveyed, what’s left in the data center “is a mixture of workloads requiring significant modernization or compliance bound to the data center,” including infrastructure components that have been in place for decades. Campos noted that many mission-critical workloads remain in the data center, and moving them is “daunting with unclear ROI.”
“The emotional shock has started to metabolize inside of the Broadcom customer base, but it’s metabolized in the form of strong commitment to mitigating the negative impacts of the Broadcom VMware acquisition,” Campos told Ars Technica.
Resistance to ditching VMware reflects how “embedded” VMware is within customer infrastructures, the CloudBolt exec told Ars, adding:
In many cases, the teams responsible for purchasing, implementing, and operating VMware have never even considered an alternative prior to this acquisition; it’s the only operating reality they know and they are used to buying out of this problem.
Top reasons cited for considering abandoning VMware partially or totally were uncertainty about Broadcom’s plans, concerns about support quality under Broadcom, and changes to relationships with channel partners (each named by 36 percent of respondents).
Following closely was the shift to subscription licensing (34 percent), expected price bumps (33 percent), and personal negative experiences with Broadcom (33 percent). Broadcom’s history with big buys like Symantec and CA Technologies also has 32 percent of people surveyed considering leaving VMware.
Although many firms seem to be weighing their options before potentially leaving VMware, Campos warned that Broadcom could see backlash continue “for months and even years to come,” considering the areas of concern cited in the survey and how all VMware offerings are near-equal candidates for eventual nixing.
Broadcom’s acquisition of VMware last year has led to widespread upheaval at the company, including layoffs, big changes to how it approaches software licensing, and general angst from customers and partners. Broadcom also discontinued the free-to-use version of VMware’s vSphere Hypervisor, also known as ESXi, earlier this year, forcing home users to find alternatives.
Fusion Pro and Workstation Pro certainly aren’t the only free-to-use virtualization products—VirtualBox has existed for years, and there are many indie projects that make use of Apple’s virtualization frameworks for macOS. But VMware’s products are a bit more polished and easier to learn than some of those alternatives, and VMware’s file formats are also commonly used when redistributing virtual machines for retrocomputing purposes.
Today’s announcement may be less welcome for businesses that prefer perpetually licensed versions of Fusion Pro or Workstation Pro. VMware is phasing these licenses out, offering support for current perpetually licensed products until “their existing End of Life and End of General Support dates” but shifting to a subscription-only model for future updates.
VMware is framing this as a “simplification” that “eliminates 40+ other SKUs,” and while this may be true, it’s also likely just a side effect of Broadcom’s wider push to end standalone software sales in favor of a more lucrative subscription-only model. Broadcom has already stopped selling perpetual licenses for many other VMware products.
A Desktop Hypervisor app subscription will run businesses $120 per year. The only difference between the free home version and the paid business version is a “this product is licensed for personal use only” message that appears in the home version; Broadcom says that the products are functionally identical.
Since the full apps are going the free-to-use route, Broadcom is discontinuing the VMware Workstation Player and Fusion Player apps. These apps could be used to fire up pre-existing VMs but generally couldn’t create new virtual machines from scratch. Workstation Player will continue on as a component of Workstation Pro, but it will no longer be offered as a standalone product. Users of Fusion Player will be able to upgrade in place to Fusion Pro by updating the app to version 13.5.2 or later and deleting the Fusion Player license key. Workstation Player users will need to download and install the Workstation Pro software separately.
Users who want to use Fusion Pro and Workstation Pro will need to sign up for a Broadcom account; once they do, Fusion Pro can be downloaded from here, and Workstation Pro can be downloaded from here.
Broadcom CEO Hock Tan this week publicized some concessions aimed at helping customers and partners ease into VMware’s recent business model changes. Tan reiterated that the controversial changes, like the end of perpetual licensing, aren’t going away. But amid questioning from antitrust officials in the European Union (EU), Tan announced that the company has already given support extensions for some VMware perpetual license holders.
Broadcom closed its $69 billion VMware acquisition in November. One of its first moves was ending VMware perpetual license sales in favor of subscriptions. Since December, Broadcom also hasn’t sold Support and Subscription renewals for VMware perpetual licenses.
In a blog post on Monday, Tan admitted that this shift requires “a change in the timing of customers’ expenditures and the balance of those expenditures between capital and operating spending.” As a result, Broadcom has “given support extensions to many customers who came up for renewal while these changes were rolling out.” Tan didn’t specify how Broadcom determined who is eligible for an extension or for how long. However, the executive’s blog is the first time Broadcom has announced such extensions and opens the door to more extension requests.
Tan also announced free access to zero-day security patches for supported versions of vSphere to “ensure that customers whose maintenance and support contracts have expired and choose to not continue on one of our subscription offerings are able to use perpetual licenses in a safe and secure fashion.” Tan said other VMware offerings would also receive this concession but didn’t say which or when.
Antitrust concerns in the EU
The news follows Broadcom being questioned by EU antitrust regulators. In late March, MLex said that a European Commission spokesperson had contacted Broadcom for questioning because the commission “received information suggesting that Broadcom is changing the conditions of VMware’s software licensing and support.” Reuters confirmed the news on Monday, the same day Tan posted his blog. Tan didn’t specify if his blog post was related to the EU probing. Broadcom moving VMware to a subscription model was one of the allegations that led to EU officials’ probe, MLex said last month. It’s unclear what, if anything, will follow the questioning.
Tan said this week that VMware’s plan to move to a subscription model started in 2018 (he previously said the plans started to “accelerate in 2019”) before Broadcom’s acquisition. He has argued that the transition ultimately occurred later than most competitors.
The Commission previously approved Broadcom’s VMware purchase in July after a separate antitrust investigation.
However, various European trade groups, including Beltug, a Belgian CIO trade group, and the CIO Platform Nederland association for CIOs and CDOs, wrote a letter (PDF) to the European Commission on March 28, requesting that the Commission “take appropriate action” against Broadcom, which it accused of implementing VMware business practices that resulted in “steeply increased prices,” “non-fulfillment of previous contractual agreements,” and Broadcom “refusing to maintain security conditions for perpetual licenses.”
Partner worries
VMware channel partners and customers have also criticized Broadcom’s VMware for seemingly having less interest in doing business with smaller businesses. The company previously announced that it is killing the VMware Cloud Services Provider (CSP) partner program. The Palo Alto-headquartered firm originally said that CSPs may be invited to the Broadcom Expert Advantage Partner Program. However, reported minimum core requirements seemed to outprice small firms; in February, some small managed service providers claimed that the price of doing VMware business would increase tenfold under the new structure.
Small CSPs will be able to white-label offerings from larger CSPs that qualified for Broadcom’s Premier or Pinnacle partner program tiers as of April 30, when VMware’s CSP partner program shutters. But in the meantime, Broadcom “will continue existing operations” small CSPs “under modified monthly billing arrangements until the white-label offers are available,” Tan said, adding that the move is about ensuring that “there is continuity of service for this smaller partner group.”
However, some channel partners accessing VMware offerings through larger partners remain worried about the future. CRN spoke with an anonymous channel partner selling VMware through Hewlett Packard Enterprise (HPE), which said that more than half of its VMware customers “have reached out to say they are concerned and they want to be aware of alternatives.”
Another unnamed HPE partner told CRN that Broadcom’s perceived prioritization of “the “bigger, more profitable customers, is sensible but “leaves a lot of people in the lurch.”
Broadcom didn’t respond to Ars’ request for comment.
Broadcom has made controversial changes to VMware since closing its acquisition of the virtualization brand in late November. Broadcom executives are trying to convince VMware customers and partners that they’ll eventually see the subscription-fueled light. But discontent remains, as illustrated by industry groups continuing to urge regulators to rein-in what they claim are unfair business practices.
Since Broadcom announced that it would no longer sell perpetual VMware licenses as of December 2023, there have been complaints about rising costs associated with this model. In March, a VMware User Group Town Hall saw attendees complaining of price jumps of up to 600 percent, The Register reported. Small managed service providers that had worked with VMware have reported seeing the price of business rising tenfold, per a February ServeTheHome report.
Broadcom execs defend subscription model
However, Sylvain Cazard, president of Broadcom Software for Asia-Pacific, reportedly told The Register that complaints about higher prices are unwarranted since customers using at least two components of VMware’s flagship Cloud Foundation will end up paying less and because the new pricing includes support, which VMware didn’t include before.
The Register reported that Cazard, as well as Paul Turner, VP of product management at VMware, and Prashanth Shenoy, VP of product and technical marketing for the Cloud, Infrastructure, Platforms, and Solutions group at VMware, all agreed that people who think moving to subscriptions is unfair aren’t considering that VMware waited longer than many in the industry to implement the model.
This is an argument Broadcom has made before. Broadcom CEO and President Hock Tan called subscription-only licensing “the industry standard” in a March blog post defending VMware’s changes.
Pushing for government intervention
Despite Broadcom execs’ efforts to convince people that its changes are reasonable and will eventually end up financially benefitting stakeholders, there’s still effort from industry groups to get federal regulators involved with how Broadcom is running VMware.
As reported by Dutch IT magazine Computable on Friday, representatives from Beltug, a Belgian CIO trade group; Le Cigref, a French network of companies interested in digital technology; the CIO Platform Nederland association for CIOs and CDOs; and VOICE e.V., a German association for IT decisionmakers, sent a letter [PDF] to European Commission President Ursula von der Leyen and European Commissioner Thierry Breton on Thursday to “strongly condemn” Broadcom’s businesses practices and ask the commission to take action.
The letter complains of “sudden changes in policy and practices” that Broadcom issued to VMware that the authors claim led to: “steeply increased prices; non-fulfillment of previous contractual agreements; disallowing reselling of licenses; refusing to maintain security conditions for perpetual licenses; (re)bundling of licenses, leading to higher costs; a shake up of the ecosystem of VMware resellers and partners”; and “a loss of knowledge.”
The letter reads, in part:
In the context of the VMware takeover and the change in business strategy, Broadcom’s contempt and brutality towards its customers are unprecedented in the recent history of the digital economy in Europe. In view of its scale and Broadcom’s impact, this case cannot be left exclusively to competition law technicians.
The letter also discusses concerns about Broadcom driving business to the public cloud with negative consequences for the European economy.
“This will further strengthen the position and power of the hyperscalers, which will have a profound impact on the entire market,” the letter says.
It’s worth noting that this group has written letters to the commission before and that the commission approved Broadcom’s VMware acquisition in July 2023 after an antitrust probe. However, Broadcom was recently contacted by antitrust authorities in Europe regarding claims that it was changing VMware software licensing and support conditions, MLex reported on Wednesday.
Broadcom has a couple of big updates planned for VMware’s Cloud Foundation that, execs told The Register, will help people understand the value of the new VMware.
In July, Broadcom plans to update Cloud Foundation so that a single license key can be used for all components. The update is also supposed to heighten OAuth support as the company seeks to bring single sign-on to all VMware products and add a VMware NSX overlay. Turner told The Register that the changes are examples of how Broadcom is trying to make VMware Cloud Foundation easier to implement than before Broadcom took over.
In the first half of 2025, VMware plans to release the VCF 9 update, which will be “the fullest expression of Broadcom’s vision for product integration,” Shenoy told The Register. Turner claimed that because of the update, users with multiple VMware products would no longer need individual silos for discrete storage.
Broadcom has made sweeping changes to VMware’s business since acquiring the company in November 2023, killing off the perpetually licensed versions of VMware’s software and instituting large-scale layoffs. Broadcom executives have acknowledged the “unease” that all of these changes have created among VMware’s customers and partners but so far haven’t been interested in backtracking.
Among the casualties of the acquisition is the free version of VMware’s vSphere Hypervisor, also known as ESXi. ESXi is “bare-metal hypervisor” software, meaning that it allows users to run multiple operating systems on a single piece of hardware while still allowing those operating systems direct access to disks, GPUs, and other system resources.
One alternative to ESXi for home users and small organizations is Proxmox Virtual Environment, a Debian-based Linux operating system that provides broadly similar functionality and has the benefit of still being an actively developed product. To help jilted ESXi users, the Proxmox team has just added a new “integrated import wizard” to Proxmox that supports importing of ESXi VMs, easing the pain of migrating between platforms.
The announcement claims that an imported ESXi VM will have “most of its config mapped to Proxmox VE’s config model” to minimize downtime. The documentation indicates that the import wizard is still “in tech preview state” and “under active development,” though it’s also said to be “working stable.” The importer works with VMs made in ESXi versions 6.5 through 8.0, which was the most recent version available before Broadcom discontinued the software.
A wiki article from Proxmox also provides more information about preparing your VMs for the move. The article recommends uninstalling guest tools made to work with ESXi, noting network configuration settings like MAC addresses or any manually assigned IP addresses, and disabling any full-disk encryption that stores its keys in your hypervisor’s virtual TPM. It’s currently not possible to migrate vTPM settings from one hypervisor to another, so booting up a VM with disk encryption enabled will require a recovery key before the machine will boot.
Like the free version of ESXi, the free version of Proxmox VE doesn’t include technical support beyond what is offered in Proxmox’s community forums. For people who use Proxmox VE and want to deploy it more widely in a business, Proxmox does offer a few subscription tiers that provide access to its more stable Enterprise Repositories and actual technical support from the software’s developers.
