300% Price Hikes Push Disgruntled VMware Customers Toward Broadcom Rivals

After closing a $69 billion deal to buy virtualization technology company VMware a year ago, Broadcom wasted no time ushering in big changes to the ways customers and partners buy and sell VMware offerings -- and many of those clients aren't happy. ArsTechnica: To get a deeper look at the impact that rising costs and overhauls like the end of VMware perpetual license sales have had on VMware users, Ars spoke with several companies in the process of quitting the software due to Broadcom's changes. Here's what's pushing them over the edge.

For some, VMware prices more than tripled under Broadcom
Broadcom closed its VMware acquisition in November 2023, and by December 2023, the company announced that it would stop selling perpetual VMware licenses. VMware products were previously sold under 8,000 SKUs, but they have now been combined into a few bundle packages. Additionally, higher CPU core requirements per CPU subscription have made VMware more expensive for some reseller partners.

'As on-premises virtualization projects move from [enterprise license agreements] and perpetual licenses to new bundling, socket-to-core ratios, and consumption models, the costs and pricing can increase two or three times,' Gartner's 2024 Hype Cycle for Data Center Infrastructure Technologies report that released in June reads. Numerous VMware customers I spoke with said their VMware costs rose 300 percent after Broadcom's takeover. Some companies have cited even higher price hikes -- including AT&T, which claimed that Broadcom proposed a 1,050 percent price hike. AT&T is suing Broadcom over perpetual license support and says it has looked into VMware alternatives.

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