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VMware jumps 1,050% (AT&T): 7 alternatives that cost 86% less

AT&T faces 1,050% increases, Tesco sues for £100M and 74% of companies seek to escape Broadcom

AdScriptly.io Team
-January 26, 2026-15 min read
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Server infrastructure and virtualization concept with VMware alternatives comparison

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Key takeaways

Following Broadcom's acquisition, VMware skyrockets prices by 300-1,500%. Real cases: AT&T (1,050%), UK university (1,250%). Discover the 7 proven alternatives with pricing, pros/cons and migration guides.

Introduction

It was 9:00 AM when AT&T's CTO opened the email from Broadcom. What he read took his breath away: VMware was proposing a 1,050% increase in licensing. It wasn't a typo. One thousand and fifty percent.

This isn't an isolated case. Since Broadcom acquired VMware for $61 billion in November 2023, thousands of companies have received similar news. A UK university saw its costs jump from £40,000 to £500,000 annually (1,250% increase). Tesco, the UK's largest supermarket chain, is suing Broadcom for £100 million over anticompetitive practices.

The question is no longer "why are prices going up?" but "when should I migrate and where to?"

In this article you'll discover the 7 best VMware alternatives, with real pricing, verifiable success cases and practical migration guides. We'll also analyze why Broadcom made these decisions, which companies are fighting back legally and what analysts predict about the future of the virtualization market.

The Broadcom acquisition: What went wrong

The $61 billion deal

November 22, 2023: Broadcom completes the acquisition of VMware for $61 billion ($69 billion including $8 billion in assumed debt). Michael Dell, with a 40.2% stake, pockets $20 billion.

The initial promises sounded good:

  • "Enhanced innovation"
  • "Better customer value"
  • "Enterprise focus"

The reality: 12 months later

By January 2026, the situation is completely different:

  • Price increases: 300% to 1,500% depending on customer
  • Elimination of 18,000+ resellers: Only ~500 "Advantage Partners" remain
  • Forced bundling: Buy products you don't need or don't renew
  • 3-year lock-in: Contracts with 20% penalty for late renewal
  • Mass exodus: 74% of IT leaders actively seeking alternatives

According to Gartner, "By 2026, 50% of companies will initiate proof-of-concepts with VMware alternatives, up from 10% in 2024". The question isn't if there will be changes, but when.

The price increases: Real cases with names

The horror table: Increases by customer

Customer Before After Increase Status
AT&T Perpetual licenses 1,050% proposed 1,050% Legal battle
UK University £40,000/year £500,000/year 1,250% Evaluating alternatives
CISPE clients (Europe) Standard rates 800-1,500% higher 800-1,500% EU lawsuit
General companies Perpetual + maintenance 200-1,200% more 200-1,200% Mass migration

Increase ranges by segment

"Lucky" companies: 150-300%

  • Existing Enterprise Agreement contracts
  • Massive volume (top 2,000 Broadcom customers)
  • Negotiating power

Typical range: 300-800%

  • Mid-sized companies without special contracts
  • Perpetual license customers forced to subscription

Extreme cases: 800-1,500%

  • European customers (most heavily hit)
  • SMBs without negotiating power
  • Universities and NGOs that lost discounts

Why is Europe the most affected?

European customers report the most aggressive increases. CISPE (Cloud Infrastructure Services Providers in Europe) documented increases of 800-1,500% and filed a formal complaint with the European Commission in July 2025.

The reason: Europe has less competition in enterprise virtualization, giving Broadcom greater market power.

The new licensing model: Why you pay more

Before Broadcom: The old model

Perpetual licenses:

  • One-time payment, you own the license forever
  • Annual maintenance: ~20-25% of license cost
  • Example: Buy vSphere for $10,000, pay $2,000-2,500/year for support

Per-socket pricing:

  • Pay per physical CPU (up to 32 cores per socket)
  • Buy what you need (vSphere, vSAN, NSX separately)
  • 160+ SKUs available to choose exactly what you need

Minimum: 16 cores per purchase

Ecosystem: 18,000+ resellers across 4 tiers

After Broadcom: The new hell

Subscription-only:

  • Annual recurring payment, you never own anything
  • No perpetual option
  • Stop paying, lose all access

Per-core pricing with absurd minimums:

  • 16 cores minimum per CPU (even if your physical CPU has fewer)
  • 72 cores minimum total (previously 16)
  • 4.5x increase in minimum required cores

Forced bundling: Only 2 options:

Option 1: VMware Cloud Foundation (VCF) - $350/core/year

  • vSphere (virtualization)
  • vSAN (storage)
  • NSX (networking)
  • Aria Suite (management)
  • SDDC Manager (automation)

Option 2: vSphere Foundation (VVF) - $135/core/year

  • vSphere (virtualization)
  • Some vSAN capabilities
  • Some Aria capabilities
  • NO NSX

The problem: If you only need vSphere but they force you to buy VCF, you pay for:

  • vSAN you don't use
  • NSX you don't need
  • Aria Suite you won't deploy
  • SDDC Manager you can't leverage

Result: You pay 2-10x more for features you'll never use.

Real example: UK University

Before (2023):

  • 100 VMs on perpetual license
  • vSphere Enterprise Plus
  • £40,000/year in support

After (2024):

  • Broadcom demands: VMware Cloud Foundation (full bundle)
  • 72 cores minimum × $350/core = $25,200 (£20,000)
  • But with penalties and conversion: £500,000/year

The university only needed basic vSphere, but was forced to buy the most expensive complete bundle.

The victims: Companies fighting Broadcom

Tesco: The £100 million lawsuit

Who they are: The UK's largest supermarket chain

What happened: Tesco relies on VMware for 40,000 server workloads powering:

  • Cash registers in all stores
  • Logistics and supply chain
  • Critical IT systems

When renewal time came, Broadcom:

  1. Refused to renew existing perpetual licenses
  2. Demanded forced migration to subscription bundles
  3. Proposed prices that Tesco calls "excessive and inflated"

The response: Tesco sued in September 2024 for £100 million under the Competition Act 1998, alleging:

  • Abuse of dominant market position
  • Imposing unfair trading conditions
  • Refusal to supply essential software and support services
  • Tying and bundling of products (forced sale)
  • Excessive and unfair pricing

Tesco's warning: They declared the dispute could impact food supply in UK and Ireland if their systems fail.

Current status: Active court case in British courts

AT&T: The 1,050% increase

What happened: AT&T, one of VMware's largest enterprise customers, received a proposal from Broadcom to increase their costs by 1,050%.

The battle:

  • Susan Johnson, AT&T executive, sent an email to Broadcom CEO Hock Tan calling the increase "extreme"
  • AT&T refuses to renew under the new terms
  • Broadcom attempts to force early conversion from perpetual to subscription

The calculation: AT&T estimates migrating completely off VMware would cost $40-50 million, but with "very rapid payback" given the 1,050% increase.

Current status: Ongoing legal dispute (documents filed September 2024)

Siemens: The copyright lawsuit

Who they are: German industrial giant

What happened: In March 2025, VMware/Broadcom sued Siemens for copyright infringement, alleging use of "thousands" of VMware products without licenses.

The context:

  • 2012: Original master licensing agreement
  • September 2021: 3-year amended agreement
  • November 2023: Broadcom acquires VMware
  • 2024-2025: Licensing dispute escalates

Siemens' position: They requested support for products they had purchased; Broadcom refused unless Siemens accepted new pricing.

Jurisdictional battle: Siemens wants the case in Germany; VMware wants it in the United States.

Significance: Shows Broadcom's aggressive license enforcement strategy post-acquisition.

UK University: From £40k to £500k

Customer: UK University (name not publicly disclosed)

Before: £40,000/year in support costs

After: £500,000/year (mandatory VCF bundle)

Increase: 1,250%

Why: Forced to adopt complete VMware Cloud Foundation despite only needing basic virtualization.

Status: Actively evaluating Proxmox and OpenStack

The 7 best VMware alternatives in 2026

1. Proxmox VE: The 100% free option

What it is: Open-source virtualization platform combining KVM (virtual machines) and LXC (containers) with web management interface.

Pricing:

  • Base software: FREE (100% open-source)
  • Optional support: From €17/node/month (~$2,500/year for enterprise support)
  • No licensing costs ever

Key features:

  • Intuitive web interface (GUI)
  • Live migration between nodes
  • High availability (clustering)
  • Integrated backup and restore
  • Software-defined storage (Ceph integration)
  • Network virtualization
  • Supports VMs (KVM) and containers (LXC)

Who uses it successfully:

  • SMBs escaping VMware costs
  • Hosting providers
  • DevOps teams
  • Educational institutions

Migration tools:

  • Integrated VMware import tool
  • Direct connection to VMware environment
  • Converts VMs to Proxmox format

Pros: ✅ Zero licensing costs ✅ Enterprise-class features ✅ Active community support ✅ Regular updates ✅ Simple web interface ✅ Runs on commodity hardware

Cons: ❌ Smaller ecosystem than VMware ❌ Fewer enterprise management tools ❌ Learning curve for VMware administrators ❌ Less robust than commercial alternatives for very large deployments

Migration difficulty: Moderate - 3-6 months for typical enterprise

Best for: SMBs, cost-conscious companies, open-source advocates, hosting providers


2. Nutanix: The enterprise alternative with feature parity

What it is: Hyperconverged infrastructure (HCI) platform with native AHV hypervisor, offering unified compute, storage and virtualization.

Pricing model:

  • Per-node and capacity licensing
  • Pay-as-you-go (PAYG) without upfront commitment
  • Monthly charges based on physical cores and storage
  • AHV hypervisor included FREE with Nutanix AOS

Target customers:

  • Medium to large enterprises
  • Organizations seeking turnkey HCI
  • VMware refugees seeking feature parity

Features vs VMware:

  • Prism management: Unified, simple interface (highly rated vs vCenter)
  • Single platform: VMs, containers, databases, AI workloads
  • Native AHV hypervisor: No separate licensing
  • One-click upgrades: Simplified maintenance
  • Multi-cloud support: AWS, Azure, GCP integration
  • Integrated DR: Disaster recovery capabilities

Market position:

  • Gartner Magic Quadrant leader for HCI
  • Primary beneficiary of VMware exodus
  • NPS of 90+ (industry-leading customer satisfaction)
  • Expected to gain significant VMware market share by 2029

Pros: ✅ Feature parity with VMware ✅ Simpler management (Prism vs vCenter) ✅ No hypervisor licensing costs (AHV free) ✅ Strong vendor support ✅ Proven at enterprise scale ✅ Excellent customer satisfaction

Cons: ❌ Higher upfront costs than open-source alternatives ❌ Still requires subscription model ❌ Requires Nutanix or certified hardware ❌ Vendor lock-in concerns

Migration difficulty: Moderate to Low - Nutanix provides complete support

Best for: Enterprises seeking VMware-like capabilities without VMware pricing


3. OpenStack: For cloud providers and telcos

What it is: Open-source cloud computing platform combining compute (Nova), storage (Cinder, Swift) and networking (Neutron) into private cloud infrastructure. Think "build your own AWS".

Cost structure:

  • Software: FREE (100% open-source)
  • Implementation: $75,000-$150,000 depending on complexity
  • Managed services (Canonical): $4,275 per physical server/year
  • No licensing costs

Complexity level: HIGH

  • Requires significant technical expertise
  • Steep learning curve
  • Heavy CLI configuration
  • Challenging troubleshooting
  • May require additional headcount

Who should use it:

  • Telcos and cloud providers (primary users)
  • DevOps-driven organizations
  • Companies with strong infrastructure teams
  • Compliance-focused organizations needing flexibility

Success cases:

  • Small public cloud providers use OpenStack as native platform
  • Telecommunications companies (largest adopters)

Pros: ✅ No licensing costs ✅ Complete control and flexibility ✅ Avoid vendor lock-in ✅ Active community ✅ Production-proven at scale ✅ Can leverage commodity hardware

Cons: ❌ Very complex to deploy and maintain ❌ Requires expert staff ❌ High implementation costs ❌ Not suitable for small teams ❌ Long learning curve

Best for: Large organizations with in-house cloud expertise, telcos, cloud providers

NOT for: SMBs, organizations without dedicated infrastructure teams


4. Microsoft Hyper-V: Included with Windows Server

What it is: Microsoft's native hypervisor, integrated directly into Windows Server.

Pricing:

  • INCLUDED with Windows Server - major cost advantage
  • Windows Server Standard: ~$1,069 (allows 2 VMs)
  • Windows Server Datacenter: ~$6,155 (allows unlimited VMs)
  • No separate hypervisor licensing required

Features vs VMware:

  • Live Migration (included, no extra cost)
  • Failover Clustering
  • Hyper-V Replica (integrated replication)
  • Virtual Switch
  • Azure integration (seamless hybrid cloud)

Limitations:

  • Best for Windows-centric environments
  • Less robust for Linux workloads (though improved)
  • Smaller ecosystem than VMware
  • Fewer third-party integrations

Ideal use cases:

  • Windows-heavy environments
  • Organizations already invested in Microsoft ecosystem
  • SMBs needing simple virtualization
  • Hybrid cloud with Azure

Cost comparison example (16 cores on 2 CPUs):

  • Hyper-V: $1,069 (Standard, 2 VMs) or $6,155 (Datacenter, unlimited VMs)
  • VMware vSphere Foundation: $2,160 (16 cores × $135)
  • VMware vSphere Enterprise: ~$7,080 total

Pros: ✅ Included with Windows Server (massive savings) ✅ Excellent Azure integration ✅ Good for Windows workloads ✅ Microsoft support

Cons: ❌ Windows-centric (less Linux flexibility) ❌ Fewer features than VMware ESXi ❌ Management not as polished

Best for: Windows-heavy shops, Microsoft-committed organizations, Azure users


5. Red Hat OpenShift Virtualization

What it is: Kubernetes-based platform combining container orchestration with VM management using KubeVirt and KVM hypervisor.

Pricing:

  • Included with Red Hat OpenShift subscription (any edition)
  • OpenShift Virtualization Engine: New VM-focused edition, $1,903.99/year (2 CPU sockets, up to 128 cores)

When it makes sense:

  • Organizations already using OpenShift/Kubernetes
  • Modernizing infrastructure (VMs + containers on one platform)
  • Red Hat ecosystem customers
  • Companies pursuing cloud-native transformation

Pros: ✅ Unified platform (VMs + containers) ✅ Future-proof architecture ✅ Red Hat enterprise support ✅ Leverage Kubernetes skills

Cons: ❌ Requires Kubernetes knowledge ❌ More complex than traditional hypervisors ❌ Subscription costs

Best for: Companies adopting containers, Red Hat customers, cloud-native transformations


6. Citrix Hypervisor (XenServer)

What it is: Based on Xen hypervisor, commercial product with Citrix support

Best for: VDI environments (Citrix Virtual Apps and Desktops)

Market share: Smaller than VMware/Hyper-V


7. Other open-source alternatives

oVirt: Open-source virtualization management platform based on Red Hat technology. FREE, uses KVM as default hypervisor.

KVM: Integrated directly into Linux kernel. Open-source, free. Used by OpenStack, oVirt, Proxmox.

XCP-ng: Open-source fork of Citrix XenServer. 100% FREE. Enterprise-grade capabilities without costs.


Comparison table: Alternatives side by side

Alternative Approximate price Best for Migration difficulty
Proxmox VE FREE + optional support ($2.5k/year) SMBs, open-source advocates Moderate (3-6 months)
Nutanix PAYG, free AHV Medium-large enterprises Moderate-Low
OpenStack Free + implementation ($75-150k) Cloud providers, telcos High
Hyper-V Included with Windows Server ($1-6k) Windows-heavy shops Low-Moderate
OpenShift Virt Included with OpenShift ($1.9k+/year) Container adoption Moderate
XCP-ng FREE SMBs, limited budget Moderate
oVirt FREE Linux-savvy teams High

Savings example: 100-host infrastructure

VMware (Broadcom model):

  • 100 hosts × 16 cores average = 1,600 cores
  • VMware Cloud Foundation: 1,600 × $350 = $560,000/year

Nutanix:

  • More competitive licensing
  • Estimated: $280,000-350,000/year
  • Savings: $210,000-280,000 annually

Proxmox VE:

  • 100 hosts with enterprise support
  • 100 × $2,500 = $250,000/year maximum
  • Savings: $310,000 annually (55%)

Hyper-V Datacenter:

  • 100 hosts × $6,155 = $615,500 one-time
  • Maintenance: ~$123,000/year (20%)
  • Savings: $437,000 annually vs VMware (78%)

How much does it cost to migrate from VMware

Typical migration costs

External migration services: $300-$3,000 per VM

  • Varies by workload complexity
  • Migration size
  • Type (standard migration vs live)

Additional costs:

  • New software licenses/cloud expenses
  • Hardware purchases (compute, storage)
  • Early termination penalties (existing VMware contracts)
  • Application testing and QA
  • "Parallel run" period (paying both systems simultaneously)

Break-even requirement: Migration must pay for itself in 24-36 months

The AT&T example: Rapid ROI

Migration cost: $40-50 million

Broadcom's proposed increase: 1,050%

AT&T's conclusion: "Very rapid" payback given the massive increase

Rough calculation:

  • If AT&T was paying $10M/year on VMware before
  • 1,050% increase = $105M additional/year
  • Migration cost $50M / Savings $105M/year = Payback in 5-6 months

Enterprise migration timeline

Gartner research: Large-scale migration could require 7-10 FTEs for 1 month, plus up to 6 FTEs for 9 months.

Enterprise migrations (2,000+ VMs): 18-48 months total

Phase breakdown:

Phase 1: Assessment (1-3 months)

  • VM inventory, dependencies, requirements
  • Critical workload identification
  • Compatibility analysis

Phase 2: Planning (2-4 months)

  • Target platform selection
  • Architecture design
  • Migration playbook development
  • Migration wave identification

Phase 3: Pilot (1-3 months)

  • Non-critical workload migration
  • Process testing
  • Procedure refinement
  • Team training

Phase 4: Production migration (6-24 months)

  • Planned wave migration
  • Critical workloads last
  • Parallel run during stabilization
  • Continuous optimization

Staff ramp-up: 3-6 months for team to reach VMware-equivalent proficiency on new platform

Available migration tools

Commercial tools:

  • Nutanix Move (VMware to Nutanix)
  • Azure Migrate (VMware to Azure)
  • Red Hat OpenStack VMware migration toolkit

Open-source/integrated tools:

  • Proxmox VMware import tool
  • OpenStack migration utilities
  • XCP-ng conversion tools

Migration approaches:

  • Lift-and-shift: Move VMs as-is (faster but less optimized)
  • Re-platform: Minor adjustments during migration
  • Refactor: Modernize applications (slower but more beneficial long-term)

Risks of staying vs switching

Risks of staying with VMware:

  • Continued price increases (Broadcom's track record)
  • Forced bundle upgrades
  • 20% penalty for late renewal
  • 3-year lock-in contracts
  • Diminished support (Broadcom focused on top 2,000 customers)
  • Vendor lock-in intensifies

Risks of switching:

  • Migration costs and complexity
  • Temporary productivity loss during transition
  • Staff retraining requirements
  • Application compatibility issues
  • Downtime risk (if migration fails)
  • New platform learning curve

Training requirements

Proxmox: 1-2 weeks for experienced VMware admins (similar concepts)

Nutanix: 2-4 weeks (more streamlined than VMware in many aspects)

OpenStack: 3-6 months (very complex, significant learning curve)

Hyper-V: 1-2 weeks for Windows admins, 2-4 weeks for VMware admins

OpenShift Virtualization: 4-8 weeks (requires Kubernetes knowledge)

Typical training budget: $2,000-$5,000 per admin for certifications and courses

The legal battles: Europe, Tesco and more

The European Union investigation

CISPE (Cloud Infrastructure Service Providers in Europe) filed a formal appeal with the European General Court in July 2025 (Case T-503/25).

Goal: Overturn the European Commission's approval of Broadcom's VMware acquisition

Allegations:

  • The Commission failed to examine the risk of price increases
  • No safeguards implemented under EU merger rules
  • Post-merger reality: 800-1,500% increases, forced multi-year subscriptions, product bundling

CISPE "Red Alert" status: The European Cloud Competition Observatory gave Broadcom a "RED" rating, warning that its business model violates EU competition law.

Quote: "The Commission committed an error of law and manifest error of assessment regarding the transaction's impact on competition in the server virtualization software market"

European Commission response: "We are ready to defend our decisions in Court"

Active lawsuits (2024-2025)

  1. Tesco vs. Broadcom/VMware - £100M claim for anticompetitive practices
  2. AT&T vs. Broadcom - Breach of contract, 1,050% price increase dispute
  3. VMware vs. Siemens - Copyright infringement countersuit
  4. Dutch government - Contract dispute

Anticompetitive practice allegations

Tesco's claims under Competition Act:

  • Abuse of dominant market position
  • Imposing unfair trading conditions
  • Refusal to supply essential software and support services
  • Tying and bundling of products
  • Charging excessive and unfair prices

What Broadcom says: Their defense

Official statements

CEO Hock Tan (2024): "We've renewed our software portfolio, our go-to-market approach and the overall organizational structure. We've completed the transition of the software business model that began accelerating in 2019, from selling perpetual software to subscription licensing only – the industry standard."

On VMware Cloud Foundation pricing: Broadcom claims it "dramatically reduced the price of VMware Cloud Foundation to promote customer adoption" (from $700 to $350 per core/year - 50% reduction).

Response to CISPE: Broadcom stated they welcome "the opportunity to have a constructive dialogue with CISPE about how our products can help their European members be more competitive and innovative".

Justification for changes

Broadcom's arguments:

  1. "Industry standard": Subscription-only is industry norm
  2. Value addition: Bundling provides more value (debatable - customers forced to buy unwanted products)
  3. Price reduction: VCF reduced from $700 to $350/core (ignores forced bundling effect)
  4. Simplification: SKUs reduced from 160+ to 2 (ignores elimination of customer choice)
  5. Revenue goals: Targeting doubling VMware revenue from $4.7B to $8.5B

The reality check:

  • Despite "50% VCF reduction", customers report 300-1,500% increases
  • "Simplification" means loss of choice and forced bundling
  • Minimum core counts (72 vs 16) force customers to buy 4.5x more licenses
  • Subscription-only means perpetual license customers lose ownership

Broadcom's business philosophy

Quote: "Broadcom's pricing philosophy is about maximizing value from each customer, not keeping all customers"

This explains the strategy:

  • Focus on top 2,000 enterprise customers
  • Extract maximum revenue from large accounts
  • Accept SMB customer churn
  • Milk installed base rather than grow market share

Financial results (vindicating Broadcom's strategy from Wall Street perspective):

  • Infrastructure software revenue: $6.8B in Q3 2025 (17% increase)
  • Successfully increased revenue despite customer complaints
  • Wall Street pleased with financial performance

The future: Analyst predictions

Will prices stabilize or increase further?

Prediction: Prices will likely increase even more

Evidence:

  • Broadcom's goal: Double VMware revenue ($4.7B → $8.5B)
  • Track record: Broadcom increased prices 8-15x since acquisition
  • 20% penalty for late renewal introduced (new revenue mechanism)
  • Focus on maximizing revenue per customer, not customer count
  • No competitive pressure (VMware still dominant despite losses)

Analyst consensus: Expect continued price pressure during 2026-2027

VMware market share trajectory

Current status: 72% market share (down from 77.5% in 2022)

Predictions:

  • Gartner: HCI market share will drop from 70% (2024) to 40% (2029)
  • Forrester: Top 2,000 customers will reduce deployments by 40% (2025)
  • 35% of workloads expected to migrate by 2028 (140,000 customers)

Likely scenario: VMware remains dominant but severely weakened

  • Enterprise inertia keeps many customers locked in (short-term)
  • Gradual erosion over 5-10 years
  • Market fragments (Nutanix, Proxmox, Hyper-V, OpenStack all gain share)
  • VMware becomes "IBM of virtualization" - declining legacy leader

Winners in this situation

1. Nutanix - Primary beneficiary

  • Gartner predicts largest market share gains
  • Positioning as VMware alternative #1
  • Enterprise-ready, feature parity

2. Proxmox - Open-source winner

  • "Surged" in popularity according to multiple sources
  • SMB and mid-market favorite
  • Zero licensing cost advantage

3. Microsoft (Hyper-V) - Windows integration winner

  • Included with Windows Server
  • Azure integration sweetens deal
  • Natural choice for Microsoft shops

4. Red Hat - Cloud-native winner

  • OpenShift Virtualization for container-forward customers
  • Enterprise support appeal

5. OpenStack - Cloud provider winner

  • Telcos and cloud providers escaping VMware
  • Open-source flexibility

6. Cloud providers (AWS, Azure, GCP) - Indirect winners

  • Companies reconsidering on-prem vs cloud
  • VMware instability drives cloud migration discussions

Long-term impact on enterprise IT

Paradigm shift:

  1. End of single-vendor dominance: Virtualization market fragments
  2. Open-source renaissance: Companies more willing to adopt open-source infrastructure
  3. Hybrid approaches: Many will run multiple hypervisors (VMware + alternatives)
  4. Cloud reconsideration: VMware pricing makes cloud economics more attractive
  5. Container acceleration: Kubernetes adoption accelerates as alternative to VM sprawl

Skills impact:

  • Multi-hypervisor expertise demand
  • KVM skills become more valuable
  • Kubernetes skills increasingly critical
  • VMware-only admins face declining job market

Vendor trust erosion:

  • Acquisition-related pricing changes now major concern
  • Perpetual licenses no longer reliable (can be discontinued)
  • Companies building multi-vendor strategies to reduce risk

The "New Normal":

  • Heterogeneous virtualization environments (multiple hypervisors)
  • Greater focus on portability and avoiding lock-in
  • More aggressive vendor negotiations
  • Willingness to migrate rather than accept price increases

Conclusion: What should you do?

Decision guide by company type

If you're Enterprise (2,000+ hosts):

  • Evaluate Nutanix: Feature parity, enterprise support, reduces costs vs Broadcom
  • Consider hybrid: Keep VMware for critical workloads, migrate rest to Nutanix/Proxmox
  • Timeline: 24-36 months for complete migration

If you're Mid-Market (100-500 hosts):

  • Option 1 - Proxmox: Massive savings (55%), strong community, support available
  • Option 2 - Nutanix: If you need full vendor support
  • Option 3 - Hyper-V: If you're already a Microsoft shop
  • Timeline: 12-18 months

If you're SMB (< 100 hosts):

  • First choice - Proxmox VE: Free, robust enough, excellent community
  • Second choice - Hyper-V: If Windows-heavy workloads
  • Timeline: 6-12 months

If you're Government/Education:

  • OpenStack if you have strong IT team
  • Proxmox if budget limited
  • Nutanix if you need vendor support
  • Leverage educational/government discounts where applicable

Recommended action timeline

This week:

  1. Calculate what you'll pay under new Broadcom pricing
  2. Identify your VMware contract renewal date
  3. Download Proxmox or Nutanix trial for testing

This month:

  1. Run POC (Proof of Concept) with chosen alternative
  2. Migrate 2-3 non-critical VMs as test
  3. Request quotes from alternative vendors
  4. Calculate real migration ROI

Next 3 months:

  1. Approve budget and resources for migration
  2. Hire consulting if necessary
  3. Train IT team on new platform
  4. Develop detailed migration plan

6-24 months:

  1. Execute migration by waves
  2. Monitor performance and costs
  3. Refine operational processes
  4. Progressively reduce VMware footprint

The final message

Broadcom's VMware price increases aren't a one-time event - they're part of a deliberate revenue maximization strategy. By all indications, prices will continue rising.

The question isn't "should we migrate?" but "when and where to?"

Companies acting now will have:

  • Time to plan without pressure
  • Opportunity to leverage existing VMware contracts during transition
  • Ability to negotiate better terms with alternative vendors
  • Lower operational risk

Companies waiting will face:

  • Additional 20%+ price increases if renewing late
  • 3-year lock-in under unfavorable terms
  • Rushed migrations with greater risk
  • Less negotiating power

The window for action is open, but not forever. Start your evaluation this week.

Which alternative will you try first? Most offer free trial periods or POCs. You have nothing to lose by exploring.

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Frequently Asked Questions

Why did Broadcom increase VMware prices so much?

Broadcom seeks to double VMware revenue from $4.7B to $8.5B. Their strategy is to maximize value from the top 2,000 enterprise customers, forcing the transition from perpetual licenses to subscriptions, implementing mandatory bundling (VCF/VVF) and increasing core minimums from 16 to 72. CEO Hock Tan defends this as 'industry standard', but customers report 300-1,500% increases.

What are the best alternatives to VMware after Broadcom?

The best alternatives depend on your company size: (1) Nutanix - For enterprises seeking feature parity with VMware, full vendor support, free AHV hypervisor. (2) Proxmox VE - For SMBs and mid-market, 100% free with optional support from €17/month, active community. (3) Microsoft Hyper-V - For Windows-heavy shops, included with Windows Server. (4) OpenStack - For cloud providers and telcos with strong IT teams. 74% of IT leaders are actively evaluating these alternatives.

How much does it cost to migrate from VMware to another platform?

Migration costs vary between $300-$3,000 per VM, plus additional costs for hardware, new licenses, training (3-6 months to reach proficiency) and testing. For enterprises with 2,000+ VMs, the process takes 18-48 months. However, ROI can be very rapid: AT&T estimated $40-50M in migration costs but 'very rapid payback' given the proposed 1,050% increase. Typical break-even is 24-36 months.

Can I still use my VMware perpetual licenses?

Technically yes, for now. But Broadcom won't sell support renewals for perpetual licenses, eventually forcing migration to subscription or to another platform. When your current support contract expires, you'll face two options: (1) Migrate to VMware subscription under new terms (300-1,500% increases), or (2) Migrate to an alternative. Broadcom is actively eliminating the perpetual model, so your perpetual license has an effective expiration date.

Is VMware still worth it after Broadcom's changes?

It depends on your situation. Worth it if: (1) You're a top 2,000 enterprise with EA contract and significant discounts. (2) You have very deep integrations difficult to replace. (3) Your IT team is small and can't handle complex migration. NOT worth it if: (1) You're SMB or mid-market without negotiating power. (2) Your costs will increase 300%+ under new model. (3) You have IT capacity to migrate. Key data: 74% of IT leaders actively exploring alternatives, and Gartner predicts 50% of enterprises will trial alternatives in 2026.

Written by

AdScriptly.io Team

#vmware#broadcom#virtualization#infrastructure#alternatives#proxmox#nutanix#hyper-v#openstack#enterprise

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