Broadcom is significantly increasing the minimum requirement for VMware licenses. According to VMware distributor Arrow, the minimum number of required cores per command line will increase from 16 to 72 as of April 10.
According to The Register, the French branch of Arrow has emailed VMware partners to inform them of the drastic price increase. This will have major consequences, especially for smaller customers. A company with a server that contains only one processor with eight cores will soon have to pay for 72 cores, which means they will pay for 64 cores they cannot use.
Strategy aimed at large customers
The change aligns with Broadcom’s focus on larger, more profitable customers. Smaller customers using vSphere Foundation and vSphere Enterprise Plus for basic virtualization services will be hit the hardest. The impact will be limited for users of VMware Cloud Foundation (VCF), who generally use far more than 72 cores for their private cloud environments.
The e-mail also warns that Broadcom “has introduced penalties for end customers who have not renewed their subscription licenses (already in place) on the anniversary date”. These penalties amount to a 20 percent increase on top of the first year’s subscription renewal offer.
The Register obtained the e-mail and asked VMware for confirmation but has not received a response.
Since the acquisition of VMware, Broadcom has been using a strategy aimed at the major players. The results appear to be positive for Broadcom. CEO Hock Tan recently reported that VMware is generating more profit than expected. After the acquisition, Broadcom consolidated VMware’s extensive product portfolio into a few bundles that are only sold through subscriptions. Although the individual prices of products within these bundles fell, most users saw their total costs rise due to the mandatory purchase of complete bundles and associated services.
Broadcom has often indicated that it is satisfied with VMware’s restructuring and integration into its infrastructure software business unit. The strategic focus on larger customers seems to be working for now, despite growing dissatisfaction among smaller VMware users.