It’s no secret that the technology industry is constantly changing – it’s unavoidable. What we can control is a proactive IT strategy based on honest discussions and strategic planning. This leads us to today's topic: VMware pricing increases.
While no one wants to hear about price increases, it’s crucial to stay informed about the best options available for your business and its budget. In this article, we’ll discuss the most recent VMware price increases we’ve seen, why they’re happening and possible alternatives your business can explore.
VMware is a technology company specializing in cloud computing and virtualization software.
Technology developer and manufacturer Broadcom completed its acquisition of VMware in November 2023, which led to significant changes in pricing and strategy. VMware has shifted its focus towards larger enterprise customers, leading to substantial price increases for smaller businesses. Some renewals jumped from $100 to $600, while others went from $1,500 to $9,000 annually, with year one being a 500% increase for many clients and year two being well over a 100% increase.
In January 2024, VMware transitioned from perpetual licensing to subscription-based licensing, meaning clients must renew their licenses annually to maintain access to support and features.
VMware has consolidated its offerings into three primary subscriptions: vSphere Standard, vSphere Enterprise Plus, and vSphere Foundation. This consolidation aims to streamline the company's product line but also pushes clients towards higher-tier packages that go beyond the specifications they might require.
The sizable and unexpected price increases have made budgeting difficult for many clients, as they need to allocate significantly more funds for renewals. This can be especially difficult for small to medium-sized businesses with small or more constrained IT budgets.
VMware’s new subscription model has led to clients being pushed to higher-tier packages, which leads to unnecessary expenses. Subscriptions also consolidate different or more advanced features that clients do not need to utilize but now have to pay for.
VMware's new minimum purchase point is 72 cores, which can be excessive for smaller businesses with fewer core requirements. For context, clients usually fall within the 16-20 core range.
One viable alternative is migrating to Hyper-V, a virtualization platform by Microsoft. This option involves a one-time project to convert data from VMware to Hyper-V, plus any potential monthly security costs. Depending on their current infrastructure and configuration, this will look different for each business.
Many clients already own Microsoft licenses, making Hyper-V a cost-effective choice. Microsoft licensing is perpetual, meaning clients won't need to renew annually. Hyper-V also offers automated patching and regular updates, enhancing security and reliability compared to VMware's manual Linux-based patching process.
If this topic affects your business or if you're interested in learning more, reach out to your account manager. They can go over the available options and assist you in planning for the future.