Navigating the VMware Broadcom Acquisition: Impact on your IT strategy  

If you’re like many in the tech world, you’ve probably heard about the seismic shift caused by Broadcom’s acquisition of VMware. This acquisition has sent ripples through the virtualisation landscape, and it’s essential to understand how these changes may impact your organisation and IT strategy. 

As the acquisition reshapes the virtualisation landscape, organisations must stay informed and agile. The changes present both challenges and opportunities, requiring a proactive and strategic approach to IT infrastructure management. By carefully assessing the implications of the transition to subscription models and considering the full range of available options, organisations can navigate this period of uncertainty with a clear focus on innovation, efficiency, and cost-effectiveness. 

So, let’s dive in and break down what this means for you and your IT infrastructure. 

Understanding the Cost Implications of the VMware Broadcom Acquisition 

The acquisition of VMware by Broadcom has been a topic of widespread discussion, not least because of its immediate implications for virtualisation and IT infrastructure management. But beyond the initial reactions, there’s a critical aspect that demands closer scrutiny: the potential for significant cost increases for a broad swath of VMware’s client base. 

The Shift to Subscription Models: A Double-Edged Sword 

One of the hallmark changes following this acquisition is VMware’s pivot from perpetual licences to a subscription-only model. This shift, while aligning with broader industry trends towards more flexible and scalable consumption models, introduces a nuanced challenge, particularly for organisations that have historically leveraged hardware with high core counts to maximise their investment over time. 

The transition away from perpetual licences might initially appear as a move towards simplicity and adaptability. However, for clients with specific hardware configurations—especially those with servers boasting a high core count or those utilising CPUs with a lower core count—this change could translate into substantial hikes in subscription costs. This reality marks a departure from the previous model, where investments in hardware could be ‘sweated’ over extended periods to extract maximum value. 

Yes, subscription models offer greater flexibility and scalability, aligning with the evolving needs of modern businesses but it pays to be sceptical here and ensure the financial implications don’t outweigh the offering. 

Evaluating the Impact on Organisational Budgets 

For organisations that have built their IT infrastructure under the perpetual licence model, particularly those leveraging servers with extensive core counts to maximise value, the new subscription model can lead to a stark reassessment of costs. In some cases, the financial implications of this shift have prompted organisations to consider investing in new hardware that meets a 16-core per CPU minimum, presenting a more cost-effective option under the new subscription pricing structure. 

 This adjustment underscores a critical insight: the new model, while offering flexibility and scalability, may also necessitate significant additional investment in hardware for certain VMware customers. The move has sparked discussions about the overall cost-benefit analysis of staying with VMware’s solutions versus exploring alternative virtualisation platforms that might offer a more favourable economic fit based on an organisation’s specific hardware and licensing configurations. 

Proactive Measures and Strategic Decisions 

Given these developments, it’s imperative for VMware clients to conduct a thorough review of their current hardware and software licensing arrangements. Understanding the specific impacts of these changes, especially concerning subscription pricing adjustments and the potential need for new hardware investments, is crucial for informed decision-making. 

For organisations facing steep increases in costs, the exploration of alternatives becomes not just an option but a necessity. Solutions such as Nutanix AHV or other hypervisors might provide a more cost-effective pathway, depending on the organisation’s specific infrastructure and needs. 

Now we understand the cost implications, let’s explore some of the other factors in play: 

The Implications of doing nothing 

With the end of perpetual licences comes the discontinuation of Support and Subscription (SnS) renewals for these licences. However, existing perpetual licence holders can rest assured that they can continue using their licences and will receive support as per their contractual agreements. It’s crucial to review your VMware inventory and understand the implications of these changes for your organisation. 

Subscription Pricing Adjustments 

Surprisingly, Broadcom has reduced subscription pricing for some VMware products, notably the Cloud Foundation suite. This unexpected move contrasts with Broadcom’s history of repricing acquired solutions. While it’s a welcome change, it’s essential to keep an eye on pricing adjustments and understand how they may impact your budget and don’t forget, the new subscription licencing criteria for your hardware may move the goalposts. 

Focus on VMware Cloud Foundation 

Broadcom’s strategic focus on VMware Cloud Foundation signals a commitment to advancing private and hybrid cloud environments. By prioritising investment in Cloud Foundation, Broadcom aims to accelerate product development and deployment, offering enhanced value to customers. 

Choosing the Right Hypervisor 

Amidst these changes, the choice of hypervisor becomes even more critical. Understanding the differences between Type-1 and Type-2 hypervisors, as well as specialised solutions like Nutanix AHV, Nexus can help you make informed decisions that align with your organisation’s needs and goals. 

Considering Alternatives 

While VMware has long been a go-to choice for many organisations, it’s essential to explore alternative solutions that may better suit your requirements. Whether it’s Nutanix AHV or other options, evaluating alternatives ensures you find the best fit for your IT infrastructure. 

Navigating Uncertainty 

The VMware Broadcom acquisition undoubtedly introduces uncertainty, but it also presents opportunities for innovation and growth. By staying informed, assessing your options, and maintaining open communication with vendors, you can navigate this transition successfully and position your organisation for success in the ever-evolving tech landscape. 

Understanding the Implications for Veeam Users 

Veeam’s focused support for VMware and Hyper-V means that organisations heavily reliant on Veeam for their backup needs must tread carefully when considering their hypervisor options. As the market reacts to Broadcom’s acquisition strategies, and as organisations reassess their commitments to VMware in light of the potential cost implications discussed earlier, the question of backup software compatibility comes sharply into focus. 

For those contemplating a shift to alternative hypervisors in search of cost efficiencies or feature benefits, the compatibility with their existing backup solutions cannot be overlooked. The reliance on Veeam implies that any move away from VMware or Hyper-V requires a parallel consideration of alternative backup software that supports the chosen hypervisor. This transition could introduce additional costs, complexities, and potential gaps in data protection strategies during the migration period. 

The Costs of Transitioning to New Platforms 

Moving to a different hypervisor or virtualisation platform entails more than just the immediate financial costs of new licenses or hardware. It also involves a substantial investment in retraining IT staff, acquiring new certifications, and the time required for personnel to become as proficient with the new systems as they were with VMware. This transition period can lead to reduced operational efficiency and increased risk as staff navigate the learning curve associated with new technology. 

Furthermore, the shift away from VMware could render existing certifications and specialisations obsolete, necessitating further investment in education and accreditation to ensure that IT teams remain at the forefront of virtualisation technology. Such considerations must be factored into the cost-benefit analysis of moving to an alternative platform. 

What does this all mean?  

While change can be daunting, it also brings the opportunity for transformation and improvement. By embracing these changes with a proactive mindset and strategic approach, you can steer your organisation towards a future of innovation and resilience.  

We’re here to help

As a trusted partner with deep expertise in VMware technologies, we are uniquely positioned to guide organisations through these transitions. Our longstanding partnership with VMware has provided us with extensive insights and capabilities to navigate the changing landscape effectively. We understand the nuances of the VMware Broadcom acquisition and its implications on IT infrastructure. With our specialised knowledge and dedicated support, we ensure a seamless transition and empower your organisation to thrive in the evolving virtualisation landscape. 

Get in touch with our team on 01392 205095 or email us on

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