'Down to the Core': VMware Licensing changes and how they affect you by Josh Weston

The acquisition of VMware by Broadcom has created a fundamental shift in the company’s product offerings and licensing model, impacting organisations and IT teams worldwide. Many businesses are left wondering if VMware is still the best solution to meet their needs.

Transition from Perpetual to Subscription-Based Licensing

One of the first changes Broadcom announced after acquiring VMware was the discontinuation of perpetual licenses, which are replaced by subscription-based models. The new model incentivises bundled subscriptions, such as VMware Cloud Foundation (VCF) and VMware vSphere Foundation (VVF) which include several products such as vSphere, vSAN, NSX, and Aria Operations.

Per-Core Licensing and Minimum Purchase Requirements

Per-CPU socket licensing is no more, and products are now licensed per-physical CPU core, this also brings in a minimum requirement of 16 cores per CPU. Outside of the EMEA region a 72-core per product minimum has also been introduced, particularly impacting smaller environments.

The End of the Essentials Plus Kit

The popular essentials plus kit which provided licensing for a 3-host cluster, allowing many SMBs to meet both capacity and availability requirements, has been discontinued. Customers who previously relied on this kit have been directed toward vSphere standard, which now includes vCenter and other useful features such as storage vMotion but comes with a jump in cost for almost all environments.

How does this affect your organisation?

The transition to subscription-based licensing, coupled with core-based pricing, minimum purchase limits and new bundles presents several challenges:

• Cost Implications: Increased licensing costs are anticipated, particularly for small and medium-sized businesses (SMBs) and those with smaller CPU footprints.
• Reduced Flexibility: The elimination of perpetual licenses and the emphasis on multi-year subscription commitments limit the flexibility previously afforded to organizations in managing their IT budgets.
• Increased Complexity: Understanding the intricacies of the new subscription bundles and which is best for your organisation requires a thorough understanding of the revised offerings.
• Strategic Re-assessment: The above leave many organisations reconsidering their infrastructure strategies and exploring alternative virtualization platforms or cloud-native solutions.
• Larger impact on SMB: The discontinuation of the Essentials Plus Kit and the minimum core purchase requirements disproportionately affects SMBs, forcing consideration of alternative solutions.

How can Cybit help?

To help navigate this changing landscape, Cybit can help your organisation:

• Assess existing VMware product usage as part of baselining your existing environment.
• Evaluate the suitability and eligibility for the new products and bundles.
• Analyse the financial impact of the core-based licensing and minimum purchase requirements.
• Explore and migrate to alternative virtualization platforms and cloud solutions.

The Core Message: What you need to know moving forward

The licensing changes implemented by Broadcom impact all VMware customers. Organisations need to adapt by assessing their existing environments and understanding how these fit into the new licensing model and exploring alternative solutions if they do not. Businesses should adopt a strategic and informed approach plan their next steps either with or without VMware and Cybit are here to help.