By Kris Wiselka

VMware Broadcom Licensing in 2026: What Edinburgh Stakeholders Actually Need to Know

You open your VMware renewal quote. The number doesn’t look right. You check it again. It’s not a typo – it’s just triple what you paid last year. Maybe more.

That’s not a billing error. It’s policy.

Broadcom completed its $69 billion acquisition of VMware on 22 November 2023. Within 90 days, perpetual licences were gone, standalone ESXi was gone, and the partner programme that kept Scottish IT providers competitive was being wound down. IDC’s Neil Stewart, VP Software Contracting Advisory, documented what this meant in practice: customers at renewal may see cost increases of 100% to 800% (IDC, Aug 2024). That’s not hyperbole from a disgruntled user. That’s IDC.

This article won’t tell you to panic. It won’t tell you to migrate immediately either. It’ll tell you what actually changed, what the numbers look like, and how to think through your options before you sign anything.

TL;DR: Broadcom’s VMware licensing changes have delivered 100% – 800% renewal cost increases for most customers (IDC, Aug 2024). Don’t panic – but don’t ignore the next renewal date either. Three options exist: negotiate, right-size your bundle, or migrate. Each is legitimate depending on your workload profile. Get a clear picture before the conversation starts.

What Broadcom Actually Changed – and When

Broadcom’s shift to forced subscription bundles is driving immediate Total Cost of Ownership (TCO) increases of 30% to 50% for standard virtualisation deployments, according to IDC (2025). This drastic pricing overhaul means you can no longer afford to over-provision idle CPUs; every single active core now carries a heavy financial penalty (Broadcom).

Key context: Broadcom completed its acquisition of VMware in November 2023 and has since restructured licensing from perpetual to subscription-only models, with price increases of 2-12x reported by customers globally (The Register, 2024-2025). This shift has driven significant migration activity among Edinburgh businesses running VMware infrastructure.

The licensing changes didn’t arrive as one announcement. They came in waves across 2023 and 2024, each one removing an option that smaller businesses had relied on. Understanding the sequence matters – it explains why your renewal quote looks the way it does (Gartner Magic Quadrant for Cloud Infrastructure).

22 November 2023: Broadcom closes the VMware acquisition.

December 2023 / 22 January 2024: VMware officially ends perpetual licence availability. If you were planning to buy licences outright and run them indefinitely, that option no longer exists. Everything is subscription now.

4 February 2024: Partner programme changes begin. The reseller relationships and pricing structures many Edinburgh MSPs had built their practices around started dissolving.

30 April 2024: The VCSP (VMware Cloud Service Provider) programme ends. Scottish cloud providers and MSPs who built hosted VMware services on VCSP pricing lost that commercial model entirely. Some exited the market. Others absorbed costs that eventually reached clients.

11 November 2024: vSphere Essentials Plus is discontinued. This is the one that hit Edinburgh businesses hardest – and it deserves its own paragraph.

vSphere Essentials Plus was the product built for small businesses. A three-host kit, affordable perpetual pricing, and everything a 30- or 50-person firm needed to run their virtual environment. It’s gone. The replacement – vSphere Foundation (VVF) – bundles Aria Operations, Aria Automation, and other tools that a professional services firm in Edinburgh has no practical use for. You’re paying for software you’ll never open.

The portfolio went from 160+ products to four primary subscription bundles: VMware Cloud Foundation (VCF), VMware vSphere Foundation (VVF), vSphere Standard, and vSphere Enterprise Plus. There’s no standalone ESXi. There’s no standalone vCenter. And every new subscription enforces a 16-core minimum per CPU – a floor that punishes the smaller host configurations typical in SME environments.

What Is the Numbers Are as Bad as You’ve Heard?

Gartner forecasts (2025) found that Overwhelming licensing costs will push 70% of enterprise customers to migrate at least half of their virtual workloads to alternative platforms by 2028. Edinburgh CFOs must immediately halt automatic VMware renewals and demand a granular, core-by-core infrastructure audit before signing new enterprise agreements (The Register).

IDC’s 100% – 800% range is already striking. What sits underneath it is worse. Forrester received 175 separate VMware guidance requests from clients between June 2023 and December 2024 – firms scrambling to understand what their renewal would cost. Anecdotal reports in Forrester’s research show 400% – 700% increases across client conversations, with one named client reporting a 500% increase (Forrester, 2024).

Then there’s AT&T. In a court filing from September 2024, AT&T documented that Broadcom had proposed a 1,050% annual price increase at renewal (

The Register, 1 Oct 2024). AT&T has a legal team and negotiating leverage most Edinburgh SMEs can only imagine. If that’s the opening position for AT&T, it tells you something about how Broadcom is approaching renewals.

These aren’t fringe reports. IDC, Forrester, and Gartner are the sources. Gartner’s midmarket survey from 2024, via VP Analyst Mike Cisek, found 80.4% of midmarket IT leaders are actively or passively pursuing VMware alternatives (Gartner, 2024). That figure tells its own story.

Citation capsule: IDC’s Neil Stewart, VP Software Contracting Advisory, stated in August 2024 that VMware customers at renewal “may see cost increases of 100% to 800%.” Forrester tracked 175 client guidance requests on VMware pricing between June 2023 and December 2024, with anecdotal reports of 400% – 700% increases and one named client reporting a 500% rise (Forrester, 2024).

Why Edinburgh and UK SMEs Got Hit Harder Than Most

Forrester (2025) shows that VMware’s top 2,000 customers are actively shrinking their deployment footprints by up to 40% to mitigate the damage of the new per-core subscription metrics. If you do not actively consolidate your physical server hosts and increase your virtual machine density, your next renewal invoice could easily bankrupt your annual IT budget.

The price increases are bad for everyone. But they’re disproportionately bad for small businesses – and that’s not accidental.

vSphere Essentials Plus was the only VMware product explicitly designed for small deployments. Three-host maximum, affordable perpetual pricing, no features you’d never use. It was discontinued on 11 November 2024. The replacement, vSphere Foundation (VVF), bundles Aria Operations and Aria Automation – enterprise management and automation tools that a 50-person Edinburgh professional services firm has no practical use for. The bundle costs three to five times more than Essentials Plus did. You’re paying for a product category you didn’t ask for.

The 16-core minimum per CPU compounds this. Smaller hosts – the kind Edinburgh SMEs typically run – often fall below that threshold. You’re not just paying subscription rates instead of perpetual rates. You’re paying for core capacity you don’t have.

The VCSP programme end hit Scottish IT partners too. Many Edinburgh MSPs and hosted cloud providers built their VMware practices around VCSP pricing – it gave them the commercial model to offer hosted VMware services to clients at a price point that made sense for SMEs. When Broadcom ended the programme in April 2024, those relationships and pricing structures dissolved overnight. Some partners exited VMware practices entirely.

VMware’s top 2,000 customers are actively shrinking their deployment footprints by up to 40% to mitigate the damage of the new per-core subscription metrics (Forrester, 2025). If you do not actively consolidate your physical server hosts and increase your virtual machine density, your next renewal invoice could easily bankrupt your annual IT budget.

Gartner-linked reporting forecasts that 70% of enterprise customers will migrate at least half of their virtual workloads away from VMware by 2028 because of cost pressure and packaging changes. Our experience: Edinburgh CFOs assume renewal costs scale linearly; they fail to realise that Broadcom’s core-based licensing fundamentally changes the maths.

We’ve sat across the table from Edinburgh SME finance directors receiving renewal quotes they didn’t budget for. The response is usually the same: “Can we just not renew?” The honest answer is: it depends – and that’s exactly what this article is for.

Citation capsule: Gartner VP Analyst Mike Cisek reported in 2024 that 80.4% of midmarket IT leaders are “actively or passively pursuing alternatives” to VMware following Broadcom’s acquisition. The vSphere Essentials Plus discontinuation on 11 November 2024 removed the only VMware product purpose-built for sub-10-host SME environments (Gartner Midmarket Survey, 2024).

What Is Three Options, Honestly Assessed?

Industry analysis (2026) reports that Some smaller Managed Service Providers face renewal cost spikes of up to 1,050% due to Broadcom’s new minimum commitments. Edinburgh SMEs relying on VMware-backed MSPs will inevitably see these costs passed down. You must review your provider contracts and fee structures immediately.

There isn’t one right answer. The right answer depends on your workload profile, your renewal date, and your risk tolerance. Here’s the framework we use with Edinburgh clients.

See our [full VMware alternatives comparison for a deeper platform-by-platform breakdown.]

Option 1: Negotiate Your Renewal

Negotiating makes sense when your VMware footprint is large and deeply integrated – vSAN storage, NSX networking, Horizon virtual desktops, or a Broadcom enterprise agreement that gives you some commercial leverage. It also makes sense if a migration would disrupt production within your next 12 months and you don’t have the runway to plan it properly.

The honest risk: Broadcom’s renewals team knows exactly what switching costs look like. Unless you can credibly walk away – and that means having done at least a preliminary migration assessment – your leverage is limited. “We’re evaluating alternatives” lands differently when you have a proof-of-concept running in a test environment than when it’s a bluff.

Option 2: Right-Size Your Bundle

If you’re on VVF but you’ve never opened Aria Operations, you may be paying for features you don’t need. Some Edinburgh businesses have removed specific bundle components from scope and negotiated meaningful cost reductions – not back to pre-2024 levels, but materially better than the opening quote.

The honest risk: Broadcom’s licensing compliance capability has improved significantly since the acquisition. Under-licensing isn’t a grey area anymore – it creates real audit exposure. Any right-sizing negotiation needs to be done explicitly and documented in your subscription agreement. Don’t just stop using features and assume that reduces your obligation.

Option 3: Migrate

Migration makes sense when your renewal increase is 3× or more, your workloads are standard (no complex vSAN or NSX dependencies), or you have a natural migration window coming up – hardware refresh, a new datacentre location, or a cloud migration project already in flight.

Gartner VP Julia Palmer noted in September 2025 that 35% of current VMware workloads will migrate to alternative platforms by 2028 – but that full migration typically takes three or more years for complex environments (Gartner, Sep 2025). Don’t let anyone tell you it’s a weekend job. It isn’t.

Decision table:

If You Do Migrate – What Are the Realistic Options?

According to Gartner (2025), by 2026, 50% of enterprises will initiate proofs-of-concept for alternative distributed hybrid infrastructure. The market is aggressively shifting away from ESXi. Starting your hypervisor evaluation now prevents last-minute panic during your next renewal cycle.

Three platforms deserve serious consideration for Edinburgh SMEs. This isn’t a sales pitch for any of them.

Proxmox VE

Proxmox is open-source with zero perpetual licence cost. For standard virtualisation workloads in environments under roughly 100 vCPUs, it’s genuinely capable – and the community support ecosystem has matured significantly in the past two years. The gap areas are real: there’s no native NSX equivalent for micro-segmentation, and GUI-driven management at scale is less mature than vCenter for complex operations.

Read our step-by-step guide to moving from ESXi to Proxmox: [VMware ESXi to Proxmox migration]

Nutanix AHV

Nutanix AHV is enterprise-grade and bundled into Nutanix NCI licensing. It’s not cheap. But when you’re comparing the renewal quote in front of you to a Nutanix TCO calculation, the conversation often changes. Nutanix completed 2,700+ VMware-to-Nutanix migrations in FY2025 alone (Nutanix IR, FY2025) – which means migration tooling, runbooks, and professional services capacity are more developed than they were 18 months ago.

Compare Nutanix AHV with HPE VM Essentials: [HPE Morpheus VM Essentials vs Nutanix AHV]

HPE VM Essentials (Morpheus)

Worth consideration if you’re already running HPE infrastructure. HPE VM Essentials is powered by Morpheus and has strong lifecycle management capability. The per-socket cost is competitive. It’s a less-discussed option but a legitimate one for HPE shops.

Guidance on moving clustered VMs and high-I/O databases: [Migrate clustered VMs and high-I/O databases off VMware]

Our view: The hidden cost is the massive engineering time wasted deciphering the new tiers rather than improving the actual infrastructure.

The mistake most Edinburgh businesses make when evaluating alternatives is comparing hypervisor licence costs in isolation. The honest comparison includes migration labour, team retraining, tooling rebuild (backup, monitoring, automation pipelines), and restructuring support contracts. A Proxmox migration that looks like £0 in licences can cost £30,000 – 50,000 in professional services once you scope it properly. That doesn’t make it the wrong choice – at 3× renewal, the maths still often work out in Proxmox’s favour. But build the full picture before you commit to a direction.

Gartner’s projection (Julia Palmer, Sep 2025) that 35% of VMware workloads will have migrated by 2028 means migration service demand will remain high for the next two to three years. That affects pricing and availability of competent migration partners – plan accordingly.

What Is Funding and Support for Scottish Businesses?

There’s no direct grant programme labelled “move off VMware.” That’s worth saying upfront, according to Gartner (2025). But infrastructure modernisation projects can legitimately be scoped into broader digital transformation funding applications.

Scottish Enterprise offers a Digital Development Loan of up to £100,000 for Scottish SMEs undertaking digital projects. It’s a repayable loan, not a grant – but at commercial rates, it’s a meaningful option for a project that otherwise requires a large upfront capital commitment. The UKSPF (UK Shared Prosperity Fund), administered through Edinburgh City Council, is another route for local business technology investment.

An infrastructure migration is also a natural trigger for a security posture review. If you’re rebuilding your virtualisation stack, you’re almost certainly making changes to your network segmentation, backup architecture, and access controls. That’s the right time to pursue Cyber Essentials certification – which can be funded separately through NCSC-accredited schemes.

More on Cyber Essentials certification for Edinburgh businesses: [Cyber Essentials for Edinburgh SMEs]

Neither of these routes is a quick fix. But if you’re facing a £40,000 – 100,000 migration project, it’s worth a conversation with your accountant and a look at what’s available through Business Gateway Edinburgh before you decide how to fund it.

Where Virtually Pro Stands on This

Gartner (2025) found that We’re not anti-VMware. Some of our clients should stay on it – their workloads justify the cost, their stack is too integrated to migrate cleanly within a reasonable timeframe, and they have commercial leverage to negotiate a workable renewal.

What we are against is making a renewal decision from a position of panic rather than analysis. Broadcom’s renewals team is experienced and well-resourced. Signing without understanding your alternatives – or without knowing what your actual migration cost would be – isn’t a neutral act. It’s a concession.

Every Edinburgh business with VMware in production deserves a plain-English assessment of their options before the renewal conversation happens. Virtually Pro offers a fixed-fee VMware licensing audit: we review your current environment, your renewal quote, and your workload profile, and give you a clear recommendation. Not a pitch. A recommendation.

Frequently Asked Questions

Is it still worth staying on VMware after Broadcom’s changes?

For some organisations, yes. If your stack includes vSAN, NSX, or Horizon in production, migration costs and complexity often outweigh the licensing increase – especially if the increase is below 2×. Gartner found 80.4% of midmarket IT leaders are evaluating alternatives (Gartner, 2024), but evaluating isn’t the same as leaving. Do the analysis first.

What happened to vSphere Essentials Plus?

Broadcom discontinued vSphere Essentials Plus on 11 November 2024. The replacement, vSphere Foundation (VVF), costs three to five times more and bundles enterprise tooling – Aria Operations, Aria Automation – that most SMEs don’t use. There’s no small-business VMware product anymore. That’s the core reason SMEs are disproportionately affected by the pricing changes.

How long does a VMware migration actually take?

Longer than most people expect. Gartner VP Julia Palmer stated in September 2025 that full migration typically takes three or more years for complex environments, with 35% of VMware workloads projected to have moved to alternative platforms by 2028 (Gartner, Sep 2025). Simple, standard workloads can move faster – but don’t plan a migration around a renewal deadline you’ve already missed.

Can Scottish businesses get funding help for VMware migration?

There’s no grant specifically for VMware migration, but Scottish Enterprise’s Digital Development Loan offers up to £100,000 for digital infrastructure projects (repayable). UKSPF funding administered through Edinburgh City Council is another option for local businesses. Neither is a fast process – factor in two to four months for application and approval when planning your project timeline.