Broadcom’s VMware Takeover: Time for IT Procurement to Take a Stand

Broadcom’s acquisition of VMware has shaken up the market. Licensing terms are different. Prices are way higher. Support quality has dropped. For CIOs and procurement leaders, this isn’t just a typical renewal conversation anymore - it’s a strategic moment that demands attention.

If that isn't enough, Broadcom is now sending cease and desist letters to its own customers using perpetual licenses. This is next-level pressure.

At Wyn, we’re seeing these changes hit organizations of all sizes, from global enterprises to public sector agencies. In this post, we’ll walk through what’s changed, the risks you need to watch out for, and the strategies you can use to keep costs under control and protect your negotiating power.

What’s Actually Changed?

Broadcom hasn’t been subtle:

• Subscriptions only: Perpetual licenses are out. Renewals now require a shift to subscription-based pricing, which is usually way more expensive.

• Fewer product options: More than 170 VMware SKUs have been bundled into just two packages, forcing you to pay for features you may never use.

• Aggressive licensing terms: Per-core licensing with inflated minimums (like 72 cores, even if you only use 8) hits smaller environments especially hard.

• Stricter support rules: Legacy contracts don’t roll over. Miss a deadline and you’re looking at a 20% late penalty.

• Shrinking sales channel: Fewer partners and discounts. Smaller and mid-sized customers are being pushed aside.

What’s at Risk?

• Massive price increases: Cost hikes of 2 to 10 times are common. One university saw its bill jump from £40K to £500K.

• Worsening support: Many smaller customers report slower, less helpful support. No subscription means no support at all.

• Locked-in architectures: With fewer SKUs, you’re stuck with fewer choices. The new bundles don’t always match what customers actually need.

• Stagnant products: Broadcom has a track record of slashing R&D. There’s a real risk that key VMware products could be sunset or left to stagnate.

• Extra pressure on SMBs: Broadcom is focused on its biggest accounts. Everyone else pays more and gets less flexibility.

  
  

How to Push Back

Here’s how you can fight back and protect your organization:

1. Engage early: Broadcom is strict about deadlines. Late renewals come with hefty penalties. Start discussions at least a year out. Align global contracts and aim for co-termination to improve leverage.

2. Audit what you have: Get a clear picture of your VMware environment. Cut unused products. Push for vSphere-only options where it makes sense - especially for test, dev, or remote sites.

3. Have a real exit plan: VMware may be sticky, but it’s not irreplaceable. Build a phased migration roadmap to alternatives like cloud-native, Hyper-V, KVM, or Red Hat. Even if you don’t switch, showing you can gives you bargaining power. One client who threatened to move 30% of workloads got a three-year deal at the price of one.

4. Lock in multi-year pricing: Secure pricing for three or more years to avoid future hikes. Negotiate caps on renewals and ensure flexibility if your usage changes.

5. Add the right protections in your contract: Make sure your agreement includes:

   • Rights to reduce or reallocate licenses

   • Flexibility to move between on-prem and cloud

   • Credits if a product is dropped

   • Strong support commitments

   • Limits on audits and penalties

6. Go up the chain: Sales reps often don’t have room to negotiate. Escalate to senior leaders - especially if you’re in public sector or critical infrastructure. Community pressure helps too. Join user groups and advocate together. Regulators in the EU and US are already watching Broadcom closely.

7. Consider third-party support: If you’re not ready to switch, firms like Park Place or Rimini Street can cover support while you figure out your next move. Some MSPs can also handle licensing under their own agreements, giving you a buffer.

   
   

Final Thoughts

This isn’t just another vendor renewal. Broadcom is aiming to extract maximum revenue from existing VMware customers. If you don’t take control of the negotiation, they’ll take control of the terms.

Wyn can help you push back. We bring real-time pricing benchmarks, VMware expertise from specialists who used to sell VMware, and expert negotiators to the table - so you can stay in control, on budget and avoid getting locked in.

Reach out to connect with one of our VMware specialists. Let’s talk about how to protect your bottom line.