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VMware licensing changes and the road ahead
VMware's new subscription fees: will enterprises pay up, walk away or explore a smarter third option?
VMware has played a key role in the technology world’s transition to the cloud, providing software that powers virtualisation, multi-cloud management, infrastructure, networking, security and more.
But many organisations are now reevaluating their virtualisation strategies following Broadcom’s acquisition of VMware in late 2023.
Their biggest concern has to do with new licensing changes, which involve consolidating more than 160 itemised products, bundles and editions into a handful of subscription-based products – meaning some customers are paying for features they don't use. For many, this means less pricing flexibility and higher costs.
Since Broadcom’s acquisition of VMware, some clients are seeing a cost increase ranging from 150% to 1,250% for the same services.
Exploring their options
As the licence renewal deadline draws closer, many IT leaders (especially those running large-scale virtual machine environments) are re-analysing their VMware private cloud and virtualisation strategies.
And we urge them to look at this change as an opportunity to approach IT differently and consider alternatives from a business continuity and technical perspective.
Whether companies choose to stay on VMware or move to a different platform, the team at DXC can help them realise significant cost savings, freeing up resources for other critical IT initiatives
Considering alternative private clouds
VMware, which made its name with tools that allow teams to run multiple virtual machines on a single physical machine, is dominant in the market, and many organisations may continue to reinvest in the technology under Broadcom’s ownership.
But they can also consider alternative top-tier private cloud solutions, such as Microsoft Hyper-V, Azure Stack, Nutanix AHV, RedHat, SUSE and open-source solutions like KVM.
Embracing a hybrid cloud approach
As many companies re-evaluate their cloud and virtualisation strategies, we are seeing a tilt towards hybrid cloud solutions that blend the strength of public and private clouds and may offer more agility.
This might be the time to consider taking a more dynamic approach to your IT infrastructure by adopting a strategy that ensures the right workloads are running in the right venue at the right time.
For some organisations, moving their workload into a public cloud is the best choice, and choosing a cloud migration provider with a high success rate is a crucial step.
For instance, DXC helped French train maker Alstom move over 1,000 virtual machines to Microsoft Azure while keeping others on-premises based on specific business cases. As a result, some 2,000 engineers can work from anywhere and implement state-of-the art systems, while clients can remotely connect to the platform and efficiently perform validation tests from their own environment.
Exploring multiple pathways to success
Businesses have the choice of extending VMware virtualisation environments to the public cloud, combining VMware private cloud and public cloud, or modernising virtualised VMware datacentres.
Organisations adapting to VMware’s evolving licensing models are finding opportunities to optimise costs and enhance efficiencies. Many have successfully streamlined their IT estates by replacing redundant functionalities – such as logging, observability, automation, software defined networking, microsegmentation, and hyperconverged infrastructure – with integrated solutions now available within their VMware Cloud Foundation model.
Additionally, aligning hardware footprints to VMware’s new 16-core-per-CPU socket minimum has been crucial in maximising performance and value. By carefully recalibrating memory-to-CPU ratios, businesses have ensured that workloads run optimally without unnecessary overhead.
For companies committed to VMware’s hypervisor technology, securing cost-effective licensing has become a priority. Early adopters have leveraged strategic partnerships to access competitive pricing and maintain continuity in their cloud environments.
These shifts highlight the importance of making informed decisions in response to VMware’s new landscape – turning what could be a challenge into a catalyst for greater efficiency and value.
While changing landscapes will create trickier terrain – sometimes in the form of pesky subscription fees including functions one’s organisation does not use – organisations do not have to succumb to an all-or-nothing mindset. Instead, leveraging on existing technologies will provide them with a sneaky, more cost-efficient third option.
Holland Barry is field chief technology officer for cloud and infrastructure at DXC Technology
