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April 17, 2024 | John Stoker

Broadcom VMware Licensing Changes: Everything You Need to Know

The acquisition of VMware by Broadcom has reshaped the world of cloud computing. Across several announcements, VMware and Broadcom disclosed three pivotal changes to the way they do business.

First, they are streamlining and reducing their virtualization portfolio to two primary offerings: VMware Cloud Foundation and VMware vSphere Foundation. Next, they are shifting away from perpetual licensing and leveraging a subscription-based model going forward. And finally, they are relaunching their partner program with a significant reduction to their partner ecosystem.

What You Need to Know About the VMware and Broadcom Changes

As a result of customer and partner feedback, VMware and Broadcom are simplifying their product portfolio to feature two primary offerings: VMware Cloud Foundation and VMware vSphere Foundation.  VMware states that “as an outcome of this portfolio simplification, many VMware software solutions will only be offered as part of VMware Cloud Foundation (VCF) or VMware vSphere Foundation (VVF). They will not be available for purchase as standalone point solutions.”

VMware’s transition from perpetual licensing to a subscription-based model reflects the prevailing industry trend toward subscription models in cloud consumption. Under this new framework, organizations will acquire per-core subscription licenses. This shift not only signifies the end of perpetual license sales but also impacts Support and Subscription (SnS) renewals for perpetual offerings, as well as HPP/SPP (Hybrid Purchasing Program and Subscription Purchasing Program) credits.  This marks a material shift in the way organizations purchase and consume VMware products.

Additionally, with the relaunch of the VMware Cloud Service Provider Program (VCSP) and the new Broadcom Partner Advantage program, it’s more important than ever to find the right partner that can help your organization navigate the changes.

Financial and Operational Implications of Broadcom VMware Licensing Changes

Broadcom’s overhaul of VMware licensing has brought change to the business world. These changes alter costs and demand strategic planning from IT departments and other executive leaders. For businesses leveraging VMware solutions, understanding these shifts is crucial to maintaining efficient operations and controlling costs.

One of the most immediate impacts of these licensing changes is on financial planning. The shift from perpetual to subscription-based licensing marks a significant change in how customers will access and pay for VMware services. The transition aims to simplify the product portfolio and provide more predictable spending models for customers. As perpetual licenses are phased out, customers are encouraged to update their existing licenses for subscription-based ones, which offer benefits like continuous innovation and faster value realization. The new licensing model, however, could also lead to increased costs.

Businesses must navigate these changes, at the same time tapping into new features and benefits from VMware, while ensuring performance, continuity, and efficiency.

How to Adapt to the New Broadcom VMware Licensing Model?

Adapting to these changes is ultimately about optimizing your VMware investments. Here’s how TierPoint can help:

  1. Perform a Comprehensive License Audit: We start by assessing your current VMware usage to ensure compliance with and identify optimization opportunities under the new model.
  2. Develop a Transition Roadmap: Our team can craft a tailored plan, considering both short-term adjustments and long-term strategic alignment with the new licensing terms.
  3. Use Financial Incentives for Transition to Broadcom: We’ll guide you in capitalizing on any available incentives offered by Broadcom during this transition period, helping to mitigate financial impacts.
  4.  Leverage Expert Advice for Information on Further Changes: With ongoing changes and updates, staying informed is crucial. TierPoint offers expert advice to navigate these complexities, ensuring that your VMware deployment continues to align with your business objectives.

Working with a VMware by Broadcom Trusted Pinnacle Partner

Partnering with a Trusted Pinnacle Partner like TierPoint offers numerous benefits. Our deep knowledge of and close working relationship with VMware by Broadcom ensures you have the latest insights and support. This partnership means you can trust us to help you navigate licensing changes effectively and leverage VMware technologies to their fullest potential.

Pinnacle is the highest program level in the Broadcom Advantage Partner program. Pinnacle partners are Broadcom’s most invested and strategic partners, boasting extensive certifications, a track record of significant sales and service achievements, and broad geographical coverage. Holding Pinnacle status signifies a partner’s deep technological know-how and proficiency in addressing the most intricate customer issues. Broadcom works in close partnership with Pinnacle partners, including co-selling to mutual customers, to provide the foundational technology that drives the digital landscape.

Choose TierPoint as Your Cloud Agnostic Trusted Advisor

TierPoint is a champion for untangling hybrid complexity so our customers can experience a digital breakaway with their business strategies. As a cloud agnostic advisor and service provider, we offer guidance and support across various cloud platforms, ensuring that your cloud strategy is aligned with your business needs, regardless of the underlying technology. We also have a lineup of managed cloud capabilities, backed by a team with extensive certifications, including both public and private cloud options, each with security and backup services.

In conclusion, while the Broadcom VMware licensing changes present challenges, they also offer opportunities. With TierPoint’s expertise and support, you can navigate these changes confidently, helping ensure your VMware deployment continues to drive value for your business.

Ready to navigate the new VMware landscape? Contact TierPoint today to leverage our expertise and transform these challenges into opportunities for growth and innovation.

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