VMware kills off perpetual licenses, only subscriptions remain

VMware kills off perpetual licenses, only subscriptions remain

Broadcom has taken another step in its reorganizing of VMware. The sales policy has been shaken up; as expected, the company will stop offering perpetual licenses. In the future, it will only be possible to purchase licenses in a subscription form. Right now, we’re still waiting for those to become available.

In itself, this move by Broadcom is not very surprising. After all, if VMware had not been acquired, they most likely would have taken this step as well. Its license subscriptions had existed for some time and there was already talk that perpetual would eventually disappear. Broadcom has now made this final. All of Broadcom’s VMware solutions will soon be available in subscription only. For parts that will be spun off, it will be up to the new owner to determine pricing policies there.

VMware Cloud Foundation and VMware vSphere Foundation

In addition, Broadcom has chosen to simplify the subscriptions a fair amount. There will be two bundles, specifically VMware Cloud Foundation and VMware vSphere Foundation. VCF is already a well-known bundle, vSphere was for now sold separately with all addons. Many of these will now be available in the VSF bundle.

Cheaper or more expensive?

We spoke briefly with SoftwareOne to find out if they had any visibility into what this now means for customers. Will VMware now become a lot more expensive? It’s one of the first topics that customers will mention. They state that pricing of the new subscriptions will be based on the number of CPU cores. In some cases that seems slightly more favourable, in others slightly unfavourable. Up to 16 cores, customers seem to be getting a benefit from the new pricing structure. Above that amount, customers end up paying more than before.

VMware subscriptions not yet available

SoftwareOne states that the new subscriptions are not available at this time. Some documentation has been shared, but nothing more. At this time, VMware partners cannot get quotes for new licenses. Broadcom had communicated in early December that this wouldn’t be possible for a week, but it has now been two weeks. As of right now, new customers cannot get VMware licenses, but existing customers cannot renew either.

Normally at SoftwareOne, they see some kind of final sprint in December in terms of sales. That is impossible at the moment.

Customers with perpetual licenses

Customers currently using perpetual VMware licenses can just keep using them until the end date. When the end date arrives, the VMware environment will of course continue to work, it’s perpetual after all, but the support contract with VMware will end by that point. Updates and support will then become impossible, for which customers will have to take out a new license. That new license will no longer be perpetual, but take on one of the new subscription forms.

It is still unclear whether the prices for existing customers going from perpetual to the subscription model will be the same as the prices for new customers. That remains to be seen. As soon as Broadcom expects more clarity on the subscriptions, we will come back to this with a new article.

Competition reaps rewards from ambiguity

VMware’s competitors are at least at an advantage in this situation. Because Broadcom has closed the opportunity for bids and there is now ambiguity about pricing, they are opening the door wide for competitors to confirm Broadcom’s less rosy image. Broadcom has intervened harshly in previous acquisitions, raising prices, in order to also get more returns from the acquisition as quickly as possible. For a company like Nutanix, December is also likely to be one of the best of the year.

Tip: Liveblog Broadcom/VMware: perpetual VMware licenses no longer available