Broadcom Should Be a Warning to Every Software Company
Broadcom serves as a public example of what happens when you completely aggravate your customer base. And the horrible thing is, the people who are really affected by this are not the enterprise-and-beyond companies. It's small, medium, and large businesses that downsized.
VMware has been the tried-and-true virtualization platform in pretty much every company. The pricing was good. The support was good, and the virtualization stack is solid. That's still true today, with versions 8 and 9 slowly being adopted by larger corporations.
What Broadcom Actually Did
When Broadcom acquired VMware in November 2023 for $61 billion, the largest enterprise software acquisition in history, the IT industry didn't hold its breath. We knew from Broadcom's past actions what was coming. What followed was one of the most aggressive and, frankly, predatory pricing overhauls I've ever seen in enterprise software. We expected pricing to change, but we didn't expect this nonsense and greed.
Here's what changed:
Perpetual licenses: gone. As of January 22, 2024, Broadcom ended supporJanuary 22etual VMware licenses. Everything is now subscription-only, with 1-, 3-, or 5-year terms. If you're on a perpetual license today, your support contract expires by October 2027. After that, you either subscribe to the new pricing or get out.
Product portfolio: gutted. VMware's catalog went from roughly 8,000 SKUs and 168 bundles to essentially two products: VMware Cloud Foundation (VCF) and vSphere Foundation (VVF). Individual products like standalone vSAN and NSX? Discontinued. You get the bundle whether you need everything in it or not. That's not simplification; it's a forced upsell.
Pay-as-you-go: dead. Three-year contracts only. No flexibility, no options.
72-core minimum purchase. Starting April 10, 2025, the minimum license order will increase from 16 cores to 72 cores per product. Running a single-socket server with 8 cores? You're paying for 72. A 3-host cluster with 36 total cores? Still 72. This hits small and mid-size organizations the hardest—the very people who can least afford it.
20% late renewal penalty. Miss your subscription anniversary date, and Broadcom charges a 20% surcharge on top of your first-year subscription cost. It's pure pressure to keep you locked in and afraid.
Opaque, inconsistent quoting. There is no public price list in any meaningful sense. Two organizations with identical hardware footprints can get quotes that differ by tens of thousands of dollars, with no explanation. I'll get into this more below, because this one really gets me.
What Makes Broadcom a Scumbag Company
You cannot get reliable pricing. And there's probably even a law against what they're doing. But to me, it's downright scumbag maneuvering.
If you talk to someone with an identical setup — same core count, same node count, same everything — the price they got and the price you got will likely be different. In Broadcom's world, none of that matters because they want you to have a minimum of 72 cores, regardless of what you're actually running. The price for a four- or five-node environment can vary among customers from $50,000 to $85,000, and we don't have an explanation for the gap.
You can't budget for this. You can't plan for this. If you want to know what your renewal will cost, you'll receive a quote within 2–3 months, and you'll have 30 days or less to accept it. That's not a business relationship — that's a hostage negotiation.
The Real Numbers People Are Seeing
The inconsistency isn't just anecdotal Reddit complaints. It's been documented across customer segments:
Opening quotes of 2x–5x are common. With aggressive negotiation and a credible migration alternative, some customers have gotten down to 1.3x–2x —, but that takes months of leverage-building, alternative-vendor quotes, and sometimes even threatening to leave entirely. Most small and mid-market shops don't have the time or resources to run that play.
The list price for VCFist is roughly $240–$250 per core per year, based on Q1 2025 community-verified quotes. Your negotiated rate will vary — and that's exactly the problem. There is no standard. There is no fairness. There's whatever Broadcom thinks they can get from you.
And it gets worse: there are documented cases in which Broadcom quoted the above-published list price to customers they felt they could pressure. That's not a pricing strategy — that's extortion with a software license attached.
The Lawsuits and Regulatory Fallout
This isn't just grumbling on forums. There are formal legal and regulatory actions underway:
AT&T sued Broadcom in federal court, alleging price increases of up to 1,050%. The case settled out of court in December 2024 with undisclosed terms — but that filing is a public record, and the numbers are in it.
Germany's VOICE IT customer association filed a formal complaint with the European Commission.
ECCO (European Cloud Competition Observatory) filed an action with the General Court of the European Union challenging the EC's initial approval of the VMware acquisition.
Cease-and-desist letters were sent to organizations still running perpetual licenses without active subscriptions. That's right — Broadcom is threatening customers who are running software they legally own.
Broadcom sued Siemens' US operations as part of a broader legal pressure campaign against large customers who won't roll over.
ECCO called Broadcom's financial model "legally and ethically flawed" and stated outright that current practices appear to violate EU competition regulations. Germany, the EU, and multiple customer advocacy groups are all pushing back simultaneously. That doesn't happen unless something is genuinely broken.
The Industry Consensus
We've agreed as an industry: Broadcom does not want us — enterprise customers with smaller workloads — using their platform. That's abundantly clear.
The platform was built on customer service and stability. I'm in the same boat — I ran VMware for years in my homelab and professionally before switching to Proxmox after Broadcom made it obvious they didn't want mid-market customers. The migration wasn't painless. Exporting VMs as OVAs, tweaking network drivers, relearning storage and backup concepts — it takes real time. But having full control back without a predatory vendor holding your renewal hostage? Worth every hour.
I'm not alone. Alternatives like Proxmox VE, Nutanix, Microsoft Hyper-V, and Azure Stack HCI are seeing massive adoption spikes directly because of Broadcom. RunZero noted a significant increase in the number of deployed Proxmox VE systems over the last year. vSphere 7 reached the end of support in October 2025, forcing even more organizations to make a decision they'd been delaying.
The 72-core minimums, the forced bundles, the late renewal penalties, the opaque quoting — none of this is accidental. It's a systematic squeeze on the mid-market: the organizations with the least negotiating leverage, the tightest budgets, and the fewest resources to run a migration project under time pressure.
Broadcom built this on the backs of customers who believed in VMware. The platform was built on trust and stability. They burned it for margin.
I honestly hope it comes back to bite them.
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