Leaving VMware in 2026: the 7-step cost model to run before your Broadcom renewal

Summary. Broadcom stopped selling perpetual VMware licences on 11 December 2023 and collapsed a catalogue of about 8,000 SKUs into four core offerings, according to Broadcom CEO Hock Tan on the company's Q2 2024 earnings call. Gartner research vice president Paul Delory told the firm's Sydney conference on 12 May 2026 that VMware licensing bills "typically rise by 300 to 400 percent" under the current model. Independent analyst firm Virtified, surveying 450 IT professionals across 14 countries between December 2025 and February 2026, found that 48% of VMware customers intend to reduce their footprint by 2028. The alternatives publish real numbers where Broadcom does not: Proxmox lists subscriptions at €120 to €1,100 per CPU socket per year, and Microsoft bills Azure Local per physical core, daily. Meanwhile vSphere 8 support ends in October 2027, which is the date that actually forces a decision.

The mistake we see most often is treating this as a procurement negotiation when the renewal quote arrives. By then you have weeks. The estate assessment that tells you whether an exit is even feasible takes months, and the one large migration with published numbers, Cleveland Clinic's, is 19 months into a three-year window with 450 of more than 10,000 virtual machines moved.

What actually changed, in Broadcom's own words

The licensing change is not a rumour or a reseller interpretation. Krish Prasad, then senior vice president and general manager of Broadcom's VMware Cloud Foundation division, wrote on 11 December 2023: "As part of our transition to subscription and a simplified portfolio, beginning today, we will no longer sell perpetual licenses. All offerings will continue to be available as subscriptions going forward."

The same announcement ended Support and Subscription renewals for perpetual products, while confirming that "customers can continue to use perpetual licenses that they've purchased for products." That distinction is the crux of every renewal conversation in 2026: you may keep running what you own, but you cannot buy support for it, and you cannot get vSphere 9 on a perpetual licence.

VMware's January 2024 portfolio notice named the two survivors: "VMware Cloud Foundation and VMware vSphere Foundation, available as subscription software only, are now our two new offers." Roughly sixty standalone products, including vSphere Enterprise Plus, vSAN, NSX, HCX, Site Recovery Manager and the free vSphere Hypervisor, reached end of availability as separate purchases. Smaller estates retain vSphere Standard and vSphere Essentials Plus Kit.

Three mechanics decide your bill.

Core counting. Broadcom's knowledge base article 313548 states the rule plainly: "You must license a minimum of 16 physical cores for each CPU (physical processor) in your ESXi hosts, even if a CPU has fewer than 16 cores." The VMware Cloud Foundation program documentation from June 2024 adds a detail that catches people out: "Each Core on the Server must be licensed, including Cores deactivated by the BIOS." Disabling cores to save money does not work.

A larger 72-core floor was communicated to customers by at least one distributor in March 2025 and reported by The Register at the time, but Broadcom did not publicly confirm it and the company's own live documentation still specifies 16. Model against 16, and ask your reseller to put whatever number they quote in writing.

Term length. The European Cloud Competition Observatory reported in May 2025 that the bundles are "only available on subscription with a three-year minimum commitment", and that Broadcom "entertains discounts of 30 to 50 percent on the price hike" when customers accept three-year fixed contracts. That discount is the single largest lever in the negotiation, and it is also what locks you in for the period in which you would otherwise have migrated.

No published list price. Broadcom does not publish VCF, vSphere Foundation or vSphere Standard list prices, and has not since well before the acquisition. Every per-core figure circulating online traces back to licensing consultancies rather than to Broadcom. Treat any number you have not seen on your own quote as unusable for planning.

The pressure is not only commercial

Broadcom closed its VMware Cloud Service Provider partner programme, notifying partners that it "will not be renewing any of your VCSP partner contracts with Broadcom after 26 January 2026" and encouraging them to close open opportunities by 31 March 2026. For Indian and European enterprises that bought VMware capacity through a local service provider rather than directly, that changes who you buy from as much as what you pay.

European trade bodies including CISPE, Beltug, Cigref, VOICE and CIO Platform Nederland have asked the European Commission to review Broadcom's licensing practices, and the Commission confirmed receipt of their joint letter dated 10 July 2026. Broadcom has said it "continue[s] to be committed to investing significantly in our European VMware Cloud Service Provider partners". No regulatory outcome has been decided, so treat this as context for timing rather than as a reason to wait.

What the migration market actually looks like

Signal	Figure	Source and date
Customers planning to reduce VMware footprint by 2028	48% of respondents	Virtified, 450 IT professionals, 14 countries, Dec 2025 to Feb 2026
Biggest stated migration challenge	25% cite finding a suitable alternative	Virtified, same survey
Gartner workload forecast	35% of workloads on a different platform by 2028	Paul Delory, Gartner, 12 May 2026
Typical licensing increase	300% to 400%	Paul Delory, Gartner, 12 May 2026
Customers already using, planning or considering alternatives	98% for at least part of the estate	Rimini Street-sponsored survey, 110+ customers, published 11 Dec 2024
Pre-acquisition customers moved to VCF	Fewer than 1% of about 350,000	The Register, 5 May 2026

Read those last two rows together, because they are the honest picture. Nearly everyone is looking. Almost nobody has finished. The 98% figure is also the weakest number in the table: it was sponsored by a third-party support vendor, sampled just over 110 customers, dates from late 2024, and its actual wording covers customers "already using, planning to use or considering alternatives for at least a part of their VMware estate". The 2026 Virtified figure of 48% is the better one to plan against.

Michael Warrilow, chief researcher at Virtified, summarised the shift on 26 March 2026: "The VHCI market is no longer a one-horse race."

Delory's warning at the Gartner conference is the other half of the argument, and it belongs in any board paper: "VMware is betting that you can't move off and they can jack the price way up. That may be a good bet. But don't make it easy."

The 7-step cost model

Run these in order. Steps 1 to 3 take a fortnight with the right access. Steps 4 to 7 are where most estimates go wrong.

1. Count what you are actually licensed for, not what you run. Inventory physical sockets, physical cores per socket, and cores disabled in BIOS. Apply the 16-core-per-CPU floor to every host. A fleet of two-socket, 12-core servers licenses as 32 cores per host, not 24. This single correction moves most estimates by double digits.

2. Separate the estate into three buckets. Workloads that can move to a different hypervisor as-is; workloads that need re-platforming because of storage, networking or clustering dependencies; and workloads that should go to public cloud or be retired instead of migrating at all. Ali Rey, group head of technology platforms at Emirates NBD, drew the line between the two hard cases precisely: "When you go to containers, you're rearchitecting [your apps] ... when you go to KubeVirt, it's more of a re-platforming. But you have to think about, 'How do I manage my storage? How do I manage my network?' ... It's a completely different thing."

3. Price the alternatives against your real socket and core counts. Only two of the major options publish list prices, which is itself a planning input.

4. Add the costs that are not licence fees. Hardware refresh forced by a new hypervisor's compatibility list. Backup and disaster-recovery tooling that only supports vSphere. Monitoring agents. Staff training. The third-party ISV whose support matrix names ESXi and nothing else. In our experience this bucket is routinely larger than the licence saving in year one.

5. Model three years, not one. The three-year minimum commitment on the VMware side and the three-year subscription terms most alternatives quote make any single-year comparison meaningless. Nutanix's own average contract duration was 3.4 years as of its Q3 FY2026 results.

6. Put a date on the deadline that binds. vSphere 8 support ends in October 2027. If your renewal runs past that, you are choosing between a version upgrade and a platform migration, not between renewing and not renewing.

7. Cost the option you keep. A negotiated three-year VMware renewal with a 30% to 50% discount on the increase is a legitimate outcome, and it is what Cleveland Clinic did: it renewed a three-year contract to buy time to move. Model it as one of the options, not as failure.

What the alternatives publish

Platform	Published pricing basis	What is verifiable in 2026
Proxmox VE	Per physical CPU socket per year	€1,100 Premium, €550 Standard, €370 Basic, €120 Community; one-year term
Microsoft Azure Local	Per physical core, billed daily	60-day free trial; multi-threading not counted; Windows Server guest subscription $23.3 per physical core per month
Red Hat OpenShift Virtualization	Per OpenShift subscription	Migration toolkit for virtualization included; free self-service migration assessment
Nutanix	Subscription, per node or per core	30,000+ customers as of April 2026; 31,710 customers and $2.43bn ARR at Q3 FY2026
VMware Cloud Foundation	Per core, 16-core minimum per CPU	No published list price; three-year minimum commitment

Proxmox is the most transparent of the group, and its unit of measure matters: "The Proxmox subscription is per physical CPU socket occupied on the motherboard and actually in use. Sockets, not cores: It doesn't matter if your CPU has 4 cores or 64 cores; it still only counts as one socket." On dense modern hosts that pricing basis is the whole argument.

Microsoft prices Azure Local the opposite way. Its documentation states billing is "for all the physical processor cores on your system on a daily basis as long as your system is registered with the Azure Local service", and that "when cores are counted, multi-threading is not included in the count." Existing Windows Server Datacenter licences with active Software Assurance can activate Azure Hybrid Benefit, which waives the host service fee.

Red Hat's route runs through KubeVirt. OpenShift Virtualization manages traditional virtual machines under the Kubernetes control plane, and the migration toolkit for virtualization "simplifies the process of migrating VMs from VMware vSphere to Red Hat OpenShift Virtualization" and is "included with your Red Hat OpenShift subscription". Two named migrations give the shape of it: Emirates NBD moved more than 9,000 virtual machines at a rate of up to 200 per night, and now runs all but three of 350 applications on OpenShift. Cleveland Clinic expects 50% lower total cost of ownership when its move completes.

Nutanix has the strongest tooling reputation in the group, and the assessment comes from a critic rather than the vendor. Delory of Gartner told the same Sydney conference that HCI vendors, "with the exception of Nutanix, have weak migration tools." Nutanix's own migration utility is Nutanix Move.

The number that should make you cautious

Ian Willis, executive director of IT infrastructure at Cleveland Clinic, described the pace of a real migration on 15 May 2026: "We've proven we can do it, we've proven we can move. We've got 19 months and counting now [before the next renewal], and we're going to push, we're going to try to get every single virtual machine and workload moved over."

That is a well-resourced organisation, 19 months in, with 450 of more than 10,000 virtual machines migrated. Any payback figure quoted to you in months rather than years deserves a source. We could not find a credible, named study behind the 9-to-14-month break-even figure that circulates widely on consultancy sites, and the ranges those sites give contradict each other. Use the Cleveland Clinic case as your reference class instead of a payback range.

The other caution is Delory's: migration projects "require extensive assessment of every application in a fleet". Step 2 of the model above is not optional paperwork. It is the step that determines whether the project is 6 months or 30.

India-specific considerations

Indian enterprises are running this decision against an unusually fast infrastructure backdrop. India had 271 data centres as of January 2026, added 387 MW of IT capacity during 2025 against 191 MW in 2024, and has a project pipeline of roughly $90 billion, according to a Rubix Data Sciences report covered by Business Standard on 21 July 2026. Installed capacity is projected to rise from 1.5 GW in 2025 to 6.5 GW by 2030.

Three things follow for an Indian CIO facing a VMware renewal.

First, the capacity build changes the co-location versus refresh maths. If your VMware exit also implies a hardware refresh, the same report notes that data-centre construction costs in India run 30% to 40% lower than in China and the United States, which makes a co-located landing zone more attractive than it was two years ago.

Second, the closure of the VMware Cloud Service Provider programme matters more here than in markets where enterprises buy direct. Many Indian mid-market estates were bought through a local provider. Confirm in writing who your counterparty will be at renewal.

Third, data residency shapes the shortlist. Under the Digital Personal Data Protection Act 2023, personal data processing carries obligations that are simpler to evidence when the hypervisor, the storage and the management plane all sit in an Indian region you control. That favours on-premises or Indian-region alternatives over a management plane hosted elsewhere, and it is worth settling before you shortlist rather than after. Our FinOps guide for Indian teams cutting cloud spend covers the commitment-sizing side of the same decision, and our note on FinOps across AWS, Azure and GCP in India covers the regional price differences.

How we run this engagement

eCorpIT was founded in 2021 and works from Gurugram. On a VMware exit assessment our teams do the following, in this order.

We start with the estate inventory and the licence position, because the 16-core floor and the BIOS-disabled-core rule change the baseline before any vendor comparison is meaningful. We then classify workloads into move-as-is, re-platform and retire-or-relocate, and we test the classification by moving a representative sample rather than by reading a spreadsheet. We build the three-year model across the shortlisted platforms and the negotiated-renewal option, using your own quotes rather than published estimates, since Broadcom does not publish list prices. We then run a pilot migration on a non-critical cluster to produce a measured per-VM effort figure, and only after that do we produce a migration plan with a date.

Our engineering organisation is CMMI Level 5 certified, ISO 27001:2022 certified and MSME registered, and we hold partnerships with AWS, Microsoft and Google. We design target architectures aligned with Digital Personal Data Protection Act 2023 requirements rather than claiming certification on your behalf.

Typical engagement shape: a fixed-scope assessment covering inventory, classification and the three-year model, followed by a pilot migration, followed by a phased programme delivered by a senior-led team. Related work is described in our cloud migration and modernisation service and our cloud FinOps managed service.

FAQ

Can I still buy a perpetual VMware licence?

No. Broadcom announced on 11 December 2023 that it would no longer sell perpetual licences and would end Support and Subscription renewals for perpetual offerings. Existing perpetual licences may still be used, but they cannot be renewed for support, and current versions such as vSphere 9 are not available on that basis.

How does Broadcom count cores for licensing?

Broadcom requires a minimum of 16 physical cores licensed for each CPU in an ESXi host, even where the processor has fewer than 16 cores. The Cloud Foundation program documentation adds that every core on the server must be licensed, including cores deactivated in the BIOS, so disabling cores does not reduce the bill.

How much are VMware renewals going up?

Gartner research vice president Paul Delory stated on 12 May 2026 that licensing bills typically rise by 300 to 400 percent under Broadcom's model. Individual outcomes vary widely and Broadcom publishes no list prices, so the only figure that matters for your planning is the one on your own written quote.

What deadline actually forces a decision?

Support for vSphere 8 ends in October 2027. If your renewal term runs past that date, the choice is between upgrading to vSphere 9 under the subscription model and migrating to another platform, rather than between renewing and doing nothing. That deadline is what should set your assessment start date.

Which alternatives publish real prices?

Proxmox and Microsoft do. Proxmox lists subscriptions from €120 to €1,100 per CPU socket per year on a one-year term, priced per socket regardless of core count. Microsoft bills Azure Local per physical core on a daily basis, excludes multi-threading from the count, and offers a 60-day free trial.

How long does a large migration take?

Longer than most estimates assume. Cleveland Clinic, with more than 10,000 virtual machines, reported 450 migrated at 19 months before its next renewal. Emirates NBD moved more than 9,000 machines at up to 200 per night. Payback figures quoted in single-digit months lack a credible named study behind them.

Is renewing with Broadcom ever the right answer?

Sometimes. The European Cloud Competition Observatory reported that Broadcom entertains discounts of 30 to 50 percent on the increase for three-year fixed contracts. Cleveland Clinic renewed a three-year contract specifically to buy migration time. Model the negotiated renewal as a genuine option alongside the alternatives.

What changed for customers buying through a service provider?

Broadcom notified VMware Cloud Service Provider partners that it would not renew their contracts after 26 January 2026, and encouraged them to close open opportunities by 31 March 2026. Enterprises that bought VMware capacity through a local provider rather than directly should confirm in writing who their counterparty will be at renewal.

How eCorpIT can help

eCorpIT builds the estate inventory, the workload classification and the three-year cost model that a VMware renewal decision needs, then proves the numbers with a pilot migration before anyone commits to a programme. Our senior-led engineering teams are CMMI Level 5 and ISO 27001:2022 certified and MSME registered, and we design target architectures aligned with Digital Personal Data Protection Act 2023 requirements. If your renewal falls before October 2027, the assessment should start now rather than when the quote arrives. Talk to us through /contact-us/.

References

1. Krish Prasad, VMware by Broadcom business transformation, Broadcom, 11 December 2023.
2. Counting cores for VMware Cloud Foundation and vSphere Foundation, Broadcom knowledge base article 313548.
3. VMware Cloud Foundation specific program documentation, Broadcom, June 2024.
4. Broadcom's VMware bundling and licensing changes, CIO Dive, 13 June 2024, quoting Hock Tan on the Q2 2024 earnings call.
5. Quit VMware and you'll emerge with more complex and less capable infrastructure, The Register, 12 May 2026, quoting Paul Delory of Gartner.
6. 48% of VMware customers plan to reduce usage as competitors gain ground, Virtified research release, 26 March 2026.
7. European cloud body ECCO says Broadcom licensing unfair, The Register, 22 May 2025.
8. Broadcom bulldozes VMware cloud service providers with March deadline, The Register, 31 January 2026.
9. VMware claims Cloud Foundation on track, The Register, 5 May 2026.
10. VMware vSphere 8 end of support challenges, Computer Weekly, 3 February 2026.
11. Enterprises fleeing Broadcom move to OpenShift Virtualization, TechTarget, 15 May 2026.
12. Migrate from VMware to OpenShift Virtualization, Red Hat.
13. Proxmox Virtual Environment pricing, Proxmox Server Solutions.
14. Azure Local pricing, Microsoft.
15. Nutanix accelerates service provider growth with new cloud capabilities and migration programs, Nutanix, 7 April 2026.
16. Nutanix Q3 FY2026 results, Blocks & Files, 28 May 2026.
17. Five cloud business groups urge EU interim measures against Broadcom, SRN News, 14 July 2026.
18. India's installed data centre capacity to rise fourfold by 2030, Business Standard, 21 July 2026.
19. New survey of VMware customers reveals strong desire to maximize the value of perpetual licenses, Business Wire, 11 December 2024.

Last updated: 4 August 2026.