VMware after Broadcom: what the new licensing costs mean for SMEs
Since the Broadcom takeover, VMware is subscription-only and often much more expensive. What options SMEs have, from Proxmox to a managed private cloud.
Since Broadcom took over VMware in late 2023, the licensing model has changed fundamentally. For many SMEs that means noticeably higher costs for the same virtualization.
What changed?
Broadcom abolished perpetual licenses and moved to subscriptions only, merged individual products into larger bundles and switched billing to processor cores, often with minimum quantities. ESXi is no longer sold as a standalone product; it is part of subscription packages such as VMware vSphere Foundation or VMware Cloud Foundation. The bottom line: many businesses now pay significantly more.
And the free ESXi?
The free ESXi was discontinued in early 2024, but has been available again since April 2025 (as vSphere Hypervisor 8, a free download via the Broadcom portal, registration required). For a lab, tests or a single edge host, that is a welcome return. As the basis for a production SME environment, however, it is barely suitable: the free version cannot be attached to vCenter, so there is no central management, no vMotion, no high availability. On top of that come limits such as a maximum of 8 vCPUs per VM and no vendor support. Anyone wanting to run more than one host in production cannot avoid a paid subscription.
What this means for SMEs
Higher and harder-to-plan operating costs, stronger lock-in and the uncomfortable question of whether the current virtualization strategy still adds up. Broadcom has since walked back the licensing minimum that had been raised to 72 cores, yet smaller environments in particular still often end up paying more under the new model.
What options are there?
- Stay on the new VMware subscription if the feature set and ecosystem are worth the price.
- Move to Proxmox VE, a mature open-source virtualization without per-core licensing costs.
- Move the workloads into a managed private cloud, where the provider handles hypervisor and licensing and you pay a fixed monthly price.
What to watch when switching
A migration needs planning: workload compatibility, maintenance windows, tested backups and a clear rollback path. With experience, the move runs with no data loss and minimal downtime.
The point
Virtualization should not be a budget trap. The Broadcom changes are a good reason to question your own platform, and there are proven alternatives.
How we solve this for you.
We run your virtual servers on VMware or Proxmox as a managed private cloud, with a fixed monthly price instead of licensing surprises. You no longer have to wrestle with Broadcom's bundle and core maths, or with which features sit in which subscription, we take that over.
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