One year on from Broadcom’s acquisition of VMware, it is clear that many challenges remain. SME customers are drawing their own conclusions and are increasingly migrating to VMware alternatives.
Unclear processes and lack of transparency
A major source of frustration is billing. By the end of 2024 – almost a year after the acquisition – many customers had only just received their first invoices for their VMware usage. Broadcom had apparently struggled to keep track of the new licensing models and the actual usage of existing licences. The move to usage-based billing, coupled with a consolidated sales and billing model, has been particularly detrimental to small and medium-sized customers, who are apparently not a top priority for Broadcom’s new enterprise strategy.
SMEs and cloud providers at a disadvantage
While large customers continue to receive individual support and tailored solutions, many IaaS providers and SMEs are coming under increasing pressure. They face the challenge of moving to new licensing models based on a per-core approach, with a minimum requirement of 16 cores per CPU – regardless of their actual needs.
This results in disproportionately high costs, especially for smaller deployments. In addition, many smaller customers report price increases of up to 1,200%. This is due to the bundling and consolidation of functionality that is usually oversized and does not meet the actual needs of this target group.
The support situation has also deteriorated. Support requests are often handled by channel partners or distributors, resulting in longer response times and poorer overall service quality. These changes have resulted in many SMBs feeling that they are receiving poorer support and are actively looking for alternatives to VMware.
Technical responses to rising licensing costs
Many customers have strategically re-architected their infrastructure to reduce licensing costs. Clusters have been restructured, workloads consolidated and VMs distributed across as few hosts as possible. Redundancy is being used more selectively – for example, through hot standby configurations where unused hosts only become active in an emergency. This is technically possible, but often more complex to implement – however, given the licensing structure, it is often the only economic option.
| Measure | Goal / Effect | Tools | Challenges |
|---|---|---|---|
| Cluster Consolidation | Reduction of host count and licenses | Analysis with vRealize Ops, RVTools, manual consolidation | Increased density may complicate failover strategies |
| Host Sizing & Core Optimization | Maximum performance per licensed core | Selection of efficient CPUs, vCPU tuning, CPU pinning | Higher hardware costs, more complex sizing |
| Cold/Hot Standby instead of N+1 | Reduction of licensed standby hosts | Standby only when needed, monitoring/scripting solutions | Manual intervention required, longer recovery time in case of failure |
| Elimination of HA/DRS | Avoidance of uncontrolled host utilization | Disable HA/DRS, static VM placement | Lower availability, more operational effort |
| On-Demand Virtualization | VMs active only when needed – saves resources & licenses | Automated VM start/stop (e.g., via PowerCLI, Ansible) | Limited testing availability, scripting required |
| Partial Migration to Bare-Metal | Relieves the virtualized environment | Deployment on physical servers for specialized workloads | Lower flexibility, higher management overhead |
| Containerization of Selected Services | Avoidance of classic VM licensing | Kubernetes / OpenShift for new or migrated services | Expertise required, re-architecture needed |
Alternative solutions on the rise
At the same time, interest in other virtualisation solutions is growing. Organisations are increasingly looking at specific VMware alternatives that are better suited to their needs from an economic, technical and strategic perspective. In particular, the following platforms are being evaluated or are already in production:
- Proxmox VE: Open source, stable and with a rapidly growing community – particularly attractive to organisations with an affinity for Linux.
- Microsoft Hyper-V: An established alternative for Windows-centric environments with solid integration into existing Microsoft ecosystems. Hyper-V remains a reliable choice, especially in Microsoft infrastructures, thanks to its tight product integration and long-term support strategy.
- Red Hat OpenShift Virtualisation: OpenShift has expanded its virtualisation capabilities. For those who already rely on containerisation, the OpenShift world increasingly allows workloads to be run in a virtualised environment.
ESXi loses ground
The once almost unassailable position of VMware ESXi is slipping. More and more organisations are migrating all or part of their infrastructure to VMware alternatives or moving workloads to other architectures. After a year of experience with the new licensing models, we can conclude that Broadcom has failed to gain the trust of many VMware customers, opening up the market to new and existing competitors.
The sustainability of the trend towards VMware alternatives is already becoming clear. Many organisations have already reconsidered their virtualisation strategy – others are in the process of doing so.
Our experts can help you evaluate your options – impartially, solution-focused and with an eye on what fits your IT landscape in the long term.