Why VMware renewals need a workload review

VMware’s price changes should end automatic renewal

A VMware renewal now demands a clear decision about which workloads, the applications and services running on an organization’s infrastructure, justify the cost of staying. Broadcom’s pricing and licensing changes have made that decision more urgent, but moving also takes money, staff training, and time that could go to other projects. Infrastructure and finance leaders therefore need to compare both options before the contract deadline narrows their choices.

The pressure to reconsider is widespread. Nearly three years after Broadcom bought VMware, a survey commissioned by third-party support vendor Rimini Street found that 90% of current VMware customer CIOs were considering alternatives because of higher licensing costs. Rimini Street sells support to customers seeking alternatives to VMware’s own support arrangements, so it benefits commercially from that demand.

For customers considering a change, the practical question is which parts of their environment would benefit from moving. VMware’s virtualization software divides physical computing resources into separate virtual machines, each able to run its own operating system and applications. Years of dependence on that software make replacement a substantial undertaking, so the decision must account for the work each platform supports.

Commercial changes are driving the review

The review starts with changes to both price and purchasing terms. Since taking over VMware in late 2023, Broadcom has shifted from perpetual licenses, which allow continued use after a one-time purchase, toward subscriptions and revised pricing, often resulting in increases of 50% to 200%. Some customers have received quotes implying increases of 1,500%, putting pressure on them to examine alternatives before accepting a new contract.

Price is part of a broader concern about purchasing terms. Over half of respondents in the Rimini Street-commissioned survey identified the end of perpetual license support as a major reason for evaluating alternatives. Keith Costello, Rimini Street’s EVP and COO, also reports frustration with pressure to adopt VMware Cloud Foundation, an integrated platform for running and managing private cloud infrastructure and connecting it with public cloud services. Customers must therefore assess what the package includes alongside its cost.

Costello says customers can value the software while objecting to those terms: “What I’m hearing is that they’re not dissatisfied with the product at all,” he says. In his account, the available commercial choices fit poorly with customers’ budgets and migration schedules. His employer benefits when customers seek independent support arrangements; a VMware spokesman declined to respond to the survey findings.

The budget problem gets harder when years of dependence limit a customer’s options. Costello gives the example of an organization that has relied on a major technology for 15 years and then faces a 3x price increase. He sees this exposure across technology suppliers, beyond VMware and virtualization. But gaining freedom from a supplier still requires an alternative whose benefits justify the expense of reaching it.

Leaving requires an investment before it produces savings

The expense of reaching an alternative can delay the savings from leaving. Joe Locandro, Rimini Street’s CIO, says recovering the cost of changing vendors can take three to five years, even with VMware’s price increases included. That assessment also serves Rimini Street’s commercial interest in supporting existing installations: customers who retain VMware while weighing their options are potential buyers of third-party support.

Recovering that investment starts with spending before any savings arrive. An organization must set up the replacement environment and prepare its staff to operate it, so comparing recurring platform charges captures only part of the decision. Locandro identifies retraining as a cost CIOs can overlook. A team’s existing VMware knowledge has financial value because replacing it takes both money and working time.

Training is also part of a longer transition the organization must sustain. Locandro warns that changing vendors can consume substantial time and resources before the expected benefits arrive. The infrastructure team must do that work while continuing to run the business, which makes its capacity a constraint alongside the budget.

These commitments have an opportunity cost: money and effort spent on migration become unavailable for other work. Locandro points specifically to AI initiatives and other projects that need capital and expenditure. He argues that changing infrastructure suppliers can absorb investment without creating a competitive advantage, so leaders should examine what the move will enable as well as what it will save.

For a CFO, this means comparing the expected return with competing uses of capital; for an infrastructure leader, it means assessing whether the team can complete the transition alongside its other responsibilities. Together, these assessments can justify retaining some workloads temporarily or moving others where the operating benefits warrant the investment. The next step is to separate those cases.

Evaluate each workload before renewal narrows the choices

A workload-level review starts with the applications and services the infrastructure must support. Thomas Cloud, founder of Vertex CIO Advisory and 48 Technologies and director of IT for an unnamed managed service provider, says CIOs and CFOs have been reassessing VMware since Broadcom changed its licensing. His organizations are reviewing their own use while advising clients on possible migrations, so demand for migration advice creates a commercial opportunity for them.

Cloud’s review asks where VMware still provides enough operational and financial value to justify keeping it. “The biggest mistake I see is treating it as an all-or-nothing migration question,” he says. Evaluating workloads separately allows an organization to keep VMware where it fits and investigate alternatives where another platform could serve the work better.

For each workload, the investigation needs to connect operating requirements with the full expense of changing platforms. Cloud’s organizations are considering Hyper-V and Azure as potentially better fits for some workloads. Comparing those options requires assessing how each would support the application, along with the spending and risk involved in moving it.

The comparison also needs enough time to influence the purchase. “The right answer is to understand which workloads still justify the platform, quantify the real cost of staying, understand the cost and risk of moving, and make the decision before the renewal deadline removes your leverage,” Cloud says. Starting early leaves time to evaluate an alternative and act on the result before another contract becomes necessary.

Keeping options open can also mean using several virtualization technologies. The Rimini Street-commissioned survey found that 60% of VMware customers were considering multiple-hypervisor strategies: using more than one type of software that creates and runs virtual machines. This allows different workloads to run on different platforms, giving customers more flexibility in where they place them.

Customers are also considering support arrangements that buy time for those decisions. About two-thirds of IT leaders in the same survey were considering third-party support for versions of VMware’s vSphere virtualization product that had reached the end of vendor support. Rimini Street specializes in supporting those versions and directly benefits when customers choose that option.

The value of that extra time depends on how the customer uses it. “It can give the company time to avoid making a rushed infrastructure decision simply because a renewal date is approaching,” Cloud says. He adds: “But it should be part of an intentional transition or support strategy, not just a way to postpone the same decision indefinitely.” Temporary support therefore needs an agreed purpose, such as maintaining a chosen environment or allowing time to complete a migration.

An agreed purpose also gives the next renewal a place in the investment plan. Cloud puts it this way: “A VMware renewal should be treated like any other material technology dependency: Understand it before the deadline, quantify the alternatives, and don’t let the renewal date make the decision for you.” With that preparation, leaders can assess a move on its operational merits, as the Swiss National Supercomputing Center did.

Operational gains can justify a substantial move

The Swiss National Supercomputing Center’s completed move to SUSE Virtualization shows how operating benefits can strengthen the case for leaving. Dino Conciatore, a systems engineer at the center, says the change reduced time spent managing infrastructure by 70%. That reduction in operating effort belongs in the investment calculation alongside licensing and migration costs.

The center began evaluating its operational needs before Broadcom’s acquisition. Its engineers and IT leaders started investigating VMware alternatives in 2021, and Maria Grazia Giuffreda, the center’s associate director, says technical requirements were the main reason for the eventual transition to SUSE Virtualization. The later VMware price changes reinforced a direction the center had already chosen.

Those technical requirements came with a strong preference for open-source software, whose code is available for inspection and modification. Giuffreda says the center supports that model and opposes paying software-license fees. “Cost always has an impact, because you want to reduce your cost wherever possible,” she says. “You sometimes start looking at alternative solutions for reducing the amount of money that you invest, and licenses are an eternal discussion.”

For Conciatore, VMware’s subsequent licensing changes strengthened that preference: “When we saw the licensing change, we thought, ‘Oh, we’re so lucky, we never liked closed products,’” he says. The center’s search began with technical requirements and software preferences, then gained financial motivation as VMware’s terms changed. The reduction in management time made the operating benefit of replacing the platform measurable.

Main highlights

• Review the full renewal terms: Finance and infrastructure leaders need to assess subscription costs, support changes, and bundled products together. Broadcom’s changes have often brought reported price increases of 50% to 200%, making early contract review essential.
• Budget for the full transition: Migration requires spending on replacement infrastructure, staff retraining, and time diverted from other projects. Rimini Street’s CIO estimates that recovering switching costs can take three to five years, even after VMware’s price increases.
• Decide workload by workload: Infrastructure teams can identify which applications justify staying on VMware and which warrant a move, then compare costs and risks before renewal limits their choices. Third-party support can provide evaluation time when tied to a defined support or transition plan.
• Measure operating gains: Include infrastructure management effort in the investment case. The Swiss National Supercomputing Center reports a 70% reduction in management time after moving to SUSE Virtualization, illustrating how technical fit can strengthen the financial case for migration.