Broadcom’s VMware Shake-Up: SMBs Left Behind as Enterprise Takes Center Stage
From soaring license costs to partner terminations, Broadcom’s new VMware strategy is reshaping the IT landscape and small businesses are paying the price.
If you’re a small or mid-sized business relying on VMware, the ground is shifting beneath your feet. Broadcom’s sweeping changes to VMware’s licensing and partner programs are sending a clear message: the future is enterprise-focused, and smaller players are being shown the door.
Let’s break down what’s happening, why it matters, and what you can do to stay ahead.
What’s Changed—and Why It’s a Big Deal
In early 2025, Broadcom introduced a new VMware licensing model that stunned the SMB community. The most jarring change? A jump from a 16-core to a 72-core minimum for license purchases. That meant even if your infrastructure only used 16 cores, you were paying for 72—ballooning annual costs from $2,000 to $10,000 or more.
But the pricing model was just the beginning.
Key Licensing Changes
- Subscription-Only Licensing: Perpetual licenses are gone. All VMware products now require ongoing subscriptions.
- Bundled Offerings: Broadcom has consolidated VMware’s product suite into bundles, often forcing customers to pay for features they don’t need.
- Late Renewal Penalties: Miss your renewal? Expect a 20% penalty—and in some cases, cease-and-desist letters for lapsed licenses.
New Blow: Broadcom Drops Registered VMware Resellers
In a move that’s further alienating smaller customers, Broadcom has eliminated the “Registered” tier of its VMware partner program. Thousands of smaller resellers received termination notices, giving them just 60 days to wind down their VMware business.
According to Broadcom’s global channel chief Brian Moats, the company is “raising the bar” by focusing on Select, Premier, and Pinnacle partners—those with deep enterprise investments and VMware Cloud Foundation (VCF) expertise.
This means many SMBs will lose their trusted local IT partners and be forced to work with larger, less personalized providers—or go it alone.
Why It Matters
Broadcom’s strategy is clear: prioritize its top 600 enterprise customers and phase out support for smaller businesses. That leaves SMBs with:
- Fewer support options
- Longer wait times
- Higher costs
- Limited access to VMware solutions
For many, VMware is no longer a viable option.
What You Can Do Now
Here’s the good news: you’re not stuck. There are smart, strategic alternatives that don’t require a full rip-and-replace.
- Public Cloud: Azure and AWS
Public cloud platforms offer scalable, secure virtualization without the hardware burden. Ideal for remote teams or seasonal workloads, providing a dedicated computing environment for one organization, offering exclusive control and security.
- Common Knowledge Technology’s Private Cloud
Our private cloud delivers dedicated computing resources for enhanced security, control, and customization. It supports tailored security configurations to meet compliance needs and protects sensitive data. With flexible infrastructure and services, you can optimize performance and reliability to fit your unique business requirements.
- Hybrid Cloud
A mix of private and public cloud services, hybrid cloud allows data to move between them for flexibility. Keep critical workloads on-prem while shifting others to the cloud. It’s flexible, cost-effective, and future-ready.
- Hyperconverged Infrastructure (HCI)
HCI platforms like Scale Computing consolidate compute, storage, and networking into one system—often at a lower total cost and without Broadcom’s licensing headaches.
What Other Companies Are Doing — and How CKT Can Help
Across the SMB landscape, companies are reassessing their VMware environments and discovering they’re significantly overpaying. In response, many are transitioning to more cost-effective and scalable solutions such as hyperconverged infrastructure—where Scale Computing is rapidly gaining market share—public cloud platforms like Azure and AWS, private cloud deployments for enhanced control, hybrid models that incorporate Microsoft Hyper-V, and full adoption of the Microsoft 365 platform including Teams, SharePoint, and OneDrive.
CKT brings deep expertise in guiding organizations through these transitions, helping clients modernize infrastructure, optimize cloud strategies, and fully leverage the Microsoft ecosystem.
The key takeaway? Don’t wait until your next VMware renewal—start planning now with CKT as your trusted partner.
What’s Next?
Broadcom’s VMware overhaul isn’t just a pricing update—it’s a strategic pivot. And for SMBs, it’s a wake-up call. Whether you’re exploring cloud, HCI, or new vendor relationships, the time to act is now.
Peter and the CKT team are here to help you navigate this transition. Let’s talk strategy before your next renewal becomes a financial crisis. We have extensive expertise in all your VMWare options including M365, Scale Computing Hyperconvergence, Azure and hybrid environments. Please Contact Us Today!
