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"As on-premises virtualization projects move from [enterprise license agreements] and perpetual licenses to new bundling, socket-to-core ratios, and consumption models, the costs and pricing can increase two or three times," Gartner's 2024 Hype Cycle for Data Center Infrastructure Technologies report that released in June reads.
Numerous VMware customers I spoke with said their VMware costs rose 300 percent after Broadcom's takeover. Some companies have cited even higher price hikes—including AT⁘T, which claimed that Broadcom proposed a 1,050 percent price hike . AT⁘T is suing Broadcom over perpetual license support and says it has looked into VMware alternatives.
"So unless you were using the entire VMware product line, a lot of companies were now forced to pay for things that they did not want or need," he added.
Dean Colpitts, CTO at Canadian VMware customer and managed services provider Members IT Group , shared similar sentiments, adding that "Broadcom simply is not listening to what customers say they want or need" when it comes to VMware products and features, especially those related to small and medium-sized businesses.
When asked to comment on this story, a Broadcom representative declined to answer specific questions regarding VMware customers' concerns. Instead, the company referred me to Broadcom CEO Hock Tan's "recent blog posts," which are available here .
On the other hand, large customers are more likely to be willing and able to stomach VMware price hikes. IT company Veeam, for example, saw prices for the VMware products it uses jump 300 percent, but "internal services are staying the course," Rick Vanover, Veeam's product strategy VP, told me.
Pricing and other changes have led some customers and partners to suspect that Broadcom prefers enterprise-sized customers for VMware. In January, Broadcom reportedly took approximately 2,000 of VMware's biggest customers direct, cutting channel partners from the deals.
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