What the Broadcom Acquisition Changed
In November 2023, Broadcom finalised its acquisition of VMware for $61 billion — one of the largest transactions in tech history. For VMware customers, this meant a radical change to the licensing model and pricing structure, the effects of which organisations are still feeling today.
for enterprise customers
VVF and VCF (bundled)
(end of perpetual licenses)
Key changes since the acquisition
- Elimination of perpetual licenses — only annual or 3-year subscriptions
- End of per-VM model — transition to per-core (minimum 16 cores per socket)
- Product bundling: vSphere + vSAN + Aria in one package (VVF/VCF)
- Elimination of most partner programmes and educational discounts
- End of free ESXi Free edition — removed from distribution
- Support centralisation — longer response times in some tiers
Important: Broadcom requires all contracts to be renewed under the new terms at the next licensing cycle. Negotiating individual terms is only possible for the largest customers (Fortune 500 or contracts above several million USD per year).
TCO Analysis — VMware vs Proxmox
Total Cost of Ownership covers licenses, technical support, operational costs, and training. Below is a realistic comparison for an environment with 512 CPU cores (4 servers × 2 sockets × 64 cores) over a 3-year period.
Note: The TCO analysis below excludes migration costs — it focuses solely on license, support and training costs that the organisation incurs regardless of migration decisions.
| Cost component | VMware VCF | VMware VVF | Proxmox VE |
|---|---|---|---|
| License / subscription (year 1) | $204,800 | $97,280 | €0 (open source) |
| Technical support (year 1) | included in package | included in package | €2,200 (4 sockets) |
| License cost × 3 years | ~$614,400 | ~$291,840 | €6,600 |
| Training (certifications) | $3,000–8,000/person | $3,000–8,000/person | €500–1,500/person |
| 3-year TCO (excl. migration) | ~€575,000 | ~€280,000 | ~€8,000–10,000 |
Cost proportion visualisation (3 years, excl. migration, base = VCF)
Assuming VMware license savings only (excluding migration costs), payback typically occurs within 2–4 months. With VCF — often within the very first month after cutover.
VMware Contractual Risks in 2025
Beyond price increases, organisations using VMware must contend with a range of strategic and operational risks.
📋 Vendor lock-in
Proprietary VMDK, vSAN, and NSX formats make data portability difficult or impossible without costly conversions. Dependency on a single vendor is structural.
💰 Price unpredictability
Broadcom has clearly signalled further price increases. After 2025, customers without multi-year contracts may face additional significant cost hikes at each renewal.
🔧 Support changes
Broadcom has eliminated some support lines and reduced teams. Response times for critical tickets (P1) have in some cases lengthened compared to the VMware era.
📦 Bundling of unused products
VVF and VCF force payment for full packages (vSAN, Aria, NSX) even if the organisation uses only vSphere. You pay for capabilities you don't need.
🏢 Strategic risk
Broadcom historically focuses on largest accounts post-acquisition and limits innovation investment in the mid-market segment. The product roadmap is less transparent.
⚖️ License audits
Broadcom is intensifying compliance audits. Mismatches between versions or configurations and license terms can result in retroactive financial claims.
Technical Platform Comparison
Proxmox VE is a mature enterprise platform built on Debian and KVM, developed since 2008. Below is an honest comparison of the capabilities of both systems from the perspective of a typical IT department.
| Feature | VMware (VVF/VCF) | Proxmox VE | Advantage |
|---|---|---|---|
| Hypervisor | ESXi (proprietary) | KVM (Linux kernel) | PVE |
| Live Migration | vMotion (excellent) | Proxmox Live Migration | Equal |
| HA / Failover | vSphere HA | Proxmox HA + Corosync | Equal |
| Distributed Storage | vSAN (extra cost) | ZFS + RoCE (iSCSI/NFS) | PVE |
| Containers (LXC) | Not available natively | LXC built-in | PVE |
| Built-in backup | Paid (VDP/Veeam) | PBS (Proxmox Backup Server) | PVE |
| API / automation | REST API, PowerCLI | REST API, Terraform provider | Equal |
| GPU passthrough | vGPU (license required) | PCIe passthrough (native) | PVE |
| License price | $190–400/core/year | €550/socket/year (support opt.) | PVE (97% cheaper) |
Proxmox VE covers 95%+ of use cases in a typical enterprise environment. For shared storage we recommend a dedicated ZFS server (TrueNAS/OpenZFS) with RoCE v2 networking — 1–5 µs latency, RDMA offload, full live migration without stopping VMs.
When Proxmox is NOT the right choice
An honest analysis requires identifying scenarios where migration may not be the optimal decision.
- Deep VMware NSX-T integration: If the organisation relies heavily on NSX micro-segmentation with complex security policies, migration requires redesigning the entire network layer.
- Applications certified only on VMware: Some software vendors (SAP, Oracle) certify their products exclusively on VMware. Running on Proxmox may require negotiating support terms with the application vendor.
- Organisations without Linux competencies: Proxmox requires Linux knowledge. Windows-centric IT teams must factor in training costs or new hiring.
- Regulations requiring a certified hypervisor: Some regulated environments (SWIFT, PCI DSS Tier 1) may require platforms with specific certification sets.
- VMware contract with multi-year prepaid and favourable terms: If the organisation signed a long-term contract before the Broadcom acquisition and has locked-in good rates, migration can wait until the contract ends.
Even in the above cases an audit is worthwhile — it often turns out that the problematic dependencies affect only one or two VMs, while the rest of the environment can be migrated without complications.
Migration ROI — Financial Model
The ROI model below is based on real data from migrations we have conducted. Assumptions: 512-core environment, VMware VVF, Proxmox support subscription €2,200/year.
Note: The ROI model below excludes migration costs — it covers VMware license savings, Proxmox support costs and team training only. ROI (3 years) = net savings ÷ (Proxmox support 3× + training) × 100% ≈ €261k ÷ €10.6k ≈ 2,460%.
savings
after 3 years
3-year period
Recommendation & Next Steps
For the vast majority of organisations using VMware, migration to Proxmox VE is financially justified and technically feasible. The key question is not "whether to migrate?" but "when and how?"
Recommended decision path
- Step 1 — Environment audit (free): Full VM inventory, dependency mapping, and identification of potential migration blockers. Takes 2–5 business days.
- Step 2 — TCO analysis: Precise savings calculation for your specific environment, including migration and training costs.
- Step 3 — Proof of Concept: Migration of 2–5 test VMs to an isolated Proxmox cluster. Application compatibility and performance verification.
- Step 4 — Migration schedule: System prioritisation (starting from less critical), maintenance window planning, rollback strategy.
- Step 5 — Wave migration: Moving systems in batches, with full monitoring and the ability to revert to VMware at any point.
- Step 6 — VMware decommission: Formal subscription closure and resource release after the stabilisation period ends.
The best time to start the process is 3–6 months before your VMware license renewal. This gives time for a calm migration without deadline pressure and allows negotiation with Broadcom from a position of strength.
Calculate your savings
Use the cost calculator or schedule a free consultation — our engineer will analyse your environment and prepare a specific migration quote.