What the Broadcom Acquisition Changed
In November 2023, Broadcom finalised its acquisition of VMware, valued at about $69 billion at closing ($61 billion when announced in May 2022) — 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
VCF and VVF
(end of perpetual-license sales)
Key changes since the acquisition
- End of sale of perpetual licenses and of support renewals (SnS) — a perpetual license already bought can still be used, with support only until the paid contract ends. New purchases are subscriptions.
- End of the per-CPU model (up to 32 cores per socket) — transition to per-core (minimum 16 cores per socket)
- Two primary offers: VVF (vSphere, VCF Operations, limited vSAN) and VCF (vSphere, vSAN, NSX, VCF Operations and VCF Automation — formerly Aria). vSphere Standard and Enterprise Plus remain separate subscriptions through version 8 Update 3.
- Elimination of most partner programmes and educational discounts
- Free ESXi was withdrawn in February 2024 — in April 2025 Broadcom brought back a free ESXi 8.0 Update 3e, but only for non-production use, with no support and no vCenter; there is no free ESXi 9.
- Support centralisation — longer response times in some tiers
Important: Broadcom does not require an already purchased perpetual license to be converted to a subscription. It can still be used; SnS cannot be renewed, and support ends with the paid contract. 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 3-year comparison: on the VMware side an environment with 576 CPU cores (9 servers × 2 sockets × 32 cores); on the Proxmox VE side an HA cluster with quorum — 5 hypervisors, each with 1 socket and 128 cores (640 cores in total). Proxmox subscriptions are billed per socket, not per core, so the count is 5 sockets instead of 18.
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) | ~€212,000 | ~€101,000 | €0 (open source) |
| Technical support (year 1) | included in package | included in package | €2,750 (5 sockets) |
| License or support × 3 years | ~€636,000 | ~€302,000 | €8,250 |
| Team training (one-off) | €0 (team already knows VMware) | €0 (team already knows VMware) | ~€4,000 |
| 3-year TCO (excl. migration) | ~€636,000 | ~€302,000 | ~€12,250 |
Cost proportion visualisation (3 years, excl. migration, base = VCF)
Assuming VMware license savings only (excluding migration costs), payback falls in the first month — for both VVF and VCF. This model leaves out the cost of the migration itself.
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
VCF bundles vSphere, vSAN, NSX, VCF Operations and VCF Automation (formerly Aria). VVF includes vSphere, VCF Operations and a limited vSAN entitlement (0.25 TiB per core) — not NSX and not full vSAN. In both cases you pay for the package components even if you mainly use vSphere.
🏢 Strategic risk
Broadcom historically focuses on the largest accounts post-acquisition and limits investment in innovation 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 in VVF (0.25 TiB/core) and VCF (1 TiB/core); none in vSphere Standard | Ceph (or ZFS on a dedicated server) | PVE |
| Containers (LXC) | No LXC (Kubernetes via VKS) | LXC built-in | PVE |
| Built-in backup | None (VDP discontinued; Veeam separate) | vzdump (built in); PBS separate | PVE |
| API / automation | REST API, PowerCLI | REST API, Terraform (community) | Equal |
| GPU passthrough | DirectPath I/O (no vGPU license) | PCIe passthrough (native) | PVE |
| License price | ~€180–370/core/year | €550/socket/year (support opt.) | PVE (97% cheaper than VCF) |
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 — RDMA network latency on the order of 1–5 µs, not end-to-end storage latency, plus RDMA offload and 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 products (including certain SAP and Oracle titles) are certified only on selected hypervisors, often with VMware on the list. Proxmox is not added automatically — confirm 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 and a certified hypervisor: PCI DSS does not require a certified hypervisor. Merchant levels, including Level 1, depend on transaction volume and the type of assessment, not on a product certificate. SWIFT CSP is about the operator’s security controls, not a hypervisor certificate. A specific platform may still be required by an application vendor’s support matrix or by internal policy.
- 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: VMware VVF on 576 cores (9 servers × 2 sockets × 32 cores), Proxmox VE on 5 hypervisors with quorum (5×1 socket × 128 cores), Standard subscription €2,750/year (5 sockets).
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% ≈ €290k ÷ €12.25k ≈ 2,370%.
savings
after 3 years
3-year period
Recommendation and 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.