VMware and a new subscription based model

Australia, Apr 22, 2024

VMware and a new subscription based model

The acquisition of VMware by Broadcom has brought about considerable transformations. Notably, there has been a shift towards subscription-based licensing, marking the end of perpetual license sales and indicating a strategic move towards subscription-centric model.

What does this mean for you?

You may be wondering what these changes means for you and your organisations licensing strategy and what are the next steps?

Here are the key takeaways from the recent announcements: 


An end to perpetual license sales 


VMware has made the announcement that perpetual licenses will no longer be available to purchase. Instead, all products will transition to subscription-based models moving forward. Furthermore, the sale of Support and Subscription (SnS) renewals for perpetual offerings has been discontinued. 

VMware offerings will only be available as subscriptions 


From 1 April, 2024, this will be based on the per core licensing model. 


End of Hybrid Purchase Program/Subscription Purchase Program (HPP/SPP) credits 


Any customers (typically larger enterprises) who are on these programs will begin to transition to the new subscription model (effective dates will vary). 

License portability and trade-ins 


A new bring-your-own subscription license option has been introduced, providing license portability to VMware validated hybrid cloud endpoints running VMware Cloud Foundation. Customers will be able to “trade in” their perpetual products in exchange for the new subscription products.

Simplification of product portfolio – all offerings priced per core 


Going forward VMware will have two primary offerings: 

  • VMware Cloud Foundation, an enterprise-class hybrid cloud solution for customers to run their business critical and modern applications. 

  • The new VMware VSphere Foundation a simplified enterprise-grade workload platform for mid-sized to smaller customers. 


Broadcom terminating some partner agreements 


In an announcement earlier this year, Broadcom advised it plans to create new agreements with partners moving forward. This move suggests a significant configuration of alliances and distribution channels, potentially changing the dynamics of how VMware products are sold and supported. 

How does this impact you?

The adjustments in VMware's licensing and subscription approach may result in considerable financial and operational consequences for numerous organisations. This shift could entail a notable surge in infrastructure expenses, with forecasts indicating potential increases of 100% or higher in certain cases.

Customers may also see changes in vendor relationships and service delivery as Broadcom forms fresh partnerships and channels. These developments could influence their procurement procedures and support experiences.

That’s why it’s important to understand the impact of these changes on your business now, so you can plan accordingly, and manage your budget effectively. This is especially timely for those customers with contracts coming up for renewal.

How can you manage this transition?

Logicalis has been a trusted partner of VMware for over for 20 years, and we recommend that all current customers conduct a comprehensive evaluation of their VMware usage contracts –taking note of when they are due to expire.  

It may also be of interest to consider your future requirements and consider server virtualisation’s role in your modernisation plans.

Logicalis can help ensure you have a smooth transition regardless of what stage you are at in your modernisation journey.  

Logicalis VMware Licensing and Optimisation Assessment

Navigating this licensing change may at times seem challenging, but don’t let it distract you from your modernisation plans. Logicalis experts are available to assist with a thorough review of your current VMware licensing arrangements and provide recommendations on either server consolidation and optimisation or procuring new licenses. You will also be able to take advantage of new partner pricing.

Create the best transition for your organisation with our:              

  • Thorough licensing assessment, maximising the value of your VMware investment while also striving to minimise expenses.
  • Optimisation assessment, evaluating all your hosting options, keeping in mind your organisations infrastructure and modernisation objectives.
  • Customised consulting services, provided by our expansive team of tech experts who can give you the right advice, aligned to your business objectives.
  • Specialised support solutions, provided by our team of professionals, guaranteeing prompt assistance and proficient resolution of any challenges you may encounter.

Contact Leon Scott (leon.scott@au.logicalis.com)  to find our more information about Logicalis assessment options. 


Related Insights