All about VMware licensing changes

After Broadcom acquired VMware in December 2023, the company announced major changes to future licensing:

• A simplification of their product portfolio. 
• Immediate and complete switch to subscription.

These changes may mean that it may make even more sense to use secondary software to manage VMware licensing than before. Read on to find out why.

For customers, these changes mean the following:

1. Permanent licenses can no longer be purchased
   Customers with existing perpetual licenses are encouraged to upgrade to subscription licenses.
2. End of Support and Subscription renewals on perpetual licenses
   Customers with perpetual licenses can continue to use them, but VMware support will be terminated when their current SnS contract ends. They will also not be able to upgrade to newer versions. Customers will have to switch to a subscription model.
3. End of Hybrid Purchasing Program/Subscription Purchasing Program (HPP/SPP)
   Programs in which companies bought credits that could be redeemed for a list of products.
4. New simplified portfolio:
   The number of available VMware by Broadcom products has been drastically reduced from the original 168 to less than 10. The four solutions to be launched are:
   
   - VMware Cloud Foundation
      A fully virtualized data centre which offers vSphere, vSAN, NSX and Aria (prev. vRealize)
   
   - vSphere Foundation 
      Aimed at medium/large corporates- Includes vSphere, Aria and Tanzu  
   
   - vSphere Standard a Essentials Plus
      For small workloads
   
   - VMware Cloud na Azure/AWS/Google
      VMware Cloud Foundation run within a hyperscaler of choice

It is also possible to purchase the following add-ons to the above bundles:

• VMware vSAN
• VMware Firewall
• VMware Private AI Cloud
• VMware Cloud Disaster Recovery

All of these offerings are subscription-based, and are priced per core.

Broadcom has also removed VMware Carbon Black, WorkspaceOne and Horizon from the name. These brands will now be marketed as autonomous entities within Broadcom.

Recommendations for customers affected by this change:

• Assessment of the current situation
  In case that a product needs to be purchased, this will only be possible under the subscription model.
• Understand where support is required
  Understand where support is required If a contract renewal is imminent, customers need to find out where support is required and whether any of their products can continue to operate without support.
• Find out what your other options are
  It is likely that VMware will offer favorable pricing to customers who upgrade to a subscription early. Otherwise, consider that secondary licenses can be a cost-effective alternative that significantly reduces the burden on your company's budget.

Moreover, on January 15 2024, Broadcom informed all of its OEM partners (including Dell, Lenovo and HPE) that they will no longer accept new orders, new Enterprise License Agreements (ELAs) or renewals.

In short, OEM licensing for VMware is no longer possible and all future orders must be placed directly with VMware under the new licensing models.