Broadcom Reverses Course: Minimum License Requirement for 72 Cores at VMware Abandoned

Broadcom has decided to retract its earlier announcement regarding VMware licensing, allowing companies to continue purchasing licenses starting from 16 cores, as confirmed by a distributor. Initially, Broadcom had intended to raise the minimum core licensing requirement from 16 to 72 starting April 10, 2025. This change would have had significant implications for small and medium-sized enterprises (SMEs).

The revised licensing model comes after considerable backlash from stakeholders. An official reason for the change has not been provided, but a spokesperson for Broadcom stated that there had never been an announced price change. The minimum core requirement remains at 16 cores as established in December 2023.

The proposed increase in licensing costs would have forced SMEs to either absorb higher expenses for unused cores or seek alternatives such as Red Hat's OpenShift Virtualization, Nutanix AHV, or the open-source platform Proxmox. Meanwhile, Broadcom has been promoting its more comprehensive and expensive VMware Cloud Foundation (VCF) to its clients. Following the beta release of VCF 9, Broadcom's marketing chief expressed confidence that customers were becoming increasingly comfortable with the company's direction after the VMware acquisition.

Despite the reversion to the original licensing terms, uncertainty regarding Broadcom's strategy persists. The company's volatility raises questions for businesses previously affected by the proposed changes, leading them to consider whether to continue investing in VMware products amidst rising competition. A number of clients have recently transitioned away from the VMware ecosystem, opting for alternatives, including the Austrian cloud provider Anexia.

As Broadcom continues to navigate customer responses and market dynamics, the company faces the challenge of regaining trust among its client base while maintaining a competitive edge in the virtualization landscape.