VMware Increases Core Licensing Requirements to 72

VMware, now under the ownership of Broadcom, is set to implement significant changes to its licensing framework effective April 10, 2025. The minimum number of cores that companies are required to license will rise from 16 to 72. This adjustment applies to both new licenses and renewals, following the earlier removal of perpetual licenses in the spring of 2024.

This new policy will affect customers globally. For instance, a business that needs a single-core server with 16 cores will now have to license 72 cores--resulting in an additional 56 cores beyond their actual need. A customer with five dual-processor servers, each equipped with 16 cores (totaling 160 cores), can still license the same number of cores. However, if different versions of vSphere are required, the minimum core count must be acquired for each version separately. Importantly, the core-level minimum remains at 16 cores, but the new policy eliminates the option for smaller purchases that were previously common.

Additionally, Broadcom will be reinstating penalties for existing customers who do not renew their subscriptions on the anniversary date. This penalty amounts to 20% of the first-year licensing fee. These reinstatement fees were previously suspended during the Broadcom acquisition. Reports indicate that Broadcom's recent announcements were shared with select resellers.

The updated licensing structure significantly impacts small and medium-sized enterprises (SMEs). With the requirement to license more cores than necessary, many SMEs may struggle to justify the increased costs. As a result, businesses may consider alternative virtualization solutions, potentially boosting interest in competitors like Nutanix with its AHV hypervisor, Red Hat's OpenShift Virtualization, or the open-source platform Proxmox.

This shift may also pave the way for lesser-known providers to enter the market. For instance, Sangfor Technologies, a Chinese tech firm, is actively working to introduce its Sangfor HCI virtualization platform in Germany, alongside StorMagic from the UK, which claims its SvHCI product offers a more cost-effective solution. Concurrently, Broadcom is encouraging customers to migrate to its more comprehensive and costly VMware Cloud Foundation (VCF), a move that may primarily attract larger enterprises with hybrid cloud strategies.