Date:
23 Apr 2025
Author:
PREO AG
Used software
A New VMware Licensing Model Calls for Strategic Rethinking
Since Broadcom’s takeover, many organisations have faced major licensing, operational and financial challenges. This includes not only the licensing model and its associated cost increases, but also new contract terms and support structures.
In response, PREO has expanded its portfolio to include used VMware licences. This allows businesses to continue using proven virtualisation solutions without having to switch immediately to the new subscription model.
In this blog post, we summarise the key changes resulting from the Broadcom acquisition and show how businesses can escape the cost trap and reduce vendor lock-in by using alternative licensing solutions.
From Perpetual to Subscription – Fundamental Changes to VMware Licensing
Broadcom’s acquisition has brought a complete overhaul of VMware’s traditional licensing model. Perpetual licences are no longer offered – only subscription-based licences are now available. Existing customers may continue to use their perpetual licences, but once the current support contract expires, no further support is provided.
New VMware licences such as vSphere and vCloud are now licensed exclusively via subscription, based on physical CPU cores, with a minimum of 16 cores per CPU. Each licence includes one vCenter. Subscriptions also include full Production Support (vSphere) or Selected Support (vCloud) for the duration of the licence term.
In most cases, this new model results in significantly higher overall costs compared to the previous perpetual licensing model with separate maintenance contracts. Furthermore, Broadcom has streamlined the VMware product portfolio, reducing it to a few bundles centred around vSphere Foundation and the more comprehensive vCloud Foundation. For smaller environments, only vSphere Standard or Essentials Plus are now available under subscription.
VMware Subscription Licensing: Rising Costs for Businesses
For mid-sized and large VMware customers, these changes have serious financial implications. Many companies are reporting substantial cost increases – in some cases, licence fees have doubled or even increased tenfold. This development is pushing even well-planned IT budgets to their limits, leading many businesses to reassess the cost-effectiveness of their VMware infrastructure.
Another critical aspect: a subscription licence always includes support. When the contract ends, users lose their right to use the software. Licences cannot be synchronised over time via CoTerm, and each licence has a fixed term. This means licences across a company can expire at different times, creating significant extra effort for internal software asset management.
The support situation has also deteriorated since the acquisition. VMware customers report that, due to layoffs and restructuring, many previous VMware support teams no longer exist, and personal contacts have been lost. Additionally, many businesses are experiencing longer response times when issues arise. As a result, more companies are turning to their VMware partners or training internal IT staff to cover support gaps.
Sustainable Cost and Time Savings with Used VMware Licences
Used VMware licences offer a cost-effective alternative. These are perpetual licences, such as vSphere, that are no longer required by the original purchaser and are transferred to a new user. Following a landmark ruling by the European Court of Justice in 2012, buying and selling used software licences is legal in the EU under certain conditions.
As one of the leading providers of used software, PREO has recently expanded its offering to include used VMware licences and has strengthened its strategic partnership with Origina. This enables businesses to legally and affordably continue using VMware products – with full transparency, audit-proof documentation, and flexible maintenance and support options.
Benefits for PREO Customer
- Significant cost savings with used VMware licences
- Legally compliant and audit-proof licence acquisition with full documentation of ownership rights
- Personalised consulting on all matters related to licence transactions or the integration of used licences into classic network environments or hybrid cloud models
