In November 2023, Broadcom completed its acquisition of VMware in a deal worth $61 billion. At the same time, the company revealed that it would be changing its licensing structure from the existing format of perpetual licenses to a subscription model. As the firm moves into a new era under Broadcom’s leadership, customers are asking what the new model means for their businesses, especially if they have existing perpetual license contracts in place.
In the official VMware by Broadcom statement, the company explained that the move to the new subscription model was designed to align the company’s simplified and streamlined portfolio with a more relevant payment plan. The company said that, ‘the portfolio simplification across all VMware by Broadcom divisions stems from customer and partner feedback over the years telling us our offers and go-to-market are too complex’.
So, what do you need to know about the new VMware licensing models?
First, if your company currently has a contractual agreement with VMware that includes a perpetual license and active support, the company will the support as it is defined within the contract. In short - you can continue using the services until your Support and Subscription (SnS) terms expire, after that support will end. That said, you can trade your current products on a perpetual license for entry into the subscription model and can potentially benefit from upgrade and pricing incentives.
Second, you won’t be able to renew your perpetual license once it concludes and instead you will need to choose between either a hybrid purchase programme (HPP) or a subscription purchase programme (SPP). There is also the option to bring your own subscription license to ‘VMware validated hybrid cloud endpoints running VMware Cloud Foundation.’, though this is limited to Pinnacle partners and pending final confirmation.
Third, while on the topic of VMware Cloud Foundation, the subscription list has been reduced by half and higher support levels have been added. VMware vSphere Foundation, a new workload platform for small to medium enterprises, and Vspehere Essentials join VMware Cloud Foundation in the company’s portfolio and all three will include Aria with add-ons you can use where needed.
Fourth, the traditional VMware Cloud Partner Programme has been collapsed and there will be a transition to a new Cloud Services Provider costing model as of March 2024.
What happens next?
If your company happens to be on a VMware perpetual license, then you need to take some very simple steps to prepare for the change. Strategix has been invited as a premier Cloud Services Partner and Reseller Partner due to our proven track record and deep expertise; we are well positioned to help you manage the changes to the licensing model.
Start by assessing your existing perpetual license contracts to ensure you know exactly when they are due to expire. Then, get in touch with one of our experts today, and let’s work with you to explore subscription or cloud-based alternatives and ensure you find the most suitable licensing solution for your requirements.
